Canada's Corridor Resources Inc. saw its stock lose almost one-third of its value on Monday after announcing "unexpected and perplexing" results from a shale gas appraisal program in New Brunswick.
In afternoon trading on the Toronto Stock Exchange Corridor's stock price had fallen by about C$2.52 after closing on Friday at C$7.74/share. Corridor on average trades about 249,000 shares a day; on Monday more than 6.87 million shares had traded hands.
Apache Canada Ltd. last year agreed to spend up to C$25 million over 18 months with the Halifax-based junior explorer to appraise and potentially develop the Frederick Brook Shale formation in southern New Brunswick acreage under a farmout and option contract (see Daily GPI, Dec. 8, 2009). The Frederick Brook Shale lies beneath the Hiram Brook tight gas sands in both the Sussex and Elgin sub-basins.
Corridor said the well results involved the Green Road B-41 and the Will DeMille G-59 horizontal wells drilled and cased earlier this year by Apache Canada, which is the operating partner.
"Strong gas shows were encountered in the horizontal section of both wells during drilling," said Corridor. Five slickwater hydraulic fracture (frack) stimulation procedures were completed in each of the wells.
After the plugs were drilled out in both horizontal wells, the B-41 well so far has recovered 1,728 cubic meters of frack fluid (10%) and "no gas to date," said Corridor. The G-59 well has recovered 805 cubic meters of frack fluid (4%) and "negligible gas" to date.
Steps are under way to recover additional amounts of frack water, which could encourage the flow of gas into the wellbore.
"Considering the strong gas flows from Corridor's nearby G-41 vertical well, and the strong gas shows encountered while drilling the two horizontal wells, the preliminary responses of these wells are both unexpected and perplexing," said the producer.
Apache Canada now is reviewing the frack operations and flowback data and "conducting extensive analysis and further testing in order to determine why the wells have responded in this manner and to develop a go-forward approach in order to advance the Elgin shale gas appraisal program.
"Although the well response to date is perplexing, it is important to recognize that the evaluation of the development potential of the Elgin shale gas resource play is in its early stages."
Corridor said it would continue to conduct tests with Apache Canada on the South Branch G-36 oil well in the play.