Columbia Natural Resources Canada (CNRC) has joined with twosmall Canadian producers to prove that all the natural gas actionin eastern Canada is not offshore.

The U.S. Appalachia-based producer has announced joint ventureswith two Nova Scotia and New Brunswick onshore producers – CorridorResources Inc., based in Halifax, NS and named for the newMaritimes & Northeast Pipeline corridor, and MariCo Oil and GasCorp., headquartered in Fredericton, NB. Columbia purchased a 50%interest in drilling projects of the two producers to tap mainlynatural gas resources to feed into the pipeline which is expectedto be completed in time for deliveries this winter.

“Exploration in the Canadian Maritimes is an exciting newdevelopment. It is an area where we see real potential for growth,”said W. Henry Harmon, president of U.S. affiliate Columbia NaturalResources, adding it was part of Columbia’s efforts to expand itsE&P operations beyond the Appalachian Basin.

Norman W. Miller, Corridor’s president, said Columbia’s interestwould provide a major impetus for development. “Columbia will bringexperience with the latest seismic and drilling techniques” gainedin its Appalachian properties to a region with similar geology,Miller said.

Under the terms of the agreement, Columbia will pay Corridor $1million for a 50% working interest in Corridor’s Sackville Basinand Elgin Basin licences covering some 312,670 acres insoutheastern New Brunswick. The two companies have committed tocarrying out an extensive seismic program in the Sackville, NB,area this summer and to drilling two exploration wells this fall,one near Sackville and the other near Elgin. Corridor will act asoperator for activities undertaken this year with the operator’srole going to Columbia at the year’s end.

The agreement with MariCo includes a 50% working interest in 17tracts totaling more than 1 million acres and a 50% workinginterest in the Downey #1 discovery well south of Moncton, NB, andapproximately 40 miles of seismic data also in southeastern NewBrunswick. Under this agreement CNRC anticipates completing theDowney well and drilling two delineation wells this year.

Corridor was founded by three partners, including two ShellCanada veterans in 1995 to search out and take an aggressive landposition within reach of the new pipeline. It now has petroleumexploration licenses for a total of 5,650,109 net acres in NewBrunswick, Quebec and Prince Edward Island. The company’s game plancalls for “accessing a large historic database of geological anddrilling information, evaluating this data with new explorationtechnologies, and preparing prospect plays which are suitable toattract new partners.” The first of such farmout agreements wasconcluded with Shell Canada Ltd. in 1997 covering development onAnticosti Island, Quebec.

Miller pointed out that the Maritimes area historically hasproduced for local use. Changed economics from new drilling andproduction techniques, plus a nearby mainline combine to upgradethe area’s prospects.

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