/EINPresswire.com/ -- HALIFAX, NOVA SCOTIA -- (Marketwired) -- 03/30/16 -- Corridor Resources Inc. ("Corridor" or the "Company") (TSX: CDH) announced today its 2015 year-end financial results and reserve evaluations. Corridor's annual financial statements, annual management's discussion and analysis and Annual Information Form for the year ended December 31, 2015 have been filed on SEDAR at www.sedar.com and are available on Corridor's website at www.corridor.ca. All amounts referred to in this press release are in Canadian dollars unless otherwise stated.

Year End Financial Results

The following table provides a summary of Corridor's financial and operating results for the three and twelve months ended December 31, 2015 with comparisons to the three and twelve months ended December 31, 2014.

Selected Financial Information

                        ----------------------------------------------------
                               Three months ended       Twelve months ended
                                      December 31               December 31
thousands of dollars
 except per share
 amounts                        2015         2014         2015         2014
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Sales                    $     3,630  $     5,475  $    15,876  $    23,253
Net income (loss)        $   (33,952) $   (27,767) $   (31,879) $   (17,706)
Net income (loss) per
 share - basic           $    (0.383) $    (0.313) $    (0.360) $    (0.200)
Net income (loss) per
 share - diluted         $    (0.383) $    (0.311) $    (0.360) $    (0.197)
Cash flow from
 operations(1)           $       984  $     2,735  $     6,726  $    12,244
Capital expenditures     $       163  $     2,736  $       937  $    23,449
Total assets             $   133,066  $   166,267  $   133,066  $   166,267
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(1) Cash flow from operations is a non-IFRS measure. Cash flow from
    operations represents net earnings adjusted for non-cash items including
    depletion, depreciation and amortization, deferred income taxes, share-
    based compensation and other non-cash expenses.  See "Non-IFRS Financial
    Measures" in Corridor's management's discussion and analysis for the
    year ended December 31, 2015.

2015 Highlights

--  Corridor elected to shut-in most of its natural gas wells at the McCully
    Field from May 1, 2015 to October 29, 2015 which resulted in a decrease
    in Corridor's average daily gas production to 4.0 mmscfpd in 2015 from
    7.1 mmscfpd in 2014.

--  Corridor's average natural gas sales price increased to $10.23/mscf for
    the year ended December 31, 2015 from $8.59/mscf in 2014 due to
    management's decision to shut-in most of Corridor's natural gas wells
    during periods of lower natural gas prices and increase production
    during periods of higher natural gas prices, and to Corridor's forward
    sale agreements in 2015.

--  Cash flow from operations decreased to $6,726 thousand for the year
    ended December 31, 2015 from $12,244 thousand for the year ended
    December 31, 2014 due to lower natural gas production related to
    management's decision to shut-in wells during periods of lower pricing.

--  During 2015, Anticosti Hydrocarbons L.P. completed the first phase of
    its exploration program on Anticosti Island consisting of drilling the
    last seven of twelve stratigraphic corehole wells. The results of the
    cores were generally consistent with Corridor's expectations in terms of
    the Macasty shale's thickness, total organic content, porosity,
    permeability and maturity, and compare favorably to other North American
    shale oil and gas plays.

--  As at December 31, 2015, Corridor had cash and cash equivalents of
    $24,059 thousand, net working capital of $26,430 thousand and no
    outstanding debt.

Financial Summary for 2015

--  Natural gas sales decreased to $15,086 thousand from $22,135 thousand
    for the year ended December 31, 2014 due in part to management's
    decision to shut-in most of Corridor's natural gas wells at the McCully
    Field from May 1, 2015 to October 29, 2015 which resulted in a decrease
    in Corridor's average daily gas production to 4.0 mmscfpd in 2015 from
    7.1 mmscfpd in 2014. In addition, natural gas prices at Algonquin City-
    gate ("AGT") decreased to $US4.74/mmbtu in 2015 from $US8.06/mmbtu in
    2014.

--  Corridor's net loss increased to $31,879 thousand for the year ended
    December 31, 2015 from $17,706 thousand for the year ended December 31,
    2014 due primarily to the write-down of $16,209 thousand in deferred
    income tax assets and the recognition of impairment losses of $21.3
    million during the year ended December 31, 2015. An impairment loss of
    $39,150 thousand had been recognized during the year ended December 31,
    2014.

--  Net general and administrative expenses increased to $4,175 thousand in
    2015 from $3,441 thousand in 2014 due primarily to expenses of $400
    thousand relating to the establishment of the New Brunswick Responsible
    Energy Development Alliance ("NBREDA") in 2015 and to the payment of
    severances following a reduction in the personnel of the Company in Q2
    2015.

Q4 2015 Netback Analysis

                            ------------------------------------------------
                                 Three months ended     Twelve months ended
                                        December 31             December 31
thousands of dollars except
 $/mscf                            2015        2014        2015        2014
----------------------------------------------------------------------------
  Natural gas sales          $    3,433  $    5,241  $   15,086  $   22,135
  Other revenues                    197         234         790       1,118
  Royalty expense                   (70)       (160)       (371)     (1,434)
  Transportation expense           (931)       (916)     (2,781)     (3,622)
  Production expense               (785)       (718)     (2,428)     (3,036)
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  Field operating netback    $    1,844  $    3,681  $   10,296  $   15,161
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Natural gas production per
 day (mmscfpd)                      5.3         6.9         4.0         7.1
Barrels of oil equivalent
 per day (boepd)                    890       1,144         673       1,176
Average natural gas price
 ($/mscf)                    $     6.99  $     8.30  $    10.23  $     8.59

Natural gas revenues ($/boe) $    41.92  $    49.80  $    61.39  $    51.55
Other revenues ($/boe)             2.41        2.22        3.22        2.60
Royalty expense ($/boe)           (0.86)      (1.52)      (1.51)      (3.34)
Transportation expense
 ($/boe)                         (11.37)      (8.70)     (11.32)      (8.43)
Production expense ($/boe)        (9.59)      (6.82)      (9.88)      (7.07)
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  Field operating netback
   ($/boe)                   $    22.51  $    34.98  $    41.90  $    35.31
  General and administrative
   expenses ($/boe)              (12.10)     (10.40)     (16.99)      (8.01)
  Interest, foreign exchange
   and other ($/boe)               1.61        1.42        2.46        1.22
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  Cash flow from operations
   netback ($/boe) (1)       $    12.02  $    26.00  $    27.37  $    28.52
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--  Corridor's cash flow from operations netback for Q4 2015 decreased to
    $12.02/boe from $26.00/boe in Q4 2014 as a result of lower natural gas
    sales prices and natural gas production.

--  Natural gas sales decreased to $3,433 thousand in Q4 2015 from $5,241
    thousand in Q4 2014 due in part to management's decision to shut-in most
    of Corridor's natural gas wells at the McCully Field from May 1, 2015 to
    October 29, 2015 and to a decrease in natural gas sales price to
    $6.99/mscf in Q4 2015 from $8.30/mscf in Q4 2014.

--  Corridor's royalty expense for Q4 2015 decreased to $70 thousand from
    $160 thousand for Q4 2014 due to lower natural gas sales in Q4 2015.

--  Transportation expense for Q4 2015 increased to $931 thousand from $916
    thousand for Q4 2014 as lower natural gas production in Q4 2015 was not
    sufficient to offset the increased cost of transportation arising from a
    stronger U.S. dollar and the termination, on October 31, 2015, of a firm
    transportation agreement at a cost discounted from firm tolls.

--  The increase in net production expense to $785 thousand in Q4 2015 from
    $718 thousand in Q4 2014 is due to the cost of workover operations of
    $114 thousand during Q4 2015 which was mostly offset by lower salary
    expense following a downsize in the Company's personnel in Q2 2015.

2015 Reserve Information

Corridor currently has natural gas reserves in the McCully Field near Sussex, New Brunswick. GLJ Petroleum Consultants Ltd. ("GLJ") assessed Corridor's reserves in its reports ("the GLJ Reports") dated effective December 31, 2015 and December 31, 2014, which were prepared in accordance with National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities. The following table presents a summary from the GLJ Reports of Corridor's total gross natural gas reserves, before the deduction of royalties, using forecast prices and costs.

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                                                     2015 Gross   2014 Gross
                                                       Reserves     Reserves
Reserves Category                                          bscf         bscf
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  Total proved                                             41.9         45.1
  Total probable                                           19.9         20.9
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  Total proved plus probable                               61.8         66.0
  Possible(1)                                             107.2        120.9
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  Proved plus probable plus possible(1)                   169.0        186.9
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(1) Possible reserves are those additional reserves that are less certain to
    be recovered than probable reserves. There is a 10% probability that the
    quantities actually recovered will equal or exceed the sum of proved
    plus probable plus possible reserves.

GLJ assessed the net present value of Corridor's natural gas, oil and natural gas liquids reserves in the GLJ Reports, based on GLJ's forecast prices as at January 1, 2016 and 2015, as applicable, as follows:

Net Present Value ($ in million) - undiscounted

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                                              2015                      2014
----------------------------------------------------------------------------
                               Before                    Before
                               Income After Income       Income After Income
Reserves Category              Tax(1)       Tax(1)       Tax(1)       Tax(1)
----------------------------------------------------------------------------
  Proved                          104          104          152          152
  Proved plus probable            185          181          286          258
  Proved plus probable
   plus possible(2)               662          524          890          693
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(1) The estimated value of future net revenue does not represent the fair
    market value of Corridor's reserves.
(2) Possible reserves are those additional reserves that are less certain to
    be recovered than probable reserves. There is a 10% probability that the
    quantities actually recovered will equal or exceed the sum of proved
    plus probable plus possible reserves.

Net Present Value ($ in million) - discounted at 10%

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                                              2015                      2014
----------------------------------------------------------------------------
                               Before                   Before
                               Income After Income       Income After Income
Reserves Category              Tax(1)       Tax(1)       Tax(1)       Tax(1)
----------------------------------------------------------------------------
  Proved                           53           53           69           69
  Proved plus probable             79           79          113          108
  Proved plus probable
   plus possible(2)               186          159          228          190
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(1) The estimated value of future net revenue does not represent the fair
    market value of Corridor's reserves.
(2) Possible reserves are those additional reserves that are less certain to
    be recovered than probable reserves. There is a 10% probability that the
    quantities actually recovered will equal or exceed the sum of proved
    plus probable plus possible reserves.

The decrease in Corridor's proved plus probable natural gas reserves is primarily attributable to lower estimated future natural gas prices in the GLJ Reports.

The 2015 GLJ Report will be available on Corridor's website at www.corridor.ca and a summary of the 2015 GLJ Report will be included in Corridor's Annual Information Form for the year ended December 31, 2015, a copy of which will be filed on or about March 30, 2016 on SEDAR at www.sedar.com.

Anticosti Joint Venture

Corridor has a 21.67% interest in Anticosti Hydrocarbons L.P., which has undeveloped lands on Anticosti Island, Quebec. Beginning in December 2015, the Premier of Quebec stated on numerous occasions that he is not in favor of the development of hydrocarbons on Anticosti Island and that he is willing to face the financial consequences of pulling out of the project and cancelling the contracts with the parties involved. Subsequently, in March 2016, the Premier issued a statement confirming that the Quebec Government would respect the Anticosti Hydrocarbons L.P. agreements as long as the project met environmental standards.

Anticosti Hydrocarbons L.P. is planning a campaign to drill and fracture stimulate up to three horizontal wells on Anticosti Island during 2016, subject to receipt of regulatory approvals. The Quebec Government's decision to issue the remaining regulatory permits and approvals are expected in the next six weeks. The execution of the program in 2016 is dependent on receiving the regulatory approvals on a timely basis.

New Brunswick

In March 2015, the New Brunswick Government established the Commission on Hydraulic Fracturing (the "NB Commission") to determine if five conditions established by the New Brunswick Government could be satisfied to lift the moratorium on hydraulic fracturing in New Brunswick, which moratorium had been announced in December 2014.

On May 1, 2015, Corridor shut-in most of its producing natural gas wells in the McCully Field in New Brunswick due to the significant differential expected in the sale price of natural gas at AGT for the summer of 2015 relative to the winter of 2015/2016. Corridor resumed natural gas production to the Maritimes and Northeast Pipeline for sale at AGT on October 29, 2015. During this shut-in period, Corridor produced natural gas only from wells jointly owned with Potash Corporation of Saskatchewan Inc. ("PotashCorp") to meet the short-term natural gas demands of PotashCorp's Picadilly and Penobsquis mines in New Brunswick.

In response to the moratorium on hydraulic fracturing, Corridor, along with several New Brunswick businesses and organizations, formed the NBREDA to provide fact-based information to New Brunswickers interested in learning more about hydraulic fracturing and the potential for natural gas development in the province. To achieve this objective, NBREDA established a new website (www.nbnaturalgas.ca) which provides information about how hydraulic fracturing works, answers to important and frequently asked questions and identifies links to independent, third party studies on the subject.

On February 26, 2016, the NB Commission released its report to the New Brunswick Government, which report sets forth the NB Commission's findings, reviews the potential impact of shale development and identifies five options available to New Brunswick. At this time, the New Brunswick Government has not advised of its position regarding the NB Commission's report or its plans regarding the hydraulic fracturing moratorium in New Brunswick.

Old Harry

As announced in 2015, Corridor is planning to purchase a user license for Controlled Source Electro Magnetic ("CSEM") data over the Newfoundland and Labrador side of the Old Harry prospect. CSEM data is a marine geophysical tool that was developed in recent years to investigate the resistivity of geological prospects, similar to resistivity logging in well bores of potential hydrocarbon zones. Highly resistive layers in a geological structure measured with CSEM technology could indicate hydrocarbon bearing reservoirs and, therefore, would serve to support a success case. The proposed multi-client survey is in the permitting and approval stages of the project, and data acquisition is planned for the fall of 2016, pending regulatory approvals.

Corridor is in discussions with the Canada-Newfoundland Offshore Petroleum Board regarding the extension of Exploration Licence EL 1105. Corridor's rationale for the extension is that it has been prevented from completing its Environmental Assessment for a drilling licence for an extended period due to delays in regulatory approvals. As a result, Corridor is seeking relief to extend the term of its license for a period equivalent to the time lost due to the delays in the regulatory and approval process.

2016 Outlook

Based on a look-back analysis, management has determined that Corridor's shut-in strategy in 2015 was successful as natural gas production was deferred in the summer and fall of 2015 and sold during periods of higher natural gas prices in the winter of 2015/ 2016 resulting in higher netbacks for the Company. Management is currently evaluating whether to shut-in natural gas production during the summer and fall of 2016 given the weak forecasted natural gas prices at AGT during that period.

"Corridor is well positioned in 2016" said Steve Moran, President and Chief Executive Officer. "Our balance sheet is very strong, with $26 million of positive working capital at the end of 2015. Corridor expects that continued weakness in commodity prices in 2016 will present opportunities for the Company. Corridor will be selective in its review and undertaking of any such opportunities. Preservation of a strong balance sheet will be a fundamental principle of our go forward strategy."

Corridor is a Canadian junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick and Quebec and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas production and reserves in the McCully Field near Sussex, New Brunswick. In addition, Corridor has a shale gas prospect in New Brunswick, an offshore conventional hydrocarbon prospect in the Gulf of St. Lawrence and an unconventional hydrocarbon prospect through a 21.67% interest in Anticosti Hydrocarbons L.P., a joint venture with undeveloped lands on Anticosti Island, Quebec.

Forward Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this press release contains forward-looking statements pertaining to: the characteristics of Corridor's and the Anticosti Joint Venture's properties; business plans and strategies (including plans to shut-in production in 2016 to take advantage of expected price differentials, exploration and development plans, including timing of such plans (including the CSEM and Anticosti Hydrocarbons L.P.'s plans); expectation of the price of natural gas; expectations regarding Corridor's financial resilience and plans to maintain a strong balance sheet and the estimates of reserves and the net present values of reserves; the timing of filing of Corridor's Annual Information Form and the 2015 GLJ Report.

Statements relating to "reserves" are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described exist in the quantities predicted or estimated and can profitably be produced in the future.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Corridor and its shareholders.

Forward-looking statements are based on Corridor's current beliefs as well as assumptions made by, and information currently available to, Corridor concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas commodity prices, future natural gas production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. These factors may be found under the heading "Risk Factors" in Corridor's Annual Information Form for the year ended December 31, 2015.

The forward-looking statements contained in this press release are made as of the date hereof and Corridor does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Contacts:
Steve Moran, President
Corridor Resources Inc.
(902) 429-4511
(902) 429-0209 (FAX)
www.corridor.ca

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