Kodiak Energy, Inc. reported that the first set of lab results relating to the Lucy Project has been returned to the company on March 7, 2008 - revealing average Total Organic Compounds (TOC) values of 3.68% with peaks of 5.7%. The formation thickness demonstrated by the drilling logs shows approximately 60 meters. Kodiak will receive additional lab results as they become available in the near future. Management's data and calculations suggest 20bcf of gas per section as a baseline Muskwa resource estimate.
Management believes that these results are typical for the regional Muskwa shale gas formation.
According to the public reports, "The Muskwa Formation is an organic rich shale interval that is widely distributed throughout northeastern British Columbia. Maximum thickness of the Muskwa Formation is 75 m. The maximum TOC content measured in this study is 5.9% with an average of 3.1%. Due to the high organic contents, the Muskwa Formation shales have potential for high sorbed gas capacity." The BC government is proposing modified royalty schemes as an incentive to promote development of this and other shale gas formations in the area.
Land sale activity in the area has increased with $67 million being spent on purchases in February, for an average $640,000 per section, and over 300 additional sections posted for March and April in upcoming sales.
Kodiak is the operator of and is a 80% working interest owner in the Lucy project which comprises approximately 3 sections gross in the Northeast British Columbia.
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