Kodiak Completes Vermillion Basin Well

Vermillion Basin
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Kodiak Oil & Gas Corp., which has assets in the Green River and Williston basins, on Wednesday provided an update on its 2007 drilling program in the Vermillion Basin in Wyoming and in the Williston Basin in North Dakota.

Vermillion Basin Wyoming

Completion operations continue on Kodiak's North Trail-State #4-36 well (100% working interest [WI] -- Kodiak-operated). The well has been drilled to 14,338 feet to evaluate the natural gas potential of the over-pressured Baxter Shale and Frontier and Dakota sands. The well has been fracture stimulated in nine separate stages with temporary plugs set between each stage. The top two plugs were drilled out, opening up the three stages with perforations from a depth of 11,366 feet to 12,056 feet in the Baxter Shale. During completion operations and flowback, the first three stages flowed at rates in excess of 3 million cubic feet (MMCF) gas per day with casing pressure of 800 psi on a 30/64ths-inch choke. While we are encouraged by these flowback rates, we would expect actual production rates to be lower.

Completion of the remaining six stages has been delayed due to extreme weather conditions, but Kodiak expects to drill out the remaining plugs and test all of the zones in the next few weeks, as weather conditions improve. The well is currently producing gas into the sales line at curtailed rates as completion work continues.

The Company has completed drilling operations on the NT #1-33 well (100% WI -- Kodiak-operated), located three miles west of the North Trail State #4-36. The well was drilled to 14,500 feet, and production casing has been set to total depth. The drilling costs through logs and production casing were approximately $3.5 million, bringing it slightly under our AFE projections. The Company anticipates that completion work will be completed in February 2007. Gas gathering facilities are currently being installed after which completion will begin.

Kodiak is in the process of obtaining bids from several drilling contractors with the intention of entering into a contract for a continuous drilling program though the end of 2007. The Company has 17 permits that are in various stages of approval with the expectation that drilling could commence April 1, 2007. The Company is fully funded for this drilling program.

Williston Basin -- North Dakota and Montana

Grizzly Bakken Prospect -- McKenzie County, North Dakota

Kodiak has completed drilling operations on the Grizzly Federal #1-27H well (62.5% WI -- Kodiak operated). The well has a single lateral well bore with a total of 7,293 feet open in the Bakken Formation. The well commenced production in late December flowing naturally at a rate of 308 barrels of oil per day (BOPD) and has produced 4,859 gross BO during the first 31 days of production without stimulation work or a pumping unit. This was the last of three Bakken wells that the Company drilled during 2006. The Grizzly Federal #4-11H well was put on production flowing naturally on December 6, 2006 and has produced 17,055 gross BO to date. The Grizzly #13-6 well was fracture stimulated and is currently being flowed back. The Company is evaluating three additional development locations for drilling in 2007.

Mission Canyon/Red River Projects -- Sheridan County, Montana

The Company has completed drilling operations on the Larsh #2-13 well (50% WI -- Kodiak-operated), located in Sheridan County, Montana, which evaluated the Red River Formation to a depth of 11,200 feet. Based upon oil and gas recovery from a drill stem test, production casing has been run to 11,100 feet and completion operations have commenced. Utilizing production data from this well, Kodiak will evaluate additional locations for possible development during 2007.

The Company is currently drilling the CT #14-9 well (50% WI -- Kodiak operated), approximately three miles east of the Larsh #2-13 well. The CT #14-9 is a development well in the Lowell Field where Kodiak has four existing wells that have produced 134,475 gross BO since September 2005 through December 2006. The well is drilling below 6,300 feet with an expected total depth of approximately 7,800 feet.

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 Green River Basins in the U.S. Rocky Mountains.


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