UPDATE 2-Corridor wells disappoint, sending stock tumbling

* Shares fall as much as 50 pct in heavy trading

* No gas recovered at Frederick Brook’s Well B-41

* Negligible gas recovered at Well G-59

* Company says preliminary responses “unexpected,
perplexing”

* Analysts said shale play still has plenty of potential
(Recasts, adds analyst comments and updates share price)

By Arnika Thakur

BANGALORE, Dec 6 (BestGrowthStock) – Corridor Resources Inc
(CDH.TO: ) said on Monday a negligible amount of gas was
recovered after plugs were drilled in two wells at a shale gas
project in the Canadian province of New Brunswick, sending its
shares down as much as 50 percent.

“The preliminary responses of these wells are both
unexpected and perplexing,” the junior petroleum and natural
gas company said in a statement.

Early results from the wells in the Frederick Brook shale
play in the Elgin region of the province were expected to be
much better, said Ken Lin, an analyst with Mackie Research
Capital in Calgary.

The first well the company drilled there, G-41, had strong
flow rates that peaked at about 11.7 million standard cubic
feet a day (mmscf/d), he said.

“Clearly this is going to delay the program a bit. If they
had wells that came on as expected, they could drill more but
now … they will have to go back to step one and figure out
what’s wrong before proceeding with the drilling program,” Lin
told Reuters.

Well B-41 has recovered 1,728 cubic meters of frac fluid
and no gas, while Well G-59 has recovered 805 cubic meters of
frac fluid and negligible gas, the company said.

Despite the disappointing results, Frederick Brook is a
very early-stage shale play, and it still has plenty of
potential, Lin said. “We still see really long-term potential
there – they have a massive land position and it does take time
for these shale plays to scale up,” he said.

Apache Canada (API.N: ), a joint venture partner with
Corridor, had completed the drilling of the two horizontal
wells earlier in the year, and strong gas shows were
encountered in the horizontal sections.

Corridor said frac water recovery rates have declined at
both wells, and steps are being taken to recover additional
amounts, which could encourage the flow of gas.

“If Apache can recover more of the frac fluid and get gas
production started, the final results could be much more
impressive than this early data,” analyst Greg Chornoboy of
Jennings Capital wrote in a note to clients.

Shares of Halifax, Nova Scotia-based Corridor, which have
gained 76 percent in the past year, were down about 45 percent
at C$4.29 on Monday on the Toronto Stock Exchange. They touched
a low of C$4.94 earlier in the session. The stock was the third
most heavily traded on the TSX.
(Reporting by Arnika Thakur in Bangalore; Editing by Frank
McGurty)

UPDATE 2-Corridor wells disappoint, sending stock tumbling