May 31, 2011 / 10:02 PM / 9 years ago

UPDATE 1-Apache Canada exits shale gas JV with Corridor

* Says open to new partnerships

* Plans to drill two wells in the Elgin area (Follows alerts)

May 31 (Reuters) - Corridor Resources Inc said Apache Canada has exited the joint venture formed to develop the Frederick Brook shale in the Canadian province of New Brunswick, as the gas project failed to show promise.

Last December, the petroleum and natural gas company said negligible amount of gas was recovered after plugs were drilled in two wells at the shale gas project. [ID:nSGE6B50AV]

In March, Corridor said another two horizontal wells drilled by Apache Canada, a unit of Apache Corp , have not generated sustained gas production to date and most recently Will DeMille G-59 well showed minor gas over five days.

Corridor said a different well design and drilling program will lead to commercial development of the Frederick Brook shale.

The company intends to drill two vertical appraisal wells in the Elgin area, commencing late this year, to confirm well productivity required to proceed with a pilot phase.

Corridor said it’s open to discussions with potential joint venture partners who wish to develop the Frederick Brook shale.

Natural gas prices NGc1 have plunged from more than $13 per million British thermal units (mmBtu) in 2008 to currently trade at just over $4 (mmBtu) due to oversupply, making gas projects unattractive.

Shares of Halifax-based Corridor closed at C$4.23 on Tuesday on the Toronto Stock Exchange. They have lost nearly 40 percent of their value in the last six months. (Reporting by Aftab Ahmed in Bangalore; Editing by Sriraj Kalluvila)

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