Corridor Resources Inc., Halifax, NS, operator of McCully gas field in New Brunswick, said it has entered into a forward sale agreement from Nov. 1, 2013, to Mar. 31, 2014, for an average of 3,000 MMbtu/day equating to 2.8 MMscfd of gas at an average of $9.03/MMbtu (US) and an estimated netback of $6.50/Mscf (Can.).
The agreement covers one third of Corridor’s estimated production for the period. Corridor’s remaining production will be sold at daily market prices that it expects to be strong during the period due to the high basis differential in the New England markets.
Phillip Knoll, Corridor president and chief executive officer, said, “The premiums we anticipate going forward in the New England market provide us with confidence that the contemplated 2014 drilling plans will provide Corridor increased cash flows in 2014 and 2015 and also increases the economic potential for our Frederick Brook shale play.”
The 2014 drilling program is subject to the availability of equipment, regulatory approvals, and confirmation of a competitive royalty regime, he noted.