The Company also announces that it has reached an agreement with Warren Resources E & P, Inc. to drill the initial exploratory test on the Chicken Springs Prospect in Section 29, Township 14 North-Range 100 West, Sweetwater County, Wyoming. The well will be drilled to a total depth of 6,350 feet and designed to test the potential of the Almond Formation coals and sands. An approved drilling permit was received on May 13, 2004 from the Bureau of Land Management (BLM). The Chicken Springs Prospect area encompasses over 12,000 acres. The lands are within the environmental assessment (EA) currently being completed in conjunction with the development of the Pacific Isle CBM Project. Road and location construction will commence later this month with drilling to follow. Kodiak will have a 40% working interest in the project.
"With the Pacific Isle CBM just entering the production phase and now Chicken Springs advancing to a drilling phase, Kodiak is establishing a portfolio of projects at varying levels of maturity that we anticipate will contribute to a growing cash flow base," said Kodiak President Lynn Peterson.
The wells will be initially drilled on a 160-acre spacing pattern. It is the intention of Kodiak and Warren to drill an initial pod of up to 16 wells and the parties are currently preparing applications to drill for nine additional locations. Upon obtaining satisfactory results from the initial exploratory test, the additional locations would be drilled during the third quarter of the year. The initial test well is within three miles of gas production facilities at the Trail Canyon Field. The Companies have obtained a pipeline right-of-way from the prospect area to the Trail Canyon Field.
Kodiak is an independent energy exploration and development company with its primary focus on exploring, developing and producing hydrocarbons from shallow gas projects, primarily coalbed methane, in the Rocky Mountain Region.
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