Kodiak Energy, Inc. has announced a progress update on the previously released acquisition of Brink Energy Ltd., a private Alberta junior oil and gas corporation.
Kodiak reports that the initial audit of Brink's records is close to completion. Some additional work is yet required to complete predecessor company audits in order to finalize the overall audit. The Corporation is pleased with the progress thus far and thanks everyone involved in moving this project to completion.
In preparation for the successful closing of this acquisition, Kodiak has signed a commitment letter with a Canadian financial institution that will provide, subject to a final definitive agreement, financing for a substantial part of the cash portion of the Brink acquisition cost and first stage development of the Brink properties.
The development portion of the financing will be used to fracture the first three oil wells to increase current production. Kodiak intends to first optimize the existing production and concurrently review development and drilling plans for Q3 and Q4 of 2008 and into 2009 before advising of expected production volumes, capital commitments, taking into consideration prevailing commodity prices and cost of services.
Bill Tighe, President and CEO of Kodiak, stated, "This acquisition is exciting for our shareholders. It provides Kodiak with an opportunity to immediately realize revenue and production along with proven and probable reserves. The Spearfish resource play in addition to the identified Bakken formations will allow for many years of development drilling and production growth, with associated high net backs at current commodity prices. We will continue to update shareholders as information becomes available."
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