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REBECCA PENTY
Telegraph-Journal

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MONCTON - Norm Miller is lining up big names in shale gas as partners to develop what he sees as significant plays of the unconventional resource near Sussex.

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Adam Huras/Telegraph-Journal

Norm Miller, president and CEO of Corridor Resources Inc., says New Brunswick’s shale resource is chemically unique in North America, presenting some challenges when it comes to working the resource and requiring the company to develop new techniques.

The president and CEO of Halifax-based junior exploration company Corridor Resources Inc. (TSX:CDH) told a Moncton audience Tuesday he thinks New Brunswick's shale gas resource is "quite large."

Highlighting his company's future plans as part of the Atlantic Provinces Economic Council's annual capital investment outlook presentation at the Delta Beauséjour hotel, Miller said shale gas offers his company long-term growth alongside traditional natural gas that is already flowing.

He said new technologies in fracturing should allow his firm to get at deposits in the Frederick Brook member, a geological structure that runs underground near the McCully natural gas field where the company extracts gas largely destined for the Boston market.

"All of a sudden we have a big potential," Miller told the crowd.

Speaking in an interview after his talk, the executive said he has been in conversation with "quite a number" of larger firms that have already worked shale gas.

He wants to partner with a company to tap into the hard-to-access unconventional petrochemical and plans to use the experience of executives, their technology and capital to develop the resource.

"I would say it will happen over the next year some time," Miller said. "The geology is exciting, interesting and unique in Canada."

The executive said New Brunswick's shale resource is chemically unique in North America, presenting some challenges when it comes to working the resource and requiring the company to develop new techniques.

"We have to invent the wheel in a sense," he said.

A Calgary-based engineering firm is analyzing the volume of gas resource in the shale, with a report due this month that Corridor will make public, he said. "That will be the next significant step for us."

Corridor has slowed down its exploration work and spending this year in response to a flagging economy and sub-par prices for gas.

The company's capital budget this year is $41.5 million, which is less than a previously planned $47.5 million.

"We're in a gas glut right now," he said, adding that the firm's philosophy is to spend only what it makes in the sale of gas; the company has an untouched bank line of credit of about $40 million.

But Corridor still plans to spend $12.5 million on fracturing this year in New Brunswick, employing new techniques to get at the petrochemicals.

An oil deposit discovered last December - which Miller at the time called "potentially significant-" will be fractured again using propane to push the oil out, rather than water and methanol.

The new method is expected to reduce damage to wells that can occur with injected fluids used to create fractures.

Corridor shares closed at $2.60 on the Toronto Stock Exchange Tuesday. The company's 52-week high occurred June 18, 2008, when shares traded for $10.22; the 52-week low was on Feb. 24 at $1.29 per share.