Calgary-based Kodiak Energy Inc. said Monday its two-phase definitive agreement to acquire Thunder River Energy is going according to plan, with Kodiak reserving for issuance 6,867,412 common shares of Kodiak at a issue price of US$1.75 per share. This first phase of the transaction would give Kodiak controlling interest of Thunder River with Kodiak having 57% upon closing.

Under the two-phase deal, Kodiak will subscribe for 5% of the total outstanding shares of Thunder River by a private placement. After the private placement, Kodiak will also acquire 52% of Thunder's shares from five shareholders. The estimated value of the first phase of the transaction is US$12.02 million.

In the second phase announced in January, Kodiak will offer to purchase the balance of the shares of Thunder River when and if Kodiak becomes domiciled in Canada. The second phase of the transaction would be an additional issuance of up to 6,612,588 shares of Kodiak for an estimated value of US$11.57 million.

Thunder River Energy is an Alberta company that currently owns a 50% working interest in the 200,000-acre Exploration License 413 (Little Chicago Exploration) in the Northwest Territories and 95% of CIMA Holdings of New Mexico, which has 55,000 acres of mineral rights in northeast New Mexico.

An independent evaluation of the Little Chicago Exploration license was recently completed by a qualified engineering analyst. This report bases its evaluation of potential reserves in only one of the several seismic structures observed on the property. The report compares the potential of this feature to the Keg River B pool at Rainbow Lake Alberta and concludes a "best estimate" of 107 MMboe of potential reserves. The 200,000-acre Mackenzie River block is believed to potentially contain up to 1 billion barrels of oil and in excess of 2 Tcf of natural gas.

In February the National Energy Board (NEB) issued Kodiak the seismic permit for its Little Chicago Seismic Program. According to the NEB, upon completion of the program, Kodiak will have earned a 12.5% working interest in the 200,000 acres of Exploration License 413. Upon the completion of the Thunder River acquisition, Kodiak's working interest will rise to 56.5% of the acreage. Earlier this month, Kodiak reported that it had completed over 75% of the seismic program.

Kodiak said the New Mexico properties have potential of finding substantial economical oil, gas, carbon dioxide and possibly helium reserves in the near term. These high-impact prospects are well documented and located near existing infrastructure and at shallow to medium drilling depths.

Kodiak has lease holdings in Montana, southeastern Alberta, northeastern Alberta, and an agreement to purchase mineral rights both in the Northwest Territories and northeast New Mexico.

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