Kodiak O&G Concludes Latest Williston Basin Acquisition

Kodiak O&G announced the closing of the previously announced acquisition of Williston Basin oil and gas producing properties and undeveloped leasehold.

Included in the acquisition are approximately 50,000 net leasehold acres and net production of approximately 3,600 barrels of oil equivalent per day located primarily in McKenzie and Williams Counties, N.D. The acquisition includes a working interest in 19 gross (14.7 net) operated producing wells, 15 gross (1.9 net) non-operated wells and five gross (3.6 net) wells that have been drilled and are waiting on completion.

The purchase price for the asset package includes cash consideration of $588.4 million and $50 million in common shares of Kodiak priced at the five-day weighted average price of the shares prior to the second business day prior to closing, or $9.89 per common share. The purchase price includes $48.4 million in post-closing adjustments to reflect the acquisition's September 1, 2011 effective date. Kodiak funded the cash balance due at closing through the release from escrow of the proceeds from the Company's November 2011 high yield debt offering.

As previously disclosed, in connection with the closing of the November 2011 debt and equity offerings, Kodiak repaid all outstanding debt under its first lien credit agreement and, in conjunction with the closing of this acquisition, Kodiak repaid all of the outstanding debt under its second lien credit agreement. Kodiak's current borrowing capacity under its first lien credit agreement is $225 million.

Including this acquisition, Kodiak's acreage position in the Williston Basin now approximates 155,000 net acres.

The shares of common stock of Kodiak issued under the acquisition agreements have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration thereunder or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

2011 Proved Reserves and Production Volumes

The Company also today announced that it expects to announce its 2011 estimated proved reserves quantities, its 2011 average daily production volumes and its December 31, 2011 exit rate production volumes later in January 2012.


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