DENVER, CO, Aug. 30 /CNW/ - Kodiak Oil & Gas Corp. (TSX Venture: KOG) today announced that it has received CDN$2,571,218 from the exercise of 91% of its Bonus Warrants outstanding. Investors exercised 2,571,218 out of a total of 2,824,643 Bonus Warrants outstanding. Bonus Warrants entitled the holders to purchase one common share for each warrant exercised at CDN$1.00. The balance of 253,425 Bonus Warrants expired. The Company has no other warrants outstanding and with this transaction, Kodiak's outstanding and issued common shares are 47,481,758 and its fully diluted shares are 50,520,258. "We appreciate the support of our shareholders," said Kodiak President Lynn Peterson. "With the proceeds from the Bonus Warrants, the Company's balance sheet has in excess of US$6.5 million cash and cash equivalents. These funds will provide the necessary capital to fund the Company's exploration program into 2006 when the Company expects to be generating cash flow." Operations Update ----------------- Wyoming ------- The Masterson Federal No. 24-11 well (40% working interest (WI); non-operator) in Sweetwater County, Wyoming has been connected to the sales line. The well commenced production on August 24, 2005 and has flowed at an average rate of 271 thousand cubic feet of gas per day (mcfd) on a 10/64th choke during the first week. The well produces from the Second Frontier Formation. Location work has commenced for the Chicken Ranch 8-9 well (33.33% WI; non-operator), the initial test well on the Company's Chicken Ranch Unit in Sweetwater County, Wyoming. Drilling is scheduled for the third quarter 2005. The well will be drilled to an approximate depth of 8,600 feet to the natural gas potential in the Almond and Ericson Formations Completion work continues on the Cornish 1-24 (25% WI; non-operator) in the Company's Chicken Creek Prospect. The well was drilled to test natural gas potential in the Almond and Ericson Formations. A drilling contract has been signed for the drilling of five wells on the Chicken Springs Prospect (50% WI before payout; non-operator). Drilling, with wells anticipated to be drilled consecutively, should commence in the third quarter 2005. These wells will surround the PRFED 14100 SW29 well, which was placed on production in late June 2005. The wells are being drilled on 160 acres spacing initially. Williston Basin --------------- Completion work has commenced on the Company's State No. 8-16 well (25% WI; Kodiak Operates), located in the Company's Lowell Prospect in Sheridan County, Montana. It is anticipated that the well would be producing oil from the Mission Canyon by the end of this week. The Company is currently permitting three development locations offsetting the State No. 8-16. Additionally, the Company is permitting an exploratory location four miles to the west of the State No. 8-16, the Wrangler Prospect, which is a similar test to the Lowell Prospect, to evaluate the potential of the Mission Canyon Formation. Drilling is scheduled for early in the fourth quarter this year. Kodiak recently completed data acquisition and processing of a 24.55 square mile 3-D seismic program over its Great Bear Prospect (37.5% WI; Kodiak Operates) in Divide County, North Dakota. Subject to finalizing a drilling contract, drilling is expected to commence during the fourth quarter to evaluate the Red River Formation at a proposed total depth of 10,500 feet. Permitting work is underway on the Grizzly Prospect (37.5% WI; Kodiak Operates) in McKenzie County, North Dakota. The initial test well will evaluate the potential of the Bakken Formation and should be drilled the first half of 2006. About Kodiak Oil & Gas ---------------------- Kodiak Oil & Gas, headquartered in Denver, is an independent energy exploration and development company focused on exploring, developing and producing oil and natural gas in the Williston and Greater Green River Basins in the U.S. Rocky Mountains. The common shares of the Company are listed for trading on the TSX Venture Exchange under the symbol "KOG.V" and the U.S. symbol "KOGGF." Forward-Looking Statements -------------------------- This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the prices of oil and gas, uncertainties inherent in estimating quantities of oil and gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks, liquidity and capital requirements, the effects of governmental regulation, adverse changes in the market for the Company's oil and gas production, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the BC Securities Commission. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. If you would like to receive press releases via email contact Heather Colpitts (heather(at)chfir.com) and specify "Kodiak releases" in the subject line. %SEDAR: 00007900E