₪ David Pescod's Late Edition May 18, 2007
CORRIDOR RESOURCES (T-CDH) $11.70 +0.49
PETROWORTH RES. (US:PTWR) $2.17 +0.02
More updates today from Corridor Resources on their ongoing drilling on the McCully play in New Brunswick. This continues to be a developing story that sooner or later, should appeal to the “Disney-types” to make some sort of movie.
Who would have thought you’d find natural gas in New Brunswick of all places, but then the team behind Corridor, has been knocking around that area of the world for the last decade and its been the last two years that have been so fruitful. Thanks again to Andy, for making us aware of this story back under $2.00.
The news today on their latest well, the McCully E-38, was a bit of a surprise in that the two zones that are usually so productive—the “A” and “B” sands which are the main pay in of those are thin and don’t appear to be productive. On the other hand, they’ve got a good chunk—almost 200 meters of Frederick Brook shale formation, so the well is being cased and suspended in preparation for fracing and production testing operations in August.
Meanwhile, I’m sure the team at Corridor has had questions asked of what they were doing for much of the last few years, but there is one concern many followers do have of the company at this time and that’s about their plans to drill in Prince Edward Island. They were already off on that wild goose chase a few years ago that resulted in lots of money spent with nothing to show for it and now they appear to be headed back to PEI to try that wild goose chase yet again.
The problem is about rigs and it may have held Corridor back quite a bit from what they could have accomplished. To move a rig from Alberta, the last time took 53 transports of equipment to move down and needless to say, providing necessary services so far from Alberta, is expensive. At a time when you would hope to be ramping up production into the pipeline ASAP, and drilling as many holes in this area, why would you be moving a precious rig over to PEI?
For followers of Corridor, you probably realize that the stock at this level is fairly priced if not fully priced. The next excitement comes within six weeks the suggestion is, when they start testing some of the Frederick Brook shale to see if it can be productive.
The suggestion has been in the past by some followers that have been proven correct over time, that if the Frederick Brook shale is productive, there could be yet another big appreciation in this stock.
But the big excitement still comes in the forth quarter of this year (at least according to current company plans) when they drill and test the big prize...the deep Dawson Settlement. So why are they going to Prince Edward Island to use a very precious rig when they could be drilling the two obvious targets right away?
The concern about PEI is that even if you do find some gas, there is absolutely no infrastructure there. Having lots of relatives on the Island, we know it is a pleasant place to live, to visit, to tour, but if you find gas there, so what? It’s stranded for a long, long time.
Some suggest the company plan might be that if they do find gas, to get a power station built. But you know that won’t happen by next Tuesday and as far as building a line from PEI to wherever, you just wonder how many years that would take when it’s been so long just getting facilities close to production when the New England Pipeline is only 20 miles away from McCully. Plus, the chance of success is probably your exploration average of 10%...or 90% chance of missing!
Does this make sense at all? It’s just another question that the team at Corridor has probably faced over the past years, but nonetheless, the question has to be asked...
CONNACHER OIL & GAS (T-CLL) $3.87 -0.01
It’s been more than a little fun with Oilexco the last couple of days as it breaks to ever new highs. As to why it’s hitting there, we are not sure whether it’s the PR tour they are doing through major North American cities or the fact that they are within hours or days (we’ve been hearing this for a while, right?) of finally seeing production.
Obviously, the fact that there will soon be cash flow has made a difference to Oilexco’s share price.
We should keep that in mind as we watch Connacher Oil and Gas stock, not attracting a lot of attention at this time...but production does get ever closer.
When we talked to Dick Gusella today, he tells us that their financing will take another week to close, so there is nothing that he can say at this time other than things are all on schedule...
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