Kodiak Energy Prepares to Tap Into 500bcf in Montana and Alberta
Kodiak Energy has begun drilling programs in southeast Alberta and Montana targeting in excess of 500bcf of low cost shallow drilling initiatives.
Kodiak's 2006 work program will focus on an aggressive drilling program of high quality, low-risk drillable inventories in Montana and Alberta, with a long term potential of between 290 - 500 low-cost drilling opportunities that can bring immediate production while minimizing finding and leasing costs.
The company along with its Canadian joint venture partner expect to begin work imminently on their 135,000 acre project in Montana, as well as its 100% owned Manyberries prospect in southeast Alberta.
Kodiak successfully negotiated a farm in agreement in nine sections of undeveloped acres in southeast Alberta that are prospective for oil and natural gas in multiple formations. The land block is in close proximity to a mature field that has produced several million barrels of oil as well as newly developing shallow gas plays. The success rate for shallow gas on wells drilled on adjacent blocks has exceeded 98%. These lands have been developed with a high density drilling (down spacing) programs by CNRL, Enerplus, Encana. As many as eight wells per section are permitted by the Alberta Energy and Utilities Board, with low impact drilling programs (low cost) and multiple zone completions. Results typically show steady flow rates, with minimal water for fifteen years. The Company estimates approx $800,000 in costs to drill, and complete four wells. The expected initial production rate is up to 500 Mcf/d per well with recoverable reserves of up to 1 Bcf - 2 Bcf per well. There is also potential for a major target zone at 3,600 feet for crude oil. Kodiak will drill 3 wells as the operator and retain a 100% working interest on this project.
Kodiak entered into a Joint Venture with a Canadian public company from Calgary Alberta, and has committed to pay 100% of the capital costs of the seismic and 3-4 -well drilling program of the initial phase of the 135,000-acre Project in Montana. The estimated initial gross production rate is approx. 500-1000 Mcf/d per well, with recoverable gross reserves of 2 to 5 Bcf per well. An extensive seismic acquisition program began in October 2005, and so far, Kodiak has spent $125,000 with anticipated drilling commencing in Q2 2006. Additional land acquisition is planned based on the results of the preliminary development. Kodiak has provided the funds for the seismic and is advancing the capital requirements to drill 3-4 wells. The property is believed to contain up to 400 drill targets of shallow, low cost drilling and in excess of 500bcf of gas with immediate production to market . In addition, there are potential targets for crude oil within the property.
Kodiak is pleased to announce the closing of a private placement in the amount of $1,400,000 by way of 933,334 common shares at $1.50, with a consortium of European investors.
Kodiak Energy Ltd, a Calgary based Oil and Gas company is focused on creating a portfolio of domestic low risk high impact assets that offer immediate production and cash flow. Once fully developed, the Company could unlock more than 500 Bcfe in potential reserves and add value of up to $650 million. As well Kodiak Energy is targeting high impact opportunities internationally, discussions are currently ongoing and further details will follow as they become due.
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