Business
Kodiak Oil & Gas acquires additional Vermillion Basin interests; sets US $30 million initial 2006 capital budget
Kodiak Oil & Gas acquires additional Vermillion Basin interests; sets US $30 million initial 2006 capital budget.
About this update from Ko Gold, Inc.
[{"type":"text","content":"\n\n\n\n\nDENVER, March 16 /CNW/ - Kodiak Oil & Gas Corp. (TSX Venture: KOG;\nGGF.PK) today announced the acquisition of 10,629 gross (9,566 net) acres of\nmineral leasehold in Sweetwater County, Wyoming. The acreage, adjacent and\ncontiguous to current Kodiak lands, is located in the Company's Pacific Rim\nproject area and is part of the Vermillion Basin deep-gas play that Company\ngeologists believe is prospective for the Baxter shale and Frontier and Dakota\nsandstones. Kodiak operates the properties.\nThe $6.9 million acquisition was from a private party, Chicken Creek LLC,\nand includes the undeveloped acreage as well as working interest (ranging from\n33% to 90%) in four wells that have been drilled during the past two years to\nevaluate the natural gas potential of the Almond and Ericson formations. One\nwell is producing from the Almond Formation and the remaining three wells are\nin various stages of completion in the Almond and Ericson. Further completion\nactivity in the area will resume in the second quarter of 2006 when annual\nwildlife stipulations on federal lands are lifted.\nAfter the acquisition, Kodiak has 45,137 gross (28,337 net) acres\nadjacent to the developing Vermillion Basin deep-gas play. The Company's\nworking interest in the properties range from approximately 45% under \n4,600 net acres to 90% under 12,000 net acres. Most of the Company's\nVermillion Basin acreage position is on federal lands.\n\n$30 Million 2006 Capital Expenditure Budget\n-------------------------------------------\n\nThe Company also today announced its 2006 capital expenditure budget of\nUS $30 million, not including the above announced Vermillion acquisition. By\ncomparison, Kodiak's 2005 CAPEX was $14 million. Kodiak plans to fund the \n2006 CAPEX from the proceeds of its recently announced private placement.\nKodiak currently plans to participate in the drilling of 31 wells (15.24 net)\nin 2006. Approximately $16 million of the 2006 capital budget will fund\ndrilling expenditures, gathering and processing infrastructure and certain\nacreage acquisitions in southwestern Wyoming. The balance of $14 million is\nallocated to Williston Basin, drilling and completion operations and\ninfrastructure.\nThe amount and allocation of actual capital expenditures will depend upon\na number of factors, including the impact of commodity ...