Canada’s Corridor Resources Inc. saw its stock plunge last week after reporting “unexpected and perplexing” results from a shale gas appraisal program in New Brunswick.

In trading last Monday on the Toronto Stock Exchange Corridor’s stock price fell sharply, closing at around C$4.80 after opening the day at C$7.74/share. Corridor on average trades about 249,000 shares a day; last Monday more than 6.87 million shares had traded hands. At midday on Friday Corridor’s stock remained weak, with trading down at about C$4.83/share.

Investors fled following a press release issued by the company that indicated poor initial results from its exploration program in the Frederick Brook Shale formation in southern New Brunswick.

The leasehold is being developed with partner Apache Canada Ltd., which 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 acreage under a farmout and option contract (see NGI, Dec. 8, 2009). The Frederick Brook Shale lies beneath the Hiram Brook tight gas sands in both the Sussex and Elgin sub-basins.

Corridor last week reported the first well results involving the Green Road B-41 and the Will DeMille G-59 horizontal wells, which were drilled and cased earlier this year by Apache Canada, which is the operator.

“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.

However, after the plugs were drilled out in both horizontal wells, the B-41 well had recovered 1,728 cubic meters of frack fluid (10%) and “no gas to date,” said Corridor. The G-59 well had 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 Corridor said 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, which had no comment on the results, 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,” said Corridor.

“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.

Former TransCanada Midstream COO Phillip R. Knoll, who was appointed president and CEO of Corridor in mid-October, told the Halifax Telegraph-Journal last week that his company had issued the press release to inform the markets about the wells’ results in terms of gas flows, which he said would come some time in February versus a previous target of early- to mid-January.

“We have more work to do before we can get the results,” Knoll explained. The fracking fluid has to be removed before the gas can flow, he added.

“When we drilled the wells, these horizontal wells, we had good gas shows, so that indicates the gas is in the shale,” he told the newspaper. “It is a matter of what are the best techniques to use to extract the gas.”

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