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Kodiak Energy raises profile
Kodiak Energy is far from bearish about Canada’s North as it examines results from a seismic program, gears up for winter drilling and builds its land holdings.
The Calgary-based minnow has just locked up a 100 percent working interest in the Little Chicago project in the Fort Good Hope region of the Northwest Territories, while feeding other North American exploration prospects into a portfolio run by its stable of three subsidiaries.
The company said July 30 that, having concluded a deal with Thunder River Energy it can take control of Exploration License 413 in the central Mackenzie River Valley and double its land position to 201,160 acres.
It will also be free to bring other regional partners into the drilling project.
In addition, Kodiak said it has been working with the Gwich’in and Sahtu communities to obtain access and benefit agreements to the two comprehensive land claims on which EL 413 is located.
As well, Kodiak is holding discussions with regulators to extend the EL 413 license.
Earlier this year, Kodiak reported it had completed a winter 2-D seismic acquisition program at Little Chicago, covering 45 kilometers and more than 500 shots, adding to seismic results covering 84 kilometers obtained the previous winter.
In May, the company said it was applying for approval of a multi-well program on EL 413 after reviewing the seismic data.
It said multiple drilling locations have been identified for each of the prospective target formations and four to six of the locations would be licensed.
Drilling is scheduled to start in December and extend to April 2009, based on weather, regulatory clearance and project financing.
Kodiak said it had started discussions with several Arctic service contractors.
The company said it intended to complete a private placement of $7.5 million, following a series of financings last year that generated gross proceeds of almost $29 million.
It said proceeds from this year’s placement are earmarked for Little Chicago, its New Mexico properties and various other prospects in Canada and the U.S.
Engineering studies of EL 413 have estimated the potential at 1 billion barrels of original oil-in-place and multi-trillion cubic feet of gas in deeper structures.
Also B.C. shale gas player Kodiak, through its subsidiary Kodiak Bear Energy, is also positioning itself in the shale gas plays of British Columbia.
Following what it described as “positive results” from a second drilling operation in the Muskwa shale, it has applied to the B.C. Oil and Gas Commission for an extension to test the gas potential of its leases.
It said a vertical well has been cased after encountering “significant gas shows” in a formation with a thickness of about 60 meters.
Kodiak is operator and has an 80 percent working interest in the lease, which is on the southeast edge of the Horn River Basin and the Muskwa shale gas prospect.
Company President Bill Tighe said that if the evaluation program gets the go-ahead and if Kodiak proves up the shales “to our expected potential, we can either move it into long-term production or divest it to one of the adjacent large industry neighbors who can use the expected results to validate their properties.”
Kodiak is close to completing a $30 million cash and paper takeover of privately held Brink Energy that will add 70,000 net acres from the Williston basin in Manitoba and the Peace River Arch of northwestern Alberta. Brink has drilled 12 wells and 10 are producing.
—Gary Park
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