Kodiak Inks JV Deal for New Mexico Acreage
Kodiak Energy has entered into a joint venture agreement with Thunder River Energy Inc. of Calgary, and Thunder River Energy's subsidiary holding company in New Mexico.
The properties are located in Northeast New Mexico and compromise approximately 50,000 acres. The Thunder River prospects offer Kodiak the potential of finding substantial economical oil, gas, CO2 (and possible helium) reserves in the near term.
These high impact prospects are well documented and located near existing infrastructure and at shallow to medium drilling depths. Thunder River and its associates are well experienced in this region, and have conducted significant geological research in the area. This opportunity offers Kodiak the possibility of dynamic short term growth and significant near term cash flow.
Once Kodiak acquires seismic data as contemplated in the agreement, Kodiak shall earn an undivided 12.5% working interest in all the existing Thunder River Energy leases held on the prospects (approximately 50,000 acres).
In consideration for drilling and casing, or abandonment, of each of the three test wells and the re-entry of an existing borehole on the Thunder River properties, Kodiak shall earn a 100% working interest in each well, on a well by well basis, (being an 84% net interest) before payout for that well and a 50% working interest after payout. Prior to payout Thunder will retain a standard sliding scale (5% to 15%) royalty on oil and 15% on natural gas and after payout the royalty shall convert to a 50% Working Interest on a well by well basis.
In further consideration of drilling and casing, or abandonment, of each of the three test wells and the re-entry of the existing borehole, Kodiak shall earn a sliding scale working interest of up to 3200 acres.
For fulfilling its obligation to drill the wells described above, Kodiak will earn an option to continue to drill additional wells and to earn an undivided 50% working interest in the petroleum and natural gas rights for the applicable after earned acreage amounts.. The exact timing of such rolling options is to be mutually determined by Kodiak and Thunder River.
Unless otherwise agreed by all parties, Kodiak shall be the sole operator of all wells drilled pursuant to this letter and Thunder River shall act as an advisor.
In the event of a commercial discovery, Thunder River will participate in any follow-up drilling and development of these prospects.
Kodiak will also have the right to participate with Thunder River in the acquisition of surrounding leases covering the initial prospects, and in addition, Kodiak will have the right to participate in future Thunder River New Mexico prospect lease acquisitions.
The Thunder River New Mexico properties demonstrate the presence of oil, natural gas and CO2, and potential helium resources at shallow depth (2000-6000' KB). These properties are located near existing infrastructure and offer the possibility of dynamic short term growth and significant near term cash flow.
Kodiak Energy, Inc is a Calgary based oil and gas company focused on creating a portfolio of North American assets that offer not only immediate production and cash flow but growth through exploration. The Company has lease holdings in Montana, South Eastern Alberta, a farmin agreement in the North West Territories and a joint venture in New Mexico.
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