Kodiak Oil & Gas Corp. (NYSE: KOG) 22,000 barrels of oil equivalent per day

Interim Completion Operations Update

Kodiak completion operations in the Williston Basin continue with two full-time, 24-hour-per-day crews.  During the fourth quarter through November 30, 2012, the Company completed 17 gross (16 net) operated wells and anticipates completing an additional nine gross (8 net) operated wells during December, bringing the fourth quarter 2012 completions to 26 gross (24 net) operated wells.

Over the last two weeks of November 2012, the Company’s net oil and gas sales averaged approximately 22,000 barrels of oil equivalent per day (BOE/d); assuming non-operated production during that period was unchanged from third quarter results.  Several of the recent well completions occurred in late November and early December and therefore did not materially contribute to the November oil and gas sales averages.

The following table sets forth information relating to the Company’s recent operated Williston Basin completion activity:

Recent Operated Well Completions 

 

 

WI/

 

IP 24-hour Test (BOE/d)

Choke

 

Well Name

County

NRI (%)

Formation

 BOPD 

MMcf/d

BOE/d

Size “

PSI

Smokey Cupcake 14-21-16-3H3

McKenzie

95 / 76

Three Forks

2,134

5.85

3,109

38/64

2,000

Smokey 14-21-33-14H

McKenzie

90 / 72

Bakken

2,117

5.74

3,074

38/64

2,050

Smokey 14-21-33-14H3

McKenzie

93 / 74

Three Forks

1,404

4.69

2,186

42/64

1,500

Smokey Kinden 14-21-16-3H

McKenzie

100 / 80

Bakken

2,125

2.36

2,518

42/64

2,600

Koala 15-33-28-3H

McKenzie

88 / 71

Bakken

2,257

3.37

2,819

26/64

2,600

Koala 15-33-28-2H3

McKenzie

95 / 76

Three Forks

2,120

3.14

2,643

34/64

2,200

Koala 15-33-28-2H

McKenzie

88 / 71

Bakken

2,338

3.42

2,907

28/64

2,250

SC 12-7-8-9H3

Dunn

100 / 81

Three Forks

1,370

0.74

1,494

32/64

1,300

SC 16-2-3-13H

Dunn

99 / 81

Bakken

1,749

1.14

1,938

28/64

1,500

SC 16-2-3-13H3

Dunn

99 / 81

Three Forks

1,516

1.12

1,703

36/64

1,100

Smokey 15-7-19-15H

McKenzie

98 / 77

Bakken

1,950

4.87

2,761

38/64

2,000

Smokey 15-7-19-15H3

McKenzie

98 / 77

Three Forks

1,466

3.23

2,004

36/64

1,450

Ongoing Operated Well Completions 

Smokey 15-7-6-2H3

McKenzie

88 / 68

Three Forks

Flowing Back

Smokey 15-7-6-2H

McKenzie

86 / 67

Bakken

Flowing Back

MC 16-26-27-12H

Dunn

69 / 55

Bakken

Completing

MC 16-26-27-13H3

Dunn

69 / 55

Three Forks

Completing

Koala 2-25-36-14H3

McKenzie

94 / 75

Three Forks

Completing

Interim Drilling Operations Update

Kodiak’s drilling operations continue with seven operated rigs.  Currently, two drilling rigs are operating in the Polar project area in southern Williams County and two rigs are operating in Dunn County, with one rig in each of the Smokey, Koala and Grizzly project areas in McKenzie County.  As a result of Kodiak’s continued efficiencies in its drilling operations and the resultant decrease in spud-to-rig-release drilling times, the Company intends to release one of the drilling rigs in January 2013 and initially plans to operate six rigs during the remainder of 2013.

As announced earlier, the Company is in the process of commencing drilling to test tighter well bore density in its Polar and Smokey operating areas.  In these two areas the Company intends to drill up to 12 wells within a drilling spacing unit (DSU) to target the Middle Bakken and the two upper intervals of the Three Forks formations.  Three four-well pads are being constructed in the Polar pilot project and three drilling rigs are expected to be mobilized on these pads in early 2013.  In Kodiak’s Smokey block, two wells within the test DSU have recently been fracture stimulated and are currently flowing back.  A rig is on location with the intention to drill three additional well bores into the same DSU.  The balance of the wells are expected to be drilled later in 2013.

Management Comment

Commenting on ongoing operations, Kodiak’s Chairman and CEO Lynn A. Peterson said:  “We are very pleased with the efficient pace of our completion operations.  Our production base continues to grow as we bring wells onto production and we remain on track to meet our previously announced guidance.  We continue to be encouraged by the consistent well results throughout our operating areas and by the similarity in our production results between wells drilled in the Middle Bakken and in the Three Forks formations.

“We are looking forward to commencing the drilling of our down-spacing projects.  It is important that we do this work in the early stages of our development program in order to gain information to help us best drain the reservoirs.  We will continue to monitor other operators’ results from tighter drilling as well as results from wells drilled in the deeper benches of the Three Forks Formation.  Both of these developments could have a significant impact on the entire Williston Basin.”

 

Shayne Heffernan Ph.D.Economist/Hedge Fund ManagerShayne Heffernan oversees the management of funds for institutions and high net worth individuals. He is also an active consultant working with Corporations around the World.He is recognized as one of the leading Economists in South East Asia, as well as the preeminent authority on ASEAN. His opinions and forecasts are widely read by decision makers in the region and Internationally.Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.