HALIFAX, NOVA SCOTIA — (Marketwire) — 11/13/12 — (TSX: CDH) Corridor Resources Inc. (“Corridor”) announced today its third quarter financial results.
The following table provides a summary of Corridor–s financial and operating results for the three and nine months ended September 30, 2012, with comparisons to the three and nine months ended September 30, 2011. Corridor–s financial statements and management–s discussion and analysis for the third quarter have been filed on SEDAR at and are available on Corridor–s website at .
All amounts referred to in this press release are in Canadian dollars unless otherwise stated.
Selected Financial Information
Highlights
Q3 2012 Netback Analysis
Natural gas revenues decreased to $2,616 thousand in Q3 2012 from $4,722 thousand in Q3 2011 due to the decrease in the average natural gas sales price to $3.51/mscf in Q3 2012 from $4.63/mscf in Q3 2011 and the decrease in the average daily natural gas production to 8.1 mmscfpd in Q3 2012 from 11.1 mmscfpd in Q3 2011. During the quarter, natural gas production decreased as Corridor completed the annual shut-down at the McCully Field and continued the shut-in of four McCully wells, which were initially shut-in in May 2012. The production lost during the seven day shut-down was partially replaced with flush production at start-up.
The decrease in the royalty expense per mscf for Q3 2012 to nil from $0.22/mscf for Q3 2011 is due to the significant decrease in the natural gas revenues resulting from low natural gas prices and production in Q3 2012, while the deductions allowable in the royalty calculation did not decrease significantly.
Transportation expense decreased to $923 thousand for Q3 2012 from $1,268 thousand for Q3 2011 due to the decrease in natural gas production and a decrease of $0.06/mmbtu in the cost of the firm transportation toll on the Canadian side of the Maritimes and Northeast Pipeline effective January 1, 2012.
Net production expense for Q3 2012 decreased to $766 thousand from $999 thousand in Q3 2011 due to the decrease in work-over activities in 2012 and the decrease in utilities expense due to lower usage as a result of the shut-down in Q3 2012.
2012 Outlook
Corridor has increased its forecasted 2012 cash flow from operations from $2.5 million to $3.0 million to reflect the decrease in forecasted 2012 production expenses and G&A expenses.
Corridor has increased its 2012 capital budget by $2.0 million to approximately $4.0 million to include an exploration program on Anticosti Island, Quebec and the re-testing of the Green Road B-41 shale gas well near Elgin, New Brunswick.
Based on available working capital of $9.5 million at December 31, 2011 and Corridor–s revised capital budget of approximately $4.0 million, Corridor is forecasting a net positive working capital of approximately $8.5 million at December 31, 2012 with no outstanding debt.
Corridor is an Eastern 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 reserves and production in the McCully Field near Sussex, New Brunswick and discovered crude oil reserves in the Caledonia Field near Sussex, New Brunswick in 2008. In addition, Corridor has contingent resources and discovered resources of shale gas in Elgin, New Brunswick.
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: business plans and strategies; plans to conduct an exploration program on Anticosti Island and to re-test the Green Road B-41 well; natural gas sales, production, natural gas prices, expenses and cash flow from operations in 2012; debt and net positive working capital as at December 31, 2012 and the 2012 capital budget.
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, 2011.
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.
Certain of the forward-looking statements in this press release may constitute “financial outlooks” as contemplated by National Instrument 51-102 Disclosure Obligations, including information related to projected revenues, expenses, capital expenditures and production for 2012 and working capital and net debt as at December 31, 2012, which are provided for the purpose of forecasting the financial position of Corridor at the end of the 2012 financial year. Please be advised that the financial outlook in this press release may not be appropriate for purposes other than the one stated above.
Contacts:
Phillip R. Knoll, President
Corridor Resources Inc.
Ph:(902) 429-4511
F:(902) 429-0209