HALIFAX, NOVA SCOTIA--(Marketwire - March 30, 2011) - (News - Market indicators): Corridor Resources Inc. ("Corridor") announced today its 2010 year end financial results and reserve evaluations. Corridor's annual financial statements, management's discussion and analysis and Annual Information Form for the year ended December 31, 2010 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.

2010 Highlights

• Cash flow from operations of $3.6 million for Q4 2010 and $13.7 million for the year ended December 31, 2010.

• Successful installation of inlet compression at Corridor's midstream facilities, under budget by $1.6 million, which resulted in an initial production uplift of 5 mmscfpd achieved early in Q4 2010 and increased Corridor's 2010 reserves.

• Average net daily natural gas production of 13.3 mmscfpd for Q4 2010, and 13.2 mmscfpd for the year ended December 31, 2010, with exit production of 13.3 mmscfpd net to Corridor.

• Capital program of $21.9 million in 2010, which included $7.3 million spent on Corridor's Anticosti exploration program and $4.4 million on inlet compression.

• Reserves (including 1P, 2P and 3P) for the McCully Field declined slightly compared to 2009. This occurred in a year of lower natural gas prices and reduced drilling activity at the McCully Field. The reserves reductions from the production and natural field declines were offset by increases resulting from the 2010 capital program at the McCully Field.

• Best estimate of gross discovered resources for the Frederick Brook shale remains unchanged at 67.3 tscf (as estimated by GLJ Petroleum Consultants Ltd. ("GLJ") in the GLJ shale resources report, effective June 1, 2009).

• Corridor began the drilling phase of an exploration well at the Old Harry prospect by completing a geohazard survey in Q3 2010 at a proposed drilling location on the Newfoundland and Labrador side of the Old Harry prospect. Subsequently, on February 22, 2011, Corridor submitted to the Canada-Newfoundland and Labrador Offshore Petroleum Board a Project Description for the drilling of this proposed exploration well within exploration license 1105 located in the Laurentian Channel of the Gulf of St. Lawrence in the Newfoundland and Labrador offshore area.

• Apache Canada Ltd. ("Apache") commenced the appraisal program of the Elgin farm-in, as updated in December 2010. Subsequently, Corridor re-tested the Green Road G-41 well to evaluate whether or not the Green Road B-41 well operations had impacted this well. The G-41 well produced gas at a constant rate of 4 mmscfpd for five days at a final flowing pressure of 1306 psi demonstrating that the frac of the B-41 well had no adverse effects on the G-41 well. Commencing on January 30, 2011, gas produced from the G-41 well was used as gas lift to assist with the clean-up of the B-41 well. The G-41 well consistently delivered the required rate of 0.5 mmscfpd to the B-41 well from the start-up of gas lift at a wellhead pressure of 2007 psi. On March 16, 2011, after 45 days of gas lift, this gas lift was stopped and, on March 17, 2011, the B-41 well was shut-in after recovering 17% of the frac fluid. The final gas rate from the B-41 well was 40 mscfpd. The Will DeMille G-59 well was shut-in on December 8, 2010 for an extended pressure build-up, with plans to re-test the well in the second quarter of 2011. Corridor and Apache are currently evaluating the performance to date of the Green Road B-41 and the Will DeMille G-59 horizontal wells and are considering options for the next steps. As per the Apache Agreement, the election by Apache to move to the next phase is required to be made on or before June 1, 2011.

• Upon review of the information and analysis performed to date, Corridor believes that there may be several reasons for the post-frac performance from the two wells drilled and fracced by Apache. The "standard" slickwater fraccing technique which was used in these wells did not generate an effective complex fracture network which is required for shale gas production, most likely due to the highly stressed formation. A different well and completion design, as evident from the results of the Green Road G-41 well, should provide more optimal frac and flow characteristics.

• It is important to recognize that the evaluation of the development potential of the Elgin shale gas resource play is in its early stages. Corridor intends to provide a further update after receiving Apache's proposed plans for potential further activity in the Elgin area.

• In 2010, Corridor completed an oil exploration drilling program on Anticosti Island. A 27 meter core was recovered and subsequently analyzed. This resulted in the discovery of a new potential shale oil play. This oil-prospective Macasty shale is present across virtually the entire island, with Corridor holding approximately 900,000 net acres (1.5 million gross acres). Corridor and Petrolia Inc. have commenced activities aimed at attracting a knowledgeable shale oil player to farm-in on this play, and initial interest by several potential players has been strong, due in part to the large area covered by this potential unconventional oil play.

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, 2010 with comparisons to the three and twelve months ended December 31, 2009.

Selected Financial Information

Financial Summary for 2010

• Natural gas revenues for the year ended December 31, 2010 decreased to $27,283 thousand from $45,479 thousand for the year ended December 31, 2009 due to a decrease in the average natural gas sales prices to $5.66/mscf in 2010 from $7.34/mscf in 2009 and a decrease in Corridor's average daily gas production to 13.2 mmscfpd in 2010 from 17.0 mmscfpd in 2009.

• Corridor's net earnings decreased to a net loss of $8,605 thousand for the year ended December 31, 2010 from net earnings of $1,667 thousand for the year ended December 31, 2009 primarily due to the decrease in natural gas revenues partially offset by the decrease in transportation and depletion expenses resulting from the lower natural gas production.

• During Q4 2010, natural gas production averaged 13.3 mmscfpd net to Corridor (including production from penalty wells) with an average natural gas sales price of $5.74/mscf, resulting in a net loss of $3,402 thousand and basic and diluted net loss per share of $0.039.

• Natural gas revenues for Q4 2010 decreased to $7,024 thousand from $9,936 thousand for Q4 2009 due to the decrease in natural gas production from 19.5 mmscfpd in Q4 2009 to 13.3 mmscfpd in Q4 2010. This decrease was partially offset by the increase in the average natural gas sales price from $5.53/mscf in Q4 2009 to $5.74/mscf in Q4 2010. The decrease in natural gas production is partly as a result of the decreased drilling activities in 2009 and 2010 in response to the lower natural gas prices and partly as a result of the shut-down of the gas plant early in Q4 2010 to finalize the installation of the inlet compressor.

• Net loss for Q4 2010 increased to $3,402 thousand from $1,825 thousand for Q4 2009 reflecting mostly the decrease in revenues offset by the decrease in transportation and depletion expenses resulting from the lower natural gas production.

Q4 2010 Netback Analysis

Natural gas revenues decreased to $7,024 thousand in Q4 2010 from $9,936 thousand in Q4 2009 due to the decrease in the average daily natural gas production to 13.3 mmscfpd in Q4 2010 from 19.5 mmscfpd in Q4 2009, which was partially offset by the increase in the average natural gas sales price from $5.53/mscf in Q4 2009 to $5.74/mscf in Q4 2010 following a significant increase in natural gas prices in the month of December 2010. The decrease in production is largely due to the decision of the Company to decrease drilling activities in 2009 in response to the lower natural gas prices.

The increase in the royalty expense per mscf for Q4 2010 to $0.21/mscf from $0.16/mscf for Q4 2009 is due to the significant increase in the natural gas prices in December 2010 which significantly increased the royalty expense for that month.

The increase in the production expense per mscf for Q4 2010 to $0.86/mscf from $0.63/mscf for Q4 2009 is due to the decrease in the natural gas production from 19.5 mmscfpd in Q4 2009 to 13.3 mmscfpd in Q4 2010 while expenses remained consistent.

Transportation expense decreased to $1.47/mscf for Q4 2010 from $1.58/mscf for Q4 2009 due to a decrease in the cost of U.S. firm tolls effective April 1, 2010, a stronger Canadian dollar as compared to the U.S. dollar in 2010 compared to 2009, and to an amount owing in Q4 2009 to M&NP US of $234 thousand for insufficient fuel charged during the period from August 2008 to July 2009.

2010 Reserve Information

Corridor currently has natural gas reserves in the McCully Field near Sussex, New Brunswick and has crude oil reserves in the Caledonia Field near Sussex, New Brunswick. 

GLJ has assessed Corridor's reserves in its reports ("the GLJ Reports") dated effective December 31, 2010 and December 31, 2009 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 gross natural gas reserves, before the deduction of royalties, using forecast prices and costs.

The reserves reductions from the production and natural field declines were offset by increases resulting from the 2010 capital program at the McCully Field. The reserves increases were a result of the successful installation of an inlet compressor at the McCully Field, the drilling of the McCully L-37 well as well as the completion activities performed at the McCully P-56 well which extended the gas accumulation in that area of the McCully Field. While these achievements positively impacted reserves, they were not sufficient to completely offset the decrease resulting from the 2010 production of 4.8 bscf and from the reduction in the number of development wells expected to be drilled in the short term as a result of low forecasted natural gas prices.

GLJ's proved plus probable reserves assessment is based on a 58 well development at the McCully Field constrained by the location of existing wells and the potential risk of encountering over-pressured formation water and pyrobitumen in future wells. However, no formation water bearing reservoirs have been confirmed to date in the northeastern part of the McCully Field where most future wells are expected to be located, potentially increasing reserves if more than 58 wells are ultimately drilled in the McCully Field.

GLJ assessed the net present value of Corridor's natural gas, oil and natural gas liquids reserves, based on forecast costs and prices, as follows: 

The decrease in the net present value of Corridor's net reserves is primarily the result of declines in natural gas prices as estimated by GLJ.

GLJ assigned to Corridor total proved crude oil reserves of 87 mbbls and total proved plus probable crude oil reserves of 521 mbbls in the GLJ Reports. The complete 2010 GLJ Report will be available in the near future on Corridor's website at www.corridor.ca, and a summary of the 2010 GLJ Report is included in Corridor's Annual Information Form for the year ended December 31, 2010, a copy of which has been filed on SEDAR at www.sedar.com.

2010 Contingent Resource Information

Corridor currently has contingent natural gas resources in the Frederick Brook shale formation in the area surrounding the Green Road G-41 well located four kilometers north of Elgin, New Brunswick. Contingent resources are those quantities of petroleum estimated, on a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is also appropriate to classify as "contingent resources" the estimated discovered recoverable quantities associated with a project in the early project stage. The primary contingencies with respect to Corridor's economic contingent resources include the uncertainty surrounding the economic viability of the related development project due to the early stage of resource evaluation. This includes the uncertainty that all internal and external approvals will be forthcoming along with documented intent to develop the resources within a reasonable time frame. Other commercial considerations that may preclude the classification of contingent resources as reserves include factors such as legal, environmental, political and regulatory matters or a lack of markets.

Resources and contingent resources do not constitute, and should not be confused with, reserves. Reserves and resources will vary from its reserve and resource estimates, and those variations could be material.

GLJ has assessed Corridor's contingent resources in its reports (the "GLJ Elgin Contingent Resources Reports") dated effective December 31, 2010 and December 31, 2009 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 Elgin Contingent Resources Reports of Corridor's gross contingent resources of natural gas, before the deduction of royalties, using forecast prices and costs.

Based on the GLJ Elgin Contingent Resources Report, Corridor's 2010 and 2009 contingent resources of natural gas reflect the postulated development of a first tranche of shale gas development in the vicinity of the Green Road G-41 vertical well. The 2010 gross contingent resources have been reduced from the 2009 gross contingent resources to reflect the increased economic risk assigned by GLJ to the completion of shale gas wells following the initial flowback results of the Green Road B-41 well and the Wille DeMille G-59 well.

It should be noted that these results did not impact the best estimate of discovered resources of shale gas of 67.3 tscf as estimated by GLJ in the GLJ shale resources report in respect of Corridor's interests in the Frederick Brook shale formation, which is effective June 1, 2009. GLJ reviewed the pertinent data collected between June 1, 2009 and December 31, 2010 in the upper part of the Frederick Brook shale formation, and made no changes to the original estimates provided in this shale resources report. Discovered resources refers to that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. There is no certainty that it will be commercially viable to produce any portion of these discovered resources.

The postulated development is limited to a silty and shaly section approximately 383 meters in thickness and 14,750 acres in area, representing less than 8% of the total Frederick Brook rock volume and total shale gas potential outlined by GLJ and shown in the attached map. The postulated development is intended to indicate development potential and is not intended to predict possible development plans for the area.

A map is available at the following address: http://media3.marketwire.com/docs/cora0330.jpg

GLJ assessed the net present value of Corridor's contingent resources of natural gas, based on forecast costs and prices, as follows:

The decrease in the net present value is also the result of declines in natural gas prices as estimated by GLJ.

There is no certainty that it will be economically viable to produce any portion of the resources.

The complete GLJ Elgin Contingent Resources Report will be available in the near future on Corridor's website at www.corridor.ca, and a summary of the report is included in Corridor's Annual Information Form for the year ended December 31, 2010, a copy of which has been filed on SEDAR at www.sedar.com.

Corridor is a junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick, Prince Edward Island and Québec 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 in Elgin, New Brunswick. In December 2009, Corridor entered into a joint venture to appraise and potentially develop its significant shale gas resources in the Elgin area.

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 quantity of reserves, contingent resources and discovered resources, net present values of reserves and contingent resources, plans regarding development of the Frederick Brook formation, exploration and development plans and Apache's potential drilling and completion plans for 2011 relating to their farm-in on Corridor's interests in the Elgin area. Statements relating to "reserves" and "resources" are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves and resources 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, 2010.

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.