yes 7000kJ in theory burnt from fat stores would equate to around 217g of fat. Your best training zone is submaximal training (before reaching your anaerobic threshold), for an average untrained person 9-10km/hr would be about right. This however is in theory, your diet must be right… if you are eating foods with too much energy then you will just be burning that rather than going into fat stores, average male requires around 11,000kJ from food each day. Eat more low GI carbs, do your cardio preferrably in the morning before eating.
I wouldn’t be very concerned about muscle loss, do some weights make sure your diet is ok getting carbs and protein (and some EFAs).
Do some weights, eat more frequent smaller meals etc.