DENVER, Sept. 29 /PRNewswire-FirstCall/ - Kodiak Oil & Gas Corp. (TSX
Venture: KOG; U.S. symbol KOGGF) today provided an operations update on its
Green River Basin (Sweetwater County, WY) and Williston Basin (Sheridan
County, MT and Divide County, ND) oil and gas properties. The Company
currently has two non-operated rigs drilling in Sweetwater County, WY and has
secured drilling contracts for two additional rigs that will be operating in
the Williston Basin on properties operated by Kodiak. The Company expects to
participate in the drilling of 10 gross wells (3.70 net wells) during the
remainder of 2005 and into the first part of 2006 with estimated capital
expenditures of $5.9MM.
Kodiak President and CEO, Lynn Peterson, noted that, "This will be an
exciting period in Kodiak's initial growth phase. Our increased activity is an
indicator of our commitment to proving up our various Rocky Mountain
leaseholdings. We are fortunate to obtain drilling contracts in the tight
Rockies drilling and service market and intend to accelerate activity to take
advantage of the rigs. This will complete our exploration program as set forth
in early 2005 which we expanded due to our drilling success. As a result of
the exercise of the warrants in August, the Company is completely funded for
its drilling program."
Green River Basin, Sweetwater County, Wyoming
Development drilling operations have commenced on this prospect (50%
Working Interest; non-operator) to develop the potential of the Almond sands
and coals. The PRFED 14100 4-29 well is currently drilling to an expected
total depth of 6,200 feet. Upon completion of drilling operations, estimated
at ten days, the rig will be moved to the PRFED 14100 4-32 well location.
Kodiak will frac and complete the wells and evaluate both the sands and the
coals in the well bore. Production will be tied into the existing production
facilities. Installation of compression facilities is in progress and should
be completed in mid-November. Current production from the Unit is 100-200 Mcf
of gas per day, surface constrained. With the addition of compression,
production should increase significantly.
A third well, the PRFed 14100 2-31, will be drilled within the Chicken
Springs Unit to evaluate the potential of the Almond coals by horizontally
drilling one of the existing coal seams. Based upon a thick coal seam that is
present in several surrounding wells and from seismic evaluation, the prospect
lends itself to the horizontal technology. The drilling program projects two
laterals out of one well bore extending 1,000-4,000 feet each.
The 8-9 Chicken Ranch Unit well (33.33% WI; non-operator) will commence
drilling today to an estimated total depth of 8,600 feet to test the natural
gas potential in the Almond and Ericson Formations. The well is a one mile
offset to the Kinney Rim 3-5 well drilled by Anschutz Corp in 1982. The well
was completed in the Ericson sands flowing 740 Mcf gas per day. Due to the
lack of pipelines and the price of gas, the well was plugged and abandoned by
Anschutz. Kodiak's working interest ranges from 16.67% to 88% under 7,858
gross acres in the Chicken Ranch Federal Unit.
Production from the 15 wells was tied into the sales line and gas sales
commenced in early September, 2005. Production rates, while minimal, will
defray operating expenses during the continuing dewatering process. Desorption
is proceeding as expected and Kodiak awaits results to evaluate the ultimate
productive potential of the project.
The Masterson Federal No. 24-11 well (40% WI; non-operator) was completed
in the Second Frontier Formation at a depth of 6,234 to 6,288 feet. The well
was connected to a pipeline and placed on production in August 2005 with
current production of approximately 315 Mcf gas per day. One development
location is being permitted and will be drilled once approved and a drilling
rig becomes available.
Lowell/North Wrangler Prospects (Sheridan County, Montana)
The Company commenced production from the State 8-16 well, located in
Sheridan County, MT, on September 6, 2005 (25% WI; operated by Kodiak). The
well was drilled to a depth of 7,615 feet and has produced 1,373 barrels of
oil from the Mission Canyon Formation in 17 days. Over this time period the
well has been flowing naturally without any artificial lift or stimulation.
The Company will continue to evaluate production from the well before
installing a pump to increase production rates.
The Company has contracted a drilling rig that is moving on location and
will commence operations the first week of October. The Company plans to
commence a drilling program consisting of two development wells and one
exploratory test to evaluate the Mission Canyon Formation. Depending upon the
drilling results, the Company could continue the drilling program as it is
permitting six additional locations on the prospect lands and can retain the
drilling rig if the program develops. Kodiak owns a 25% working interest under
8,429 acres under the Cinnamon Bear Project, consisting of the Lowell and
North Wrangler Prospects.
Great Bear Prospect (Divide County, North Dakota)
Kodiak has contracted a drilling rig, scheduled to be on location the
first half of November, to evaluate the Red River potential on its Great Bear
Prospect (37.5% WI; operated by Kodiak) in Divide County, ND. Kodiak has
pooled its acreage with other leaseholders in the 3-D seismic area and has a
37.5% working interest in 11,616 gross acres. The Company is permitting two
locations on the prospect lands. The first test will be drilled into the Red
River Formation at 10,550 feet and then an approximate 4,000 foot lateral will
be drilled. The well is an offset of a well drilled in 1984 that has produced
175,000 barrels of oil to date and is currently producing 15 barrels of oil
per day. The second well will be vertically drilled to an approximate depth of
10,750 feet. This drilling program will be completed during the first quarter
Grizzly Prospect (McKenzie County, North Dakota)
The Company recently acquired an additional 800 acres within the fairway
of the horizontal Bakken play in Richland County, MT down into McKenzie
County, North Dakota. The acreage is contiguous to the Company's existing
acreage holdings increasing its total acreage to 3,307 gross acres
(37.5% WI; operated by Kodiak). A private company is currently drilling two
horizontal wells directly offsetting the acreage to the north. The Company is
completing the permitting process for a location on its Grizzly prospect. The
Company intends to use the same rig it has under contract for the Great Bear
Prospect and the drilling will commence the first quarter 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" and the U.S. symbol
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.
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SOURCE Kodiak Oil & Gas Corp.