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Small Producer Targets Bigger Market with Large Pipe Interconnect

Halifax, NS-based junior exploration and production company Corridor Resources Inc. applied to the New Brunswick Public Utilities Board (PUB) to construct and operate a pipeline connecting the McCully natural gas field in New Brunswick with Maritimes & Northeast Pipeline in order to bring McCully gas to the Maritimes provinces and New England.

The 8-inch diameter, 30-mile pipeline could be available for deliveries by November. Corridor said it expects to have initial gas deliveries of 25 MMcf/d by the end of 2006. The pipeline will have ultimate capacity for up to 88 MMcf/d with maximum compression facilities, providing Corridor with an opportunity to expand production from initial levels.

Corridor began drilling at the McCully C-67 well, which is located on the western side of the McCully natural gas field in south central New Brunswick, in April 2005 (see Daily GPI, April 21, 2005). The McCully field is estimated to hold more than 1 Tcf of gas in place in the Hiram Brook formation. Two wells have been on production in the field for almost three years, supplying natural gas at a combined average rate of 2 MMcf/d to a limited local market.

The production performance of these wells has demonstrated the potential for future wells in the McCully field to supply significant volumes of gas to larger markets in New Brunswick and New England. Corridor's planned development is located within an area that was independently appraised by APA Petroleum Engineering in December 2005, and that represents less than 20% of the total field area. The APA report assigned proved plus probable gas-in-place of 252 Bcf and proved plus probable recoverable sales gas reserves of 119 Bcf (79 Bcf net to Corridor's interest) to the area assessed.

Corridor holds interests onshore in New Brunswick, Prince Edward Island and Quebec, and offshore in the Gulf of St. Lawrence.

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