DENVER, April 11 /CNW/ - Kodiak Oil & Gas Corp. (TSX Venture: KOG;
GGF.PK) today provided an update on its drilling and completion activities
in the Williston Basin and Green River Basin and its 2005 year-end reserve
estimates.
Williston Basin - Montana and North Dakota
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Kodiak recently commenced drilling operations on the Kodiak Grizzly
No. 13-6H well (62.5% Working Interest (WI); operated by Kodiak) in McKenzie
County, North Dakota. The well is projected to take approximately 45 days to
drill. The well is expected to be drilled to an approximate vertical depth of
10,600 feet, with multilateral legs for total measured depth of approximately
22,000 feet to test the oil-prone Bakken Formation. Approximately two miles to
the west, the Company is permitting the Grizzly Federal No. 4-11H well (62.5%
WI; operated by Kodiak) which the Company plans to drill immediately following
the Kodiak Grizzly No. 13-6H well.
Completion work continues on the Nielsen No. 14-12 well (50% WI; operated
by Kodiak) in Divide County, North Dakota. Kodiak drilled the well to a
vertical depth of 10,750 feet to evaluate the Red River C Formation and is
attempting a completion in an interval from 10,656 feet to 10,666 feet.
The Company intends to commence completion work on the Pederson No. 14-9H
well (43.75% WI; operated by Kodiak) in Divide County, North Dakota
immediately following work on the Nielsen No. 14-12. The horizontal well was
drilled to an approximate vertical depth of 10,600 feet and a total measured
depth of 14,725 feet to test the Red River C Formation.
Permitting is underway on two development locations at the Woodward Field
(Wrangler/Lowell prospect area), (50% WI; operated by Kodiak) in Sheridan
County, Montana. Kodiak is currently operating four wells in the producing
Field and anticipates development drilling to commence in the third quarter.
As part of the development program, the Company is planning a 20-square-mile
3-D program in the prospect area during the second quarter of 2006.
Green River Basin - Wyoming
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Permitting procedures are in process for two wells on Kodiak's Vermillion
Basin (Pacific Rim project area) acreage in Sweetwater County, Wyoming. The
Company anticipates having an approximate 50% working interest in the two
wells that will evaluate the potential of the developing deep-gas play in the
Baxter Shale and Frontier sandstone at a proposed total depth of 14,000 feet.
The Company anticipates that the initial test well will spud in the late
second quarter with the second well to spud in the fall of 2006.
The Company intends to participate in up to five wells on its Chicken
Springs Prospect (50% WI; non-operator) in Sweetwater County, Wyoming.
Drilling permits have been approved by the Bureau of Land Management for these
locations and drilling is currently scheduled for mid to late summer. The
locations will be drilled vertically and are direct offsets to the Company's
three producing wells in the Field and are intended to develop Almond sands
natural gas potential.
Kodiak is permitting four wells on its acreage block in the
Masterson/Shiprock area in Sweetwater County, Wyoming. These wells will
evaluate the natural gas potential of the Frontier and Muddy Formations at an
approximate depth of 8,000 feet. Drilling activity in the prospect area is
anticipated to commence in mid summer.
2005 Reserves
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Kodiak also announced today its 2005 year-end net proved reserves of six
billion cubic feet equivalent, which marks the first year of proved reserves
for the Company. Kodiak's estimated present value of the net proved reserves,
discounted at 10% per annum and before the impact of income taxes, or PV-10,
at year-end was $18.2 million. Approximately 79% of proved reserves
categorized as proved developed producing and 21% are proved undeveloped. The
2005 PV-10 calculation used year-end commodity prices of $58.80 per barrel of
crude oil and $8.06 per Mcf of natural gas. The proved reserves are comprised
of 48% natural gas and 52% crude oil. Reserve estimates for 2005 were prepared
by the Company's independent reserve engineering consultants, Sproule
Associates Inc. and conform to the definition as set forth in SEC Regulation
S-X Part 210.4-10 (a) as clarified by subsequent Commission Staff Accounting
bulletins. The proved reserves are also in accordance with Financial
Accounting Standards Board Statement No. 69 requirements. The Canadian
N1 51-101 report is being prepared and further disclosure will follow.
Management Comment
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Lynn Peterson, President and CEO of Kodiak Oil & Gas commented: "We are
putting capital to work immediately through our most active drilling program
in Company history. Our 2006 drilling program should provide our engineers and
geologists with critical data which will allow us to assess and refine our
geological model and help us identify growth opportunities within our
leasehold. Initial reserves provide Kodiak with a foundation and a benchmark
going forward. Growing Kodiak into a leading Rockies exploration company has
always been our goal and we feel our mix of oil and gas projects is
particularly fortuitous in this time of the commodity price cycle."
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, including the Company's
expectations regarding the amount of capital resources available to the
Company to fund its planned capital expenditures and the application of such
capital resources; estimates of future production and reserves; and the
Company's expectations regarding the nature, timing and success of its
exploration and drilling programs. 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;
risks inherent in the oil & gas industry, such as operational risks in
exploring for, developing and producing oil and natural gas; uncertainties
inherent in estimating quantities of oil and gas reserves and projecting
future rates of production and the timing and cost of exploration and
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.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
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