Shares of Corridor Resources Inc. (CDH.T) are taking a hit early
Monday after results from two horizontal wells targeting shale gas
in the Elgin area of southern New Brunswick proved
disappointing.
Corridor was recently off C$3.25, or 42%, at C$4.44 in
Toronto.
Despite strong gas shows encountered while drilling the two
horizontal wells, as well as strong gas flows from a nearby
vertical well, Corridor said one has produced no gas to date and
one has produced a negligible amount.
"The preliminary responses of these wells are both unexpected
and perplexing," Corridor said in a news release early Monday.
Corridor has a joint venture deal with Apache Corp.'s (APA)
Canadian unit to appraise and potentially develop its shale gas
resources in the Elgin area.
In a note, Mackie Research Capital Corp. said the results are
disappointing, and said the failure of the wells will likely delay
development of the play and may call into question Apapche's plans
to proceed with the next phase of the farm-in agreement.
Corridor, a junior gas company based in Halifax, said Apache
Canada will now review the frac operations and flowback data and is
conducting further testing in order to determine why the wells have
responded in this manner.
-By Judy McKinnon, Dow Jones Newswires; 416-306-2100;
judy.mckinnon@dowjones.com