Old Harry: Responsible Exploration and Potential Economic Benefits

April 8, 2011

Disclaimer
Forward Looking Statements
This presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "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; next steps to be undertaken by Corridor, including holding public consultations, preparing and filing with C-NLOPB an environmental 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, timing of 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 currently available to, Corridor concerning business prospects, strategies, regulatory developments, future natural gas and oil commodity 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 these assumptions 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 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. 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 information regarding 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, 2010 and its most recent management's discussion and analysis, copies of which is available 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 this cautionary 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, New Brunswick; Petroleum exploration, New Brunswick; Old Harry exploration, Gulf of St. Lawrence; Oil exploration, Anticosti Island, Quebec; and Natural gas potential, Prince Edward Island.

Strong management and technical team with onshore and offshore experience.
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Corridors Quality, Health, Safety and Environmental Mandate

Mandate: To protect people, environment and property by implementing an effective Management System that demonstrates the importance Corridor places on Quality, Health, Safety and Environment.

Quality, Health, Safety and Environment policies and procedures are in place to support this mandate. 5

Quality, Health, Safety and Environment Management System

19 MANAGEMENT SYSTEM CORE ELEMENTS
Continuous Improvement Approach
Management Commitment

Core Element
Commitment QHSE Policies Hazard Identification, Risk Assessment and Risk Control Legal and Other Requirements Objectives and Performance Targets Management Plans Resources Roles and Responsibilities Training, Awareness and Competency Communication and Consultation Operational Control Management of Change Contractor Management Emergency Preparedness and Response Documentation and Records Monitoring and Measurement Accidents, Incidents and Nonconformances Audits Review and Continual Improvement

Consistent internal standards that govern all our operations. Focus on continuous improvement. Based on ISO international standards for environmental management, occupational health and safety and quality.
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Plan

Implement

Check Review

Long History of Exploration in the Gulf of St. Lawrence

10 offshore wells drilled and many kilometers of seismic collected by other operators. Most wells drilled in 1970-80s were looking for oil: 5 - no hydrocarbon shows; 4 - minor shows; and 1 - significant gas discovery.

Old Harry was first identified in the early 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

There are two basins from which petroleum could be produced in the Gulf.
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 are mostly sandstone and shale; Mostly terrestrial (land derived) sediments; and One marine rock layer Windsor Group limestone, gypsum and salt.

Petroleum System
Basic Elements of a Petroleum System

Source: http://geoinfo.nmt.edu/faq/energy/petroleum/Petroleum_geology_intro.pdf

Trap place where oil and gas can accumulate. Seal shale that prevents the escape of oil and gas from the trap. Reservoir Rock porous rock (sandstone at Old Harry) that can hold hydrocarbons. Source Rock shale rich in organic material.

Maritimes Basin
Old Harry is located in a large sedimentary basin.

Covers most of the southern Gulf of St. Lawrence. Old Harry is in the NE part of the basin. Colours represent depths to the bottom of the basin. Historic well locations indicated by small black circles.

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Old Harry Prospect

Shale Seal Reservoir and Source Potential Reservoir

Salt

Shale Seal Reservoir and Source Potential Reservoir

Salt

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Use of the Brion Island Well to predict Old Harry Reservoir Rocks
The rocks in the Brion Island well were used because this well is closest to Old Harry.

DST
Zone

10 metres of sand tested with a bottom-hole drill stem test (DST). Filled 1500 metre well bore with salt water from reservoir in 45 minutes (= very good result). The results showed that these sands are capable of producing oil or gas, even though the zone was filled with water. These reservoir parameters were used to assess the hydrocarbon potential of Old Harry.
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Information on Source Rocks from Scientific Literature

Type I

Oil prone

Dead plants and animals (organic material) are converted to oil and gas when buried deep in the Earth. Shale containing abundant organic material are called source rocks. Geologists study the organic material in source rocks to assess whether oil or gas could be generated. The diagram at left can be used to classify source rocks:

Type II

Gas prone
Type III

Type I oil prone; Type II oil or gas prone; and Type III gas prone.

Most source rocks in the Maritimes Basin are Type III with minor Type II.
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Brion Island Well Corridors Source Rock Studies

Detailed geochemical studies were completed on the source rocks of the Brion Island well:

Newfoundland

Geochemical evaluation; and Thermal Maturity measurements.

Magdalen Islands

P.E.I.

Cape Breton Island

These studies indicate that, at the immature stage, most source rocks in the Brion Island well belong to the oil and gas prone Type II-III organic material. These Type II-III organics could potentially produce oil and gas.
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Petroleum System Modelling at Old Harry

A specialized computer model was used to simulate the burial history of the Brion Island 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.
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API Gravity of Various Hydrocarbons

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. Natural Gas Condensate 50o API + Old Harry 45-55o API

Crude Oil

Light Crude > 28o API + Heavy Crude < 28o API

Bitumen

12o API or less

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Note: API values are approximate

Hydrocarbon Indicators
Satellite Seepage Slicks Frequency Anomaly

Flat Spot

AVO Anomaly

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Update on Corridors 2010 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 safety zone during seismic acquisition. Some observed 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.
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Seafloor Characteristics at Old Harry

Water depth is 464 m in the northwest and 478 m in the southeast. The small depressions in seafloor are interpreted as pockmarks:
Pockmarks are interpreted as possible fluid escape structures; 1-3 m deep; 50 m across; 100 m in length; and The well will be located to avoid pockmarks.

Seafloor Bathymetry
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Date

Side-scan Sonar

Sediment Samples and Photos Show a Soft Muddy Sea Bottom

5 Camera stations. 3 Sediment sample stations.

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Seabed Photograph GS4

Sub-bottom Profile: Characteristics of Seabed Sediments

POCKMARK DISTAL GLACIOMARINE TO HOLOCENE

TILL HORIZON H5 BEDROCK

10 m

PROXIMAL GLACIOMARINE

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Example of Low Intensity Seismic Line

10 m

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Geohazard Survey Indicates Safe Location for Drilling

Bathymetry, sidescan sonar, and subbottom profiler results were delivered in December 2010. Seismic data and sea bottom photography were delivered on February 4, 2011. Geohazard survey results showed: Good quality data were collected; The seafloor was free of shipwrecks or hazardous debris; and A potential well location that is safe for drilling could be identified.

A decision was made to submit a Project Description to start the regulatory approval 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 Drilling Program

Project Description filed with the C-NLOPB on February 21,

outlining Corridors intention to drill 1 exploration well within EL 1105.

Complete a thorough Environmental Assessment (EA):

Conduct consultation; and Incorporate issues in EA.

Details of potential impacts and associated mitigation cannot be

provided until EA is complete.

Complete detailed planning for the drilling operation and progress

other aspects of the regulatory approval process.
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Exploration Well in the Newfoundland and Labrador Offshore Area

The exploration well will be drilled solely within EL 1105.

The drilling operation will last between 20 to 50 days during an ice-free period.

The well will be located within the Laurentian Channel about 80 km WNW
from Cape Anguille, NL.

The approximate water depth is 470m. The proposed well coordinates are in the vicinity of Latitude 480305.294 and Longitude 602339.385 (NAD83 datum, geographic coordinates). Drilling is anticipated to take place between mid-2012 and early 2014, depending on rig availability and regulatory approvals.

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Drill Rig Options for Proposed Exploratory Well

Mobile Offshore Drilling Unit

Three possible options: Moored semisubmersible; Dynamically positioned semisubmersible; and Dynamically positioned drill ship.

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Logistical and Safety Support for Drill Rig

2-3 Supply Vessels

1 at the rig at all times.

Several helicopter flights to the rig

each week.

Search and rescue helicopter on

standby.

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Example of Well Design

533mmRisertoRig 450470m WaterDepth

Diagram is not to scale. Similar well design to wells currently drilled on Grand Banks. Shallow vertical well with a total depth planned of up to 2200 m below sea floor.

476mmSubseaBOP

914mmHoleDrilledto90mBSF 762mmCasing

660mmHoleDrilledto(300600m)BSF 508mmCasing

444mmHoleDrilledto(8001200m)BSF 340mmCasing

Note: Diagram not to scale

311mmHoleDrilledto(20002200m)BSF 245mmCasing

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Old Harry Exploratory Drilling Environmental Assessment Document

Will be prepared in accordance with Canadian Environmental

Assessment 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 authorities and the public.

Details of potential impacts and associated mitigation cannot be

provided until EA is complete.

Note: C-NLOPB conducted a Strategic Environmental Assessment of the Western Newfoundland 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 * The C-NLOPB Final Scoping Marine fish and shellfish Document will outline the to be included and Marine mammals and sea turtles components how the Environmental Assessment is to be prepared. Marine and/or migratory birds Physical environment Accidental events Use of the marine environment 32 Cumulative effects

Exploratory Drilling - 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 with

respect to any issues that may arise.

Use of seabird, marine mammal and fisheries observers on

drilling rigs.
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Comprehensive Modeling Work

Spill Modeling Being conducted by SL Ross, a Canadian and internationally recognized company specializing in spill modeling. Drill Mud and Cuttings Dispersion Modeling Being conducted by AMEC Earth & Environmental, an environmental engineering firm. Results Will be included in the Environmental Assessment. We encourage comments on the modeling through the C-NLOPB regulatory 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 Eastern

Canadian offshore area since the 1960s with over 500 wells drilled.

There is a rigorous regulatory process that operators must

follow 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 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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Key C-NLOPB Guidance Documents

Operations Authorization (OA) and Approval to Drill a Well (ADW) Requirements

Operations Authorization (OA) Environmental Assessment Environmental Protection Plan Operator Safety Management System and Safety Plan Training and Competency Contingency Plans (Emergency Response, Oil Spill Response, Ice Management, etc.) Certificate of Fitness Approval to Drill a Well (ADW) Seabed Survey Report Detailed Geological Prognosis Detailed Drilling Program Casing Program Cementing Program Drilling Fluids Program

Letter of Compliance for the MODU and each Casing and Wellhead Pressure standby vessel Testing Evidence of Financial Responsibility Benefits Plan Operators Declaration of Fitness BOP Configuration BOP Pressure and Function Testing
(Refer to C-NLOPB website for details)
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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.

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Oil and Gas Activity Phases

At each stage, a decision is made on whether or not to progress to the next stage.

Seismic

Drilling

Delineation

Evaluation

Development Program Application

Board Decision

Project Sanction

FEED

Development

Production

Corridor Proposed Exploration Well

Benefits: Degree of economic spin-off increases with color depth, with the development and production phases generating the most local benefits.

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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.).

Jobs/Employment. Royalties and taxes paid to government revenues support social and
other 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 and

gas industry in NS and NL since 1995.

Approximately $7 billion in royalties paid to the provincial

governments to date.

Approximately 4000 people employed directly in the oil and

gas industry (this does not include indirect jobs).
(Reference: Summarized from CAPP, September 2010.)

Experience shows that responsible petroleum development

can 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 start

the regulatory process to drill one exploration well within EL 1105.

A large number of approvals are required to obtain an approval to drill

a well within Canadas rigorous offshore regulatory regime.

We are confident the proposed well can be drilled in a safe and

environmentally responsible manner.

We want to design the best possible exploration project with input

from stakeholders.

Responses to questions and concerns will be addressed in the

Environmental Assessment and through the regulatory process.

The Environmental Assessment will be available for review on the CNLOPB website.
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Questions or Comments

Thank You.
Toll Free: 1-888-429-4511 Email: info@corridor.ca

Website: www.corridor.ca

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