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Prospect
- Seismic area over the prospect is approximately 22 kilometers x 37 kilometers (13.7 miles x 23 miles)
Seismic Results
- 13 shallow drill targets identified (Canol and Devonian Bear Rock Prospect)
- 3 secondary medium depth targets identified (Basal Cambrian Sand/Top Pre-Cambrian Prospect)
- Massive structures clearly identified on seismic and through gravity studies
- Substantial closure, excellent source and reservoir characteristics
NI 51-101 Prospective Resource Study by Chapman Engineering, May 2008
- Three potential zones identified:
- Devonian Bear Rock Prospect
- Basal Cambrian Sand / Top Precambrian Prospect
- Canol Prospect
- Deeper, large structure is indicated at 4,500 meter range -- has not been considered in the evaluation
- Infill drilling, enhanced recovery or solution gas conservation are not included
Summary
Discussion of Little Chicago (EL413)
- Kodiak management has regularly reviewed the Exploration License 413 to monitor best options for developing this property.
- The exploration license EL413 was due to expire on September 17, 2009.
- On September 17, 2009, Kodiak received written confirmation from the Indian and Northern Affairs Canada (INAC) waiving the rental amount required to continue the exploration license EL413.
- INAC granted the concession as Kodiak's allowable expenditures for the project billed to date were at a sufficient monetary level to extend the license for a 1-year period without requiring a rental payment.
- The revised expiration date for EL413 is September 17, 2010
- Kodiak and partners will reassess its go forward options for Little Chicago during the extension period.
- The continued depressed market conditions for financing an exploration program in this area and of this size is currently not favorable.
- Major upfront and estimated capital expenditures to execute a drilling program for the winter of 2009/10 are:

- Economic considerations:
- Unfavorable dilution of stock and working interest
- With the current market conditions and the unit price of Kodiak stock -- this type of equity financing would be "extremely dilutive" to existing shareholders.
- Or, if a farm in was contemplated, extremely dilutive to Kodiak working interest.
- Marked reduction of exploration and development activity in the area
- Majority of drilling rigs and associated service equipment have moved out of the area due to exploration and development programs being cancelled or placed on hold. With a reduction of equipment in the area, timeframe and cost to mobilize equipment have increased.
- Many majors are facing the potential of losing exploration license deposits as a result of cancelling work programs and defaulting on commitments.
- Projects with proven reserves have been placed on hold.
- Lack of JV partners
- Kodiak actively searched for JV partners.
- To date, no JV partner has formally agreed to participate.
- As previously mentioned regarding working interest, a JV is likely to be very dilutive if Kodiak does not participate on an equal cash basis.
- Area infrastructure update
Conclusion
- Low commodity prices and lack of clarity for the pipeline have resulted in most of the major players in the area and Delta placing their projects on hold.
- Some of the majors have chosen to lose their license deposits rather than proceed with work programs.
- Others have proven reserves and have placed their projects on hold.
Certain documents available on this website may contain the terms "prospective resources". The Company advises investors that although these terms are recognized and required by Canadian securities regulations (under National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities), the US Securities and Exchange Commission does not recognize these terms. Investors are cautioned not to assume that any part or all of the resources in this category will ever be converted into reserves. In addition, "prospective resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that any part of an prospective resource will ever be upgraded to a higher category. Under Canadian rules, estimates of prospective resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a "preliminary assessment" as defined under National Instrument 51-101. Under US rules, Investors are cautioned not to assume that part or all of a prospective resource exists, or is economically or legally recoverable.
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