By the OGJ Online Staff
HOUSTON, Oct. 1 -- Corridor Resources Inc., Halifax, NS, Tuesday said it farmed out interests in its McCully natural gas discovery area in New Brunswick to EOG Resources Canada Inc.
Separately, Corridor said the No. 4 McCully, drilled to 3,150 m TD, encountered gas bearing sands in the upper Albert, extending McCully field at least 5 km to the southwest of the McCully discovery.
It ran 7-in. casing to TD and plans to complete the No. 3 and 4 wells as gas producers after a fracturing program has been prepared.
The farmout deal covers Corridor's 100% interest in two exploration licenses and its 50% interest in a third exploration license.
It excludes the four-section area covered by a joint venture agreement between Corridor and Potash Corp. of Saskatchewan Inc., where the first three McCully wells were drilled, as well as the quarter section area containing the fourth McCully well (OGJ Online, Apr. 16, 2001).
Under the farmout, EOG will drill, test, and complete three wells. EOG has options to drill additional wells to earn an interest in all of the farmout lands. Upon completion of 12 wells or the expenditure of $50 million in seismic, drilling, and development on the farmout lands, EOG will have earned 50% of Corridor's interest. Corridor will retain a 15% over-riding royalty on production during the payout period.
Norm Miller, Corridor president, said, "We believe McCully field could contain sufficient natural gas reserves to justify a pipeline connection to markets through the Maritimes & Northeast pipeline system, and EOG brings the expertise and experience to further explore this discovery."