corridor resources - 2012 agm slides

7/28/2019 Corridor Resources - 2012 AGM slides

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AGM 2012MAY 31, 2012


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Corridors Opportunities

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Atlantic Canadian Explorationand Production company withenormous resource potential

Commanding land position of1.5 million net acres in EasternCanada

Significant potential upsiderelated to high impact plays:

- New Brunswick shale gas

- Anticosti shale oil

- Old Harry Prospect

Existing cash flow has allowedCorridor to continue to progressopportunities with no debtduring period of weak gas

prices and challenging markets

Anticosti900,000 Net Acres

Old Harry250,000 Net Acres

Southern New Brunswick320,000 Net Acres


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Atlantic Canada Focused

Large, relatively unexplored area withsignificant resource potential

Retain leases/licences for majorprospects

Higher gas netbacks; existinginfrastructure tied to N.E. market

- premium to Henry Hub ~ $1.00 in2011 at Dracut, with heat content

premium 6%

Focus on gaining partners for our 3high-impact prospects

Ability to source additionalopportunities in the region

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Industry Challenges

Prolonged low N.A. natural gas pricing cycle created by supply overhang

Dry gas resource plays currently more challenging to farm-out

Challenging environmental & social acceptance issues for oil/gas industry

Eastern Canadian resource plays face high cost and lack of maturity

Numerous N.A. J.V. opportunities on market for potential partners creatingintensive competition for available capital

Junior oil & gas companies under significant market pressure

Resource plays the size of Corridors prospects require significant capitalresources and time to de-risk in order to demonstrate value potential

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2011 Summary

Completed the Anticosti Resource study by Sproule. Best estimate (Sproule) ofundiscovered Total Petroleum Initially in Place of 34 Bboe oil equivalent (20

Bboe net Corridor) Drilled Will DeMille O-59 in Elgin, N.B.

- Strong gas shows

- Good core results

- 8 potential frac intervals

Cash flowed $9MM in 2011; reduced G&A costs and capital program in 2011 inrecognition of low gas pricing period

Filed Old Harry Project Description for Exploration Well in early 2011- Due to multiple and lengthy regulatory processes, Corridor received

extension of drilling window to Jan 2016

Retention of licences in New Brunswick, Anticosti and Old Harry- 1.5 million net acres

Focused on partnering our major prospects; engaged Macquarie to assist withFrederick Brook Shale and Old Harry Prospect


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Over 300,000 net acres; highworking interests.

Frederick Brook Shale gas:- 67 TCF gross DiscoveredResources (best estimate)

Producing up to 13 mmcf/dgross from McCully area

- Hiram Brook gas McCully

Field 103 BCF 2P grossreserves- ~25 year reserve life index

Advancing F.B. Shale potentialwith on-going Elgin Program;completed O-59 drill Q4 2011

Recent N.B. Governmentannouncement on:

- Oil/Gas EnvironmentalProtection Plan

- New Royalty RegimeDiscussion Paper

McCully/Elgin Exploration andDevelopment Area

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McCully Plant


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Frederick Brook Attributes

Large, contiguous, high working interest~120,000 net acres

Best Estimate of gross Discovered Resourcesof 67 TCF (GLJ Petroleum Consultants Ltd. FrederickBrook Shale Gas Study 2009)

Frederick Brook shales 900 1,100 m ofgross thickness in a strike slip basin

Deep basin has thickened sediments strong possibility of being highly over-pressured

Will DeMille O-59 well has eight intervalsthat are potential frac candidates (core analysisindicates some intervals have exceptional permeabilityand porosity for a shale)

Plan to re-test B-41 (Apache well) in June

O-59 Potential Frac Intervals

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COMPARISONOFMAJORSHALEGASPLAYSTOTHEFREDERICKBROOKSHALE

FrederickBrook* Barnett Haynesville Marcellus HornRiver Utica

Age Mississippian Mississippian J urassic Devonian Devonian Ordovician

EstimatedBasinarea(mi2) 180 5,000 9000 95,000 4,200

Depth(m) 1,500 - 4,000 2,000-2,500 3,000-4,000 1,200-2,500 2,500 700-2,700

Thickness(m) 1100 45-250 60-110 15-75 140-180 30-1,050

TOC(%) 1 - 3 4.5 0.5-4.0 3-12 3-8 0.3-3.1

Porosity(%) 3 - 8 2.5-5.5 8-10 5.5-7.5 5 0.7-8.8

Permeability(nD) Up to 400** 250-300 700 200-300 300

Vitrinite Reflectance(Ro) 1.2 ++ 1.0 -2.0 1.1-3.0 2.2 1.0-3.1

Pressure(psi) 3,000 - 6,000 3,000 - 4,000 12,000 5,000 1,700 - 4,200

PressureGradient(psi/ft) 0.53 - 0.6 0.43 -0.50 0.7-0.9 0.4-0.7 0.6 0.46-0.5

DiscoveredResource(TCF)*** 67 327 717 1,500 700

Geomechanics (Brittleor

Ductile)Brittle Brittle Brittle Brittle Brittle Brittle

* FrederickBrookdatadeterminedbyCorridorResourcesandthirdpartyvendors

** Weatherfordanalyses(understatespermeabilities relativetootherlaboratories)

***Estimatesofothershalegasplayshavenotbeenpreparedin accordancewithNationalInstrument51-101;arebasedon

publicallyavailableinformationandrefertooriginalgasinplace (whichisnotaNationalInstrument51-101orCOGEterm).

The

term

discovered

resources is

equivalent

to

discovered

original

gas-

in-

place(OGIP)

Gas Shale Comparison

8

Taken from other publically available resources


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Anticosti Island Highlights

1.5 MM gross acres of Macasty (Utica-equivalent) shale held in long-term licenses

Shale is well distributed over the Island

Core analysis shows good porosity andpermeability - thin turbidities and fracturesmay enhance permeability

Undiscovered Petroleum Initially-in-Place

Best Estimate of 34 Bboe (20 Bboe net toCorridor) Study conducted by Sproule

The Utica has become an exciting oil andgas play in the northeastern US (e.g. presentland valuations are in the $10,000+ per acre

range) A Schlumberger comparison between the

Anticosti Chaloupe #1 well and the OhioOSGS CO2 #1 Utica well indicates thatporosities, permeabilities and hydrocarbonsaturations are very similar

Chaloupe #1 Macasty Shale Oil Advisor Results

80% Oil Saturation

4-6% Effective Oil-Filled Porosity

40meters

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Macasty-Utica Visual Comparison

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Chaloupe #1

Macasty(Anticosti)

Utica/Point Pleasant(Ohio)

OGS CO2 #1

40meters

Porosity3-5%

Porosity4-6%

TOC2-4%

TOC

2-5%


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Exceptional Core Data

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Old Harry Highlights Opportunity to evaluate one of the largest

undrilled geological structures in EasternCanada (43,000 acres/67 sq miles) under

simple four-way closure Two target horizons: Bradelle and Brion

Island formations

Several direct hydrocarbon indicatorsidentified: satellite seepage slicks,

frequency anomalies, amplitude anomalies,and AVO anomalies

Over 1000 km of modern 2-D seismicavailable

Structures aerial extent and potential

reservoir thickness presents hugeopportunity for billion barrel oil or multiTCF gas discovery

Basin Modeling indicates light oil (~55 API)was initially generated and could be filling

the structure12

20Mil

es


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Old Harry Regulatory Summary Corridor submitted its Old Harry Exploratory

Drilling Project Description and E.A. to theC-NLOPB in February 2011

C-NLOPB eventually (with Federal EnvironmentMinisters recommendation) decided that a Strategic

Environmental Assessment (SEA) for NFLD side ofGulf was required; expected to be completed Q12013

Corridors Environmental Assessment (EA) anddrilling permits now expected to be processed in2013

Due to lengthy regulatory processes, Corridor wasgranted extension of drilling window (Phase I oflicence) to Jan 2016

The Quebec and Federal Governments signed anaccord in Mar 2011 to jointly regulate the offshoreon Quebecs side of the Gulf

Quebec has completed SEA and is expected to

decide on opening sections of Quebec side of theGulf for oil and gas activities in 2013

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Strategic Priorities

Advance our three high impact prospects by sourcing J.V. arrangements

Maintain licenses for Corridors high impact prospects

Continue to de-risk our prospects within limits of capital constraints

Maintain cash flow and ensure we optimize value of McCully assets.

Investigate developing export potential for LNG from Atlantic Canadaemploying existing infrastructure and location advantages and otheropportunities such as CNG that will promote commercialization of F.B.Shale

Gain regulatory permit approvals and social licenses for Corridor prospectsin various appropriate jurisdictions

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2011 Financial Results

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$ in thousands 2011 2010

Revenues $23,993 $29,558

Cash flow from operations $9,250 $13,250

Net G&A $4,247 $4,716

Capital expenditures $8,951 $21,006

Net working capital $9,507 $ 4,002

Production (mmscfpd) 11.5 13.2

Net loss $(79,585) $(6,912)

Net loss per share- Basic and diluted $(0.899) $(0.078)


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Q1 2012 Financial Results

$ in thousands Q1 2012 Q1 2011

Revenues $ 4,156 $ 8,024

Cash flow from operations $ 1,290 $ 3,572

Capital expenditures $ 787 $ 705

Net working capital $ 10,055 $ 9,586

Net loss $ (1,654) $ (2,178)

Net loss per share

- Basic and diluted $ (0.019) $(0.025)

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Q1 2012 Netback

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Q1 2012 Q1 2011

Production (mmscfpd) 9.9 12.7

($/mscf)

Average gas price $4.16 $6.75

Transportation expense $1.21 $1.48

Royalty expense $0.01 $0.29

Production expense $0.88 $0.98

Netback $2.06 $4.00


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2012 Outlook

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$ in thousands 2012

Production (mmscfpd) - net 9.0

Revenues $14,000

($/mscf)

Average gas price $3.70

Transportation expense $1.19

Royalty expense $0.01

Production expense $1.12

Netback $1.38

Net G&A $ 3,600

Cash flow from operations $ 2,500

Capital expenditures $ 1,500

Net working capital $10,500


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corridor resources - 2012 agm slides

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