DENVER, Nov. 28 /CNW/ - Kodiak Oil & Gas Corp. (TSX Venture: KOG;
GGF.PK) today provided an update on its drilling, completion and acquisition
activities in the Williston Basin and Green River Basin.
Williston Basin - Montana and North Dakota
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Effective November 1, Kodiak acquired an additional 25% working interest
(WI) in the Company's Wrangler Project (Lowell and Wrangler Prospects) in
Sheridan County, Montana, bringing the Company's WI to 50%. The acquisition
includes: the producing State No. 8-16 and State No. 6-16 wells; the State
No. 10-16 well which is awaiting completion; and a 25% WI in the remaining
7,788 gross undeveloped acreage within the Project area.
Kodiak acquired an additional 12.5% WI under approximately 18,600 gross
acres in its Great Bear Project in Divide County, North Dakota, bringing the
Company's WI to 50%. The Company completed a 25-square-mile 3-D seismic
program over the prospect lands earlier this year. Total consideration for the
combined acquisition was $2.1 million dollars, which will be paid out of
current working capital.
Production casing was set on the State No. 10-16 well (50% WI; operated
by Kodiak) as part of the Company's development of its Lowell Prospect. A
drill stem test was run over the top two feet of the producing interval. The
test resulted in gas to surface and pipe recovery of 700 feet of gas and mud
cut oil. Completion work will commence this week. Pipelines and storage tanks
are being installed to combine production from the State No. 8-16 well, the
State No. 6-16 well and the State No. 10-16 well into a central production
facility.
In an effort to further develop the Lowell Prospect, the Christensen
Trust No. 15-9 well (50% WI; operated by Kodiak) commenced drilling operations
on November 24 and will be drilled to an estimated total depth of 7,700 feet
to evaluate the potential of the Mission Canyon Formation. This location is
one half mile north of the Company's producing State No. 8-16 and State
No. 6-16 wells.
Drilling operations commenced on Kodiak's Great Bear Project on November
26 with the Pederson No. 14-9H well (43.75% WI; operated by Kodiak) in Divide
County, North Dakota. The well will evaluate the Red River C Formation at an
approximate vertical depth of 10,600 feet and a total measured depth of
14,600 feet (a 4,000-foot horizontal leg). Estimated drilling time is 40 days.
The well is a direct offset to a vertical well drilled in 1984 that has
cumulative production of 173,000 barrels of oil from the Red River C Formation
and is still producing approximately 17 barrels of oil per day. Horizontal
drilling technology should improve the recovery efficiency of the productive
interval. Approximately three miles east of the current location, the Company
has built location for the Nielsen No. 14-12 well which will be drilled to a
vertical depth of 10,750 feet to evaluate the Red River C Formation.
Green River Basin - Wyoming
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The Company has acquired an additional 30% WI in the Masterson No. 24-11
well in Sweetwater County, Wyoming, increasing its total interest to 70% WI.
The well, which was put on production in August 2005, averaged 307 thousand
cubic feet (Mcf) gas per day into the sales line in October 2005. Kodiak also
acquired an undivided 4,700 net acres in the area of the producing well. The
Company anticipates drilling on these properties in 2006. Total acquisition
cost for the well and other undeveloped properties was $1.45 million dollars.
As part of the Company's development work on its Chicken Springs
Prospect, the CSFED 14100 4-32 and the CSFED 14100 4-29 wells (50% WI; non-
operator), in Sweetwater County, Wyoming have been fracture stimulated. The
wells are currently flowing back frac fluid and completion work will continue
over the next few weeks. The wells were drilled to test natural gas potential
in the Almond sands and coals and are offsets to the Company's CSFED 14100
SW29 producing well. Gathering lines and production facilities are being
installed and the new wells will be tied into the facilities immediately.
Compression facilities are currently being installed and should be completed
in December.
Meanwhile, one mile to the west the Company is currently participating in
the drilling of the CSFED 14100 2-31H well (50% WI; non-operator). Horizontal
drilling technology is being used to evaluate the potential of the thick
Almond coal. This 16-foot bench of coal is present in the surrounding wells
and was tested for gas content in the CSFED 14100 SW29 well. The gas content
of the coals was nearly 500 standard cubic feet per ton based upon side wall
cores taken from the well. The well has reached the target coals and casing
has been set just above the coals at approximately 6,200 feet. The well is
currently drilling in the coals in the horizontal portion of the first
lateral. Plans are to drill two laterals out of the well bore extending 3,500
feet each.
Approximately four miles north, the 8-9 Chicken Ranch Unit well (33.33%
WI; non-operator) has reached total depth of 8,684 feet. The well was designed
to test the natural gas potential in the Almond and Ericson Formations. Based
upon gas shows recovered during drilling operations and the electric logs,
production casing was set to total depth. The well has been fracture
stimulated in the Blair Formation, the deepest potential productive zone in
the well and gas is currently being flared from that zone and will be
evaluated over the next several days. Additional completion work will take
place in two weeks when several sands higher in the well bore are treated. The
well is a one mile offset to a well drilled in 1982 that was completed in the
Ericson sands and tested at a rate of 750 Mcf gas per day, but was plugged and
abandoned due to the lack of pipeline infrastructure and low natural gas
prices at the time. Installation of gas gathering lines will begin
immediately.
Management's Comments
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Lynn Peterson, Kodiak President and Chief Executive Officer said: "Our
progress is on target for our 2005 drilling program. With these transactions,
Kodiak today owns an average 59% WI on 102,827 acres. We have added to our
daily production with the acquired working interests. We are optimistic we
will see an additional increase in our daily production rate during the coming
weeks due to our present drilling and completion work. The increase in our
working interest will have a positive effect on our year-end reserves, while
the added acreage positions provide a strong indication of our long-term
belief of the future potential our core properties."
About Kodiak Oil & Gas Corp.
----------------------------
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" 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 Securities and Exchange Commission. By making these forward-looking
statements, the Company undertakes no obligation to update these statements
for revisions or changes after the date of this release.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
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