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Apache abandons New Brunswick shale-gas effort

SHALE-GAS exploration on the east coast of Canada suffered a blow after US independent Apache decided to withdraw from New Brunswick following disappointing drilling results.

Halifax-based Corridor Resources announced that its senior partner elected to withdraw from further development in the east-coast province after two test wells failed to recover commercial quantities of natural gas.

"It is important to recognise that the evaluation of the Frederick Brook shale-gas resources is still in its early stages," Corridor said in statement.

Although the company's shares fell more than 25% on the Toronto Stock Exchange following the news, Corridor said it plans to find another partner to continue with a pilot production programme.

It remains confident that changes to the well design will yield better flow rates that will allow it to recover some 67.3 trillion cubic feet (cf) of contingent resources, as identified by third-party engineers.

But the task is made unquestionably harder by the exit of Texas-based Apache, which is considered a pioneer in unconventional shale-gas development in both Canada and the US.

Apache is a partner with Calgary-based Encana in the Horn River shale basin in northeast British Columbia, where it is proceeding with commercial development.

According to Corridor, the Will DeMille G-59 and Green Road B-41 wells were hydraulically fractured using large slick-water techniques, but failed to generate sustained shale-gas production.

Corridor intends to drill two vertical appraisal wells in the Elgin area of New Brunswick late this year and proceed with a pilot phase with a capacity of about 40 million cf a day in late 2013.

During the pilot phase, Corridor said it would evaluate various drilling and completion techniques.

Corridor added that it would provide further details on the Frederick Brook shale-gas development in early June.


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