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Apri l 8, 2011
Old Harry: Responsible Exploration and
Potential Economic Benefits
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DisclaimerForward Looking Statements
This presentation contains certain forward-looking statements and forward-looking information (collectively referred to hereinas "forward-looking statements"). 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
presentation contains forward-looking statements pertaining to the following: characteristics and potential of Old Harry; nextsteps to be undertaken by Corridor, including holding public consultations, preparing and filing with C-NLOPB anenvironmental assessment, timing of the assessment; regulatory approval of the exploration program; and the proposed
exploration program at Old Harry, including well location, well design, type of drilling rigs to be used, logistical support, timingof drilling, practices to be followed, and potential issues associated with the program and potential mitigation of such issues.
Forward-looking statements are based on Corridor's current beliefs as well as assumptions made by, and information currentlyavailable to, Corridor concerning business prospects, strategies, regulatory developments, future natural gas and oilcommodity prices, exchange rates, the ability to obtain equipment in a timely manner to carry out development activities, the
impact of increasing competition, the ability to obtain financing on acceptable terms. Although management considers theseassumptions to be reasonable based on information currently available to it, they may prove to be incorrect. 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 thatthe 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. Actualresults will differ, and the difference may be material and adverse to Corridor and its shareholders. These factors include, but
are not limited to risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing,government regulation, environmental, prices, risks may not be insurable and reserves estimates. Further informationregarding these factors and additional factors may be found under the heading "Risk Factors" in Corridor's Annual Information
Form for the year ended December 31, 2010and its most recent management's discussion and analysis, copies of which isavailable at www.sedar.com. The forward-looking statements contained in this presentation 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 thiscautionary statement.
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Presentation Outline
Overview of Corridor Resources. History of oil and gas exploration in the Gulf of St. Lawrence. Hydrocarbon potential of the Old Harry reservoir. Summary of Geohazard Survey results. Overview of Corridors proposed exploration well within EL1105 in the
Newfoundland and Labrador offshore area.
Potential for economic benefits from the oil and gas industry. Summary and conclusions.
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Overview of Corridor Resources
Eastern Canadian energy company. Main Project Areas:
Natural gas production, NewBrunswick;
Petroleum exploration, NewBrunswick;
Old Harry exploration, Gulf ofSt. Lawrence;
Oil exploration, Anticosti Island,Quebec; and
Natural gas potential, PrinceEdward Island.
Strong management and technicalteam with onshore and offshoreexperience.
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Corridor s Quality, Health, Safety and
Environmental Mandate
Mandate:
To protect people, environmentand property by
implementing an effectiveManagement System thatdemonstrates theimportance Corridor placeson Quality, Health, Safetyand Environment.
Quality, Health, Safety andEnvironment policies andprocedures are in place tosupport this mandate.
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19 MANAGEMENT SYSTEM CORE ELEMENTSContinuous Improvement
Approach
Core Element
Management CommitmentCommitmentQHSE Policies
Plan
Hazard Identification, Risk Assessmentand Risk ControlLegal and Other RequirementsObjectives and Performance TargetsManagement Plans
Implement
ResourcesRoles and ResponsibilitiesTraining, Awareness and CompetencyCommunication and ConsultationOperational ControlManagement of ChangeContractor ManagementEmergency Preparedness andResponseDocumentation and Records
Check
Monitoring and MeasurementAccidents, Incidents and Non-conformancesAudits
Review Review and Continual Improvement
Quality, Health, Safety and EnvironmentManagement System
Consistent internalstandards thatgovern all ouroperations.
Focus oncontinuousimprovement.
Based on ISOinternational
standards forenvironmentalmanagement,occupational healthand safety andquality.
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Long History of Exploration
in the Gulf of St. Lawrence
10 offshore wells drilled and manykilometers of seismic collected byother operators.
Most wells drilled in 1970-80s werelooking for oil:
5 - no hydrocarbon shows; 4 - minor shows; and 1 - significant gas discovery.
Old Harry was first identified in theearly 1970s.
Corridor Old Harry activities: 1996 - acquired Old Harry
exploration licences; 1998 / 2002 - new seismic; and 2010 - geohazard survey.
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Gulf of St. Lawrence
Basins
Anticosti Basin: Ordovician-Silurian Age; and About 415-490 million years old.
Maritimes Basin: Mid-Devonian to Permian age; About 280-390 million years old; Rock layers in the basin aremostly sandstone and shale; Mostly terrestrial (land derived)
sediments; and One marine rock layer Windsor
Group limestone, gypsum andsalt.
There are two basins from whichpetroleum could be produced in theGulf.
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Petroleum System
Source: http://geoinfo.nmt.edu/faq/energy/petroleum/Petroleum_geology_intro.pdf
Trap place where oil and gas canaccumulate.
Seal shale that prevents the escapeof oil and gas from the trap. Reservoir Rock porous rock
(sandstone at Old Harry) that can holdhydrocarbons.
Source Rock shale rich in organicmaterial.
Basic Elements of a Petroleum System
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Marit imes Basin
Covers most of thesouthern Gulf of St.Lawrence.
Old Harry is in the NE partof the basin.
Colours represent depthsto the bottom of the basin.
Historic well locationsindicated by small blackcircles.
Old Harry is located in alarge sedimentary basin.
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Old Harry Prospect
Shale Seal
Potential Reservoir
Reservoir and Source
Salt
Shale Seal
Potential Reservoir
Reservoir and Source
Salt 11
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Use of the Brion Island Well
to predict Old Harry Reservoir Rocks
10 metres of sand tested with abottom-hole drill stem test (DST).
Filled 1500 metre well bore with saltwater from reservoir in 45 minutes(= very good result).
The results showed that these sandsare capable of producing oil or gas,
even though the zone was filled withwater.
These reservoir parameters were usedto assess the hydrocarbon potential ofOld Harry.
DSTZone
The rocks in the Brion Island well were usedbecause this well is closest to Old Harry.
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Information on Source Rocks
from Scientific Literature
Type III
Type II
Type I
Oil prone
Gas prone
Dead plants and animals (organicmaterial) are converted to oil and gaswhen buried deep in the Earth.
Shale containing abundant organicmaterial are called source rocks.
Geologists study the organic material insource rocks to assess whether oil orgas could be generated.
The diagram at left can be used toclassify source rocks:
Type I oil prone; Type II oil or gas prone; and Type III gas prone.
Most source rocks in the MaritimesBasin are Type III with minor Type II.
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Brion Island Well
Corridors Source Rock Studies
Detailed geochemical studies werecompleted on the source rocks ofthe Brion Island well:
Geochemical evaluation; and Thermal Maturity
measurements.
These studies indicate that, at theimmature stage, most source rocksin the Brion Island well belong to the
oil and gas prone Type II-III organicmaterial.
These Type II-III organics couldpotentially produce oil and gas.
CapeBreton
IslandP.E.I.
Newfoundland
MagdalenIslands
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Petroleum System
Modelling at Old Harry
A specialized computer model was used to simulate the burial history of the BrionIsland Type II-III source rocks to assess the type of hydrocarbons at Old Harry. Results from Model:
The model indicates that oil and natural gas could be trapped at Old Harry. The most likely oil is a very light oil with an API gravity of 45-55o API. 15
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API Gravity of Various
Hydrocarbons
Natural Gas
Condensate
Crude Oil
Bitumen
API gravity is a measure of how light liquid petroleum is compared to water.If API gravity is greater than 10, it floats. If less than 10, it sinks.
50o API +
Heavy Crude < 28o API
Light Crude > 28o API +
12o API or less
Old Harry45-55o API
Note: API values are approximate
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Hydrocarbon Indicators
Flat Spot AVO Anomaly
Frequency AnomalySatelli te Seepage Slicks
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Update on Corridor s2010 Geohazard Site Survey
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Geohazard Survey
Conducted Safely
Conducted October 12-15, 2010. Employed a marine mammal observer
and a fisheries observer.
No fishing activity was observed. No marine mammals or sea turtles
were observed in the 500 m safetyzone during seismic acquisition. Someobserved at a distance.
Collected 63 hours of geophysical data,including low intensity seismic.
Collected side-scan sonar data. Seabed photography at 5 sites. Sediment samples at 3 sites. 19
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Date
Seafloor Characteristics at
Old Harry
Water depth is 464 m in the northwestand 478 m in the southeast.
The small depressions in seafloor areinterpreted as pockmarks:
Pockmarks are interpreted as possiblefluid escape structures; 1-3 m deep; 50 m across; 100 m in
length; and
The well will be located to avoidpockmarks.
Seafloor Bathymetry
Side-scan Sonar
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Sediment Samples and Photos
Show a Soft Muddy Sea Bottom
5 Camera stations. 3 Sediment sample stations.
Seabed Photograph GS4
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TILL
HORIZON H5BEDROCK
PROXIMAL GLACIOMARINE
DISTAL GLACIOMARINETO HOLOCENE
Sub-bottom Profile:
Characteristics of Seabed Sediments
POCKMARK
10m
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Example of Low Intensity
Seismic Line
10 m
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Geohazard Survey Indicates
Safe Location for Drill ing
Bathymetry, sidescan sonar, and sub-bottom profiler results were delivered inDecember 2010.
Seismic data and sea bottomphotography were delivered on February4, 2011.
Geohazard survey results showed: Good quality data werecollected; The seafloor was free of shipwrecks
or hazardous debris; and
A potential well location that is safefor drilling could be identified. A decision was made to submit a Project
Description to start the regulatoryapproval process for an exploration well.
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Overview of Corridors Proposed
Exploration Well within EL 1105
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Planning for a Safe and
Environmentally Responsible
Dril ling Program
Project Description filed with the C-NLOPB on February 21,outlining Corridors intention to drill 1 exploration well within EL1105.
Complete a thorough Environmental Assessment (EA): Conduct consultation; and Incorporate issues in EA.
Details of potential impacts and associated mitigation cannot beprovided until EA is complete. Complete detailed planning for the drilling operation and progress
other aspects of the regulatory approval process.26
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Exploration Well in the Newfoundland
and Labrador Offshore Area
The exploration well will be drilledsolely within EL 1105.
The drilling operation will last between 20to 50 days during an ice-free period.
The well will be located within theLaurentian Channel about 80 km WNWfrom Cape Anguille, NL.
The approximate water depth is 470m. The proposed well coordinates are in
the vicinity of Latitude 480305.294and Longitude 602339.385 (NAD83datum, geographic coordinates).
Drilling is anticipated to take placebetween mid-2012 and early 2014,depending on rig availability and
regulatory approvals.
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Drill Rig Options for Proposed
Exploratory Well
Three possible options: Moored semisubmersible; Dynamically positioned
semisubmersible; and
Dynamically positioned drill ship.
Mobile Offshore Drilling Unit
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Logist ical and Safety Support
for Drill Rig
2-3 Supply Vessels 1 at the rig at all times.
Several helicopter flights to the rigeach week.
Search and rescue helicopter onstandby.
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Example of
Well Design
Diagram is not toscale.
Similar well designto wells currentlydrilled on GrandBanks.
Shallow verticalwell with a totaldepth planned ofup to 2200 mbelow sea floor.
914mm Hole Drilled to 90m BSF
762mm Casing
660mm Hole Drilled to (300-600m) BSF
508mm Casing
311mm Hole Drilled to (2000-2200m) BSF
245mm Casing
444mm Hole Drilled to (800-1200m) BSF
340mm Casing
450-470m
Water Depth
476mm Subsea BOP
533mm Riser to Rig
Note:
Diagram not to scale30
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Old Harry Exploratory Dril ling
Environmental Assessment Document
Will be prepared in accordance with Canadian EnvironmentalAssessment Act and the final C-NLOPB Scoping Document.
Environmental Assessment will be posted on the C-NLOPB
website and reviewed by C-NLOPB, other regulatory authoritiesand the public.
Details of potential impacts and associated mitigation cannot beprovided until EA is complete.
Note: C-NLOPB conducted a Strategic Environmental Assessment of the WesternNewfoundland and Labrador Offshore Area (LGL, 2005) and its Amendment (LGL,
2007), prior to issuing EL 1105 to Corridor.
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Environmental Assessment Document
Examples of key components
(complete list to be defined in scoping document) Commercial fisheries Sensitive areas Species at risk Marine ecosystem Marine fish and shellfish Marine mammals and sea turtles Marine and/or migratory birds Physical environment Accidental events Use of the marine environment Cumulative effects
* The C-NLOPB Final Scoping
Document will outline the
components to be included and
how the Environmental
Assessment is to be prepared.
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Exploratory Dril ling - Examples of
environmental protection measures
Design and implementation of an Environmental Protection Plan. Design and implementation of a Waste Management Plan. Adherence to the Offshore Waste Treatment Guidelines. Design and implementation of contingency plans. Use of environmental criteria (to minimize emissions) in the
selection of equipment.
Communication with fishing industry and other mariners withrespect to any issues that may arise.
Use of seabird, marine mammal and fisheries observers ondrilling rigs.
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Comprehensive Modeling Work
Spill Modeling
Being conducted by SL Ross, a Canadian and internationally recognizedcompany specializing in spill modeling.
Drill Mud and Cuttings Dispersion Modeling
Being conducted by AMEC Earth & Environmental, an environmentalengineering firm.
Results
Will be included in the Environmental Assessment. We encourage comments on the modeling through the C-NLOPBregulatory process.
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C-NLOPB Regulatory Process to
Apply for Approval to
Drill an Exploration Well
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Canadian Regulatory Regime
Exploratory drilling has been taking place in the EasternCanadian offshore area since the 1960s with over 500 wellsdrilled.
There is a rigorous regulatory process that operators mustfollow to seek approvals for exploration programs.
Two key approvals for exploration drilling:(1) Operations Authorization (OA); and
(2) Approval to Drill a Well (ADW).
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Legislative Requirements
to Drill a Well
Acts Canada-Newfoundland Atlantic Accord Implementation Act Canada-Newfoundland and Labrador Atlantic Accord
Implementation Newfoundland and Labrador Act Canadian Environmental Assessment Act Oceans Act Fisheries Act Navigable Waters Protection Act Canada Shipping Act Species at Risk Act Migratory Birds Convention Act Canadian Environmental Protection Act
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Legislative Requirements
to Drill a Well
Key C-NLOPB Regulations Drilling and Production Regulations Certificate of Fitness Regulations Oil and Gas Debris and Spills Liability Regulations
Petroleum Installation Regulations Key C-NLOPB Guidance Documents
Safety Plan Guidelines Environmental Protection Plan Guidelines Drilling and Production Guidelines Physical Environmental Program Guidelines Offshore Waste Treatment Guidelines Incident Reporting and Investigation Guidelines Data Acquisition and Reporting Guidelines Compensation for Damages Guidelines Financial Responsibility Requirements Guidelines
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Operations Authorization (OA) and
Approval to Drill a Well (ADW)
Requirements
Operations Authorization (OA) Approval to Drill a Well (ADW)
Environmental Assessment Seabed Survey Report
Environmental Protection Plan Detailed Geological Prognosis
Operator Safety Management System and
Safety Plan
Detailed Drilling Program
Training and Competency Casing Program
Contingency Plans (Emergency Response,Oil Spill Response, Ice Management, etc.)
Cementing Program
Certificate of Fitness Drilling Fluids Program
Letter of Compliance for the MODU and eachstandby vessel
Casing and Wellhead PressureTesting
Evidence of Financial Responsibility BOP Configuration
Benefits Plan BOP Pressure and Function Testing
Operators Declaration of Fitness (Refer to C-NLOPB website for details)39
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Potential Economic Benefits
of the Oil and Gas Industry
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East Coast Examples of Timelines
from Exploration to Development
Hibernia First discovered in 1979 First production occurred in 1997
Terra Nova First discovered in 1984 First production occurred in 2002
White Rose
First discovered in 1984 First production occurred in 2005
East Coast large oil and gas development projects have typically
taken decades to move from the first exploratory drilling to full
scale production.41
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Oil and Gas Activity Phases
Benefits: Degree of economic spin-off increases with color depth, with thedevelopment and production phases generating the most local benefits.
At each stage, a decision is made on whether or not to progress to the next stage.
Corridor Proposed
Exploration Well
Seismic Drilling Delineation EvaluationDevelopment
ProgramApplication
BoardDecision
ProjectSanction
FEED Development Production
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Benefits that the Oil and Gas
Sector can bring to a Region
Opportunities for local businesses. Spending on research and development. Education enhancements. Training enhancements. Infrastructure development (e.g., construction, fabrication, supply
service, etc.).
J obs/Employment. Royalties and taxes paid to government revenues support social andother programs in a province (e.g., hospitals, schools, etc.). Spinoff benefits purchase of goods and services from other industries
(e.g., retail, construction, fabrication, scientific and engineering, etc.).
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Example of Benefits from the
Offshore Oil and Natural Gas
Industry for Eastern Canada
Approximately $20 billion in capital spending by the oil andgas industry in NS and NL since 1995.
Approximately $7 billion in royalties paid to the provincialgovernments to date.
Approximately 4000 people employed directly in the oil andgas industry (this does not include indirect jobs).
(Reference: Summarized from CAPP, September 2010.)
Experience shows that responsible petroleum developmentcan have a significant positive impact on the economy.
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Summary and Conclusions
Corridor has submitted a Project Description to the C-NLOPB to startthe regulatory process to drill one exploration well within EL 1105.
A large number of approvals are required to obtain an approval to drilla well within Canadas rigorous offshore regulatory regime.
We are confident the proposed well can be drilled in a safe andenvironmentally responsible manner.
We want to design the best possible exploration project with inputfrom stakeholders.
Responses to questions and concerns will be addressed in theEnvironmental Assessment and through the regulatory process.
The Environmental Assessment will be available for review on the C-NLOPB website.
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Questions or Comments
Thank You.
Toll Free: 1-888-429-4511
Email: [email protected]
Website: www.corridor.ca 46