Kodiak Energy announced that its majority controlled subsidiary, Cougar Energy, Inc., has made another acquisition for wells, facilities and production from a private company with operations in and adjacent to the CREEnergy project.
Bill Tighe, CEO of Cougar, stated, "This recent acquisition adds key properties to our ongoing development of the CREEnergy project and on building core area production. Half the wells and production are located within the designated Peerless/Trout Lake Treaty Land Entitlement (TLE) area. With the revenue, Cougar can then pay production royalties to CREEnergy and the Peerless/Trout Lake First Nations immediately following ratification of the TLE settlement. Cougar looks forward to working with CREEnergy and the Peerless/Trout Lake First Nations to identify local employment and equipment contract opportunities. "
The acquisition adds 2 producing wells, 4 suspended wells, and associated production facilities. The existing wells and reserves are located in the Kidney and Equisetum fields. Current gross production is approximately 20 barrels of oil per day. Based on the April 1, 2009 engineering report provided by the private company, the estimated Proved and Probable oil reserves are CAD$459,000 (net present value -- 10%).
This acquisition is funded with CAD$100,000 cash paid in installments over 18 months and the issuance of 155,000 common shares of Cougar at CAD$1.30 to the private company. The shares are subject to a two year escrow agreement. The transaction is to close no later than September 30, 2009 and subject to regulatory approval.
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