Corridor CEO says company looking west because of fracking moratorium
Corridor Resources CEO Steve Moran says company still 'very interested' in pursuing shale gas in N.B.
The president and CEO of Corridor Resources, Steve Moran, says the provincial government's hydraulic fracturing moratorium means capital spending in New Brunswick is on hold and instead the company will focus on opportunities out west.
"We have no plans for capital spending in New Brunswick until at least 2017," he said.
Moran says the company has asked the provincial government for extensions of its licences for as long as the moratorium lasts.
Corridor has seven wells in McCully Field, near Sussex, that produce natural gas but he says plans to drill new wells are now on hold.
"We can't produce wells without fracking the wells so there would be no point in drilling wells in the hope that we can frack them in the future," he said. "So we'll need some clarity from the government ultimately before we can commit to new capital in New Brunswick."
He says while the moratorium is in place, Corridor will turn its attention to Alberta and has already opened an office in Calgary.
"We're not going to wait in terms of looking to invest our money," he said.
"We've got about $25 million in the bank of positive working capital. We're going to take a look out west and see if there's anything we can do."
Opportunities in N.B. remain
Moran says in spite of the hydraulic fracturing moratorium in New Brunswick, Corridor remains committed to doing business in the province.
"At the end of the day we are still big advocates of the shale play that we are pursuing in New Brunswick and we think that it's got a fantastic opportunity to be a fantastic gas resource and we're still very interested in pursuing it."
He says while most gas companies in the country are struggling with declining natural gas prices, Corridor's New Brunswick wells are doing well because they are selling that gas into the Boston market.
Moran says over the winter Corridor was selling natural gas for between $10 and $12 U.S. for 1,000 cubic feet while his counterparts in western Canada were selling the same amount for less than $3 Canadian.
"That's one of the attractive things of operating in New Brunswick is that we get access to this great gas pricing market," Moran said.
"Unfortunately it only lasts for the winter and then the summer, our pricing is really not much different but we expect to capture that great winter pricing for a while yet."
In December, Premier Brian Gallant announced the moratorium on all forms of hydraulic fracturing in the province. The moratorium is to remain in place until five conditions are met, including the establishment of a "social licence" to permit fracking through public consultations.
Hydraulic fracturing is a method of extracting natural gas from shale gas formations beneath the earth's surface. It involves injecting a mixture of sand, chemicals, and water or some other substance, into the ground under high pressure to break the rock and capture natural gas that couldn't be obtained otherwise.
Opponents fear the process could endanger the groundwater supply and potentially have other harmful environmental effects.