KDKN Stock: Kodiak Energy, Inc.: Update to Brink Energy Acquisition
Kodiak Energy, Inc. (TSX VENTURE: KDK) (OTCBB: KDKN stock) ("Kodiak" or the
"Corporation") is providing an update and clarification to the
previously announced binding letter agreement with Brink Energy Ltd.
("Brink") of Calgary, a private Alberta oil and gas corporation.
A binding letter agreement was entered into by Kodiak and Brink in
order to secure the transaction value and to ensure confidentiality
while definitive agreements were finished. Kodiak, it's auditors and
legal teams are currently concluding the due diligence and audit of
Brink's records. Once the audit is complete, the definitive agreement
will be finalized and a circular published to the Brink shareholders.
Kodiak has recently provided a $1,000,000 secured loan to Brink for
the reduction of debt, which may be converted to Brink shares at
Kodiak's option.
The details of the circular will also be made public at time of
mailing. This will include reserve evaluations, current production
volumes. At that time, Kodiak will provide estimates of future
operations.
Kodiak intends to optimize the existing production first 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.
The Brink security holders' meeting is expected to be held in August
2008. The completion of the combination is expected shortly thereafter,
subject to receipt of necessary regulatory and court approval and
satisfaction or waiver of conditions. When the aforementioned
conditions are met, Brink will then be a wholly-owned subsidiary of
Kodiak - which is expected by September 1, 2008.
As previously announced, the cash portion of the acquisition will be funded by Kodiak mostly with debt.
Mr. Bill Tighe, President and CEO of Kodiak, stated, "this
acquisition is exciting for Kodiak, because in addition to the many
years of development drilling and production growth, with associated
high net backs at current commodity prices, available in the Spearfish
resource play using primary production techniques, the formation has
shown excellent response to secondary oil recovery techniques
implemented by other operators in the area. The reserves and the
engineering data evaluated the proven, probable from the 30 potential
Spearfish wells and the Knopcik gas well property. This was the basis
for the price point set on the acquisition."
In addition to the low risk Spearfish development, initial
geological mapping has identified several Mississippian and Upper
Devonian aged exploration prospects. These prospects will be mapped and
defined by using existing trade seismic data and after acquiring some
additional seismic over the leased lands, a drilling program will help
determine the reservoir characteristics and deliverability potential.
In addition to that the Bakken formations are identified on the
properties.
Complete details of the terms of the combination are set out in the
Arrangement Agreement that will be filed by Kodiak on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) under Kodiak Energy, Inc.'s profile.
This press release does not constitute an offer of any securities.
About Kodiak
Kodiak Energy, Inc. is a Calgary, Alberta, Canada based publicly traded
oil and gas development company focused on creating a portfolio of
North American assets that offer production opportunities and asset
growth through exploration. Kodiak has lease holdings in Montana,
southeastern Alberta and high impact prospects located in the central
Mackenzie River Valley of the Northwest Territories, Canada and in
northeastern New Mexico.
This press release contains forward-looking statements. The words or
phrases "would be," "will" "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," or similar
expressions are intended to identify "forward-looking statements." .
The Brink acquisition has risk factors which may include or have
negative effects on Kodiak - such as but not limited to - the
acquisition may not be completed due to factors outside the
Corporation's control or financing complications. The effect of
additional debt or actual results could differ materially from those
projected in the Corporation's proposed oil and gas related business
due to difficultness integrating Brink's operations, risks of
liabilities related to Brink and or the assets will not be as valuable
or productive as we believe. The Corporation's business is subject to
various other risks, which are discussed in the Corporation's filings
with the US Securities and Exchange Commission and with Canadian
securities commissions. The Corporation's filings may be accessed at www.sec.gov or at www.sedar.com.
Statements made herein are as of the date of this press release and
should not be relied upon as of any subsequent date. The Corporation
cautions readers not to place reliance on such statements. Unless
otherwise required by applicable law, we do not undertake, and we
specifically disclaim any obligation, to update any forward-looking
statements to reflect occurrences, developments, unanticipated events
or circumstances after the date of such a statement.
