Kodiak Energy in conjunction with Western Crown Corporation and EnerPro Energy Corporation acquired two blocks of Petroleum Natural and Gas ("PN&G") licenses over 64 sections of land (40,960 acres) near Fort McMurray in North Eastern Alberta.
The lands represent a large component of under-explored lands immediately outside Fort McMurray. From existing mapping, only 1 well per 3 Townships penetrates below the base Woodbend (tar sands).
The licenses are for all P&NG rights from the base of the Woodbend section to 15 m into the top of the Precambrian section subject to a 2.5 % gross overriding royalty reserved for the Seller in the subject lands. Kodiak's initial working interest shall be 50%. Enerpro will also have a 50% working interest.
Western Crown Corporation will have a 10% carried working interest in the subject lands and in the first two (2) wells drilled. Western Crown shall have the option to convert its carried working interest into a 1/6 interest received proportionately from each of Kodiak and EnerPro until and including June 30, 2007 where Western Crown makes full and complete payment of its share of all joint venture costs up to the time of election including interest at Purchaser's average bank prime rate plus three (3.0 %) percent .
The lands appear ideally situated on what is hypothecated to be from our confidential regional areomag the thick Keg River - Granite Wash primary oil and gas migration path enroute updip to existing open pit mining area to the north.
If successful, the properties are situated in a premium commodity price market for delivery into tar sands operations. Tar sand plants are major consumers of blending oil, diluents and natural gas. Gas supply pipelines pass across Kodiak's lands.
A Joint Operating Agreement shall be drafted and agreed between the parties allowing Kodiak Energy Inc., to be operator of one license and EnerPro Energy Corporation operator of the other license. Kodiak shall have first right to choose which license it will operate.
Kodiak and its partner are planning a seismic program Q2 2007. Along with the current seismic program a review of seismic shot in 2003 will take place. The 2003 seismic program showed the potential for several gas wells. Following the seismic program, the Company is planning a drilling program to begin in the second quarter of 2007.
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, North Eastern Alberta, a farmin agreement in the North West Territories and a joint venture in New Mexico.
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