Monday, August 9, 2010

Kodiak Oil and Gas: Bakken Shale

Kodiak Oil and Gas Corp. (KOG) released an update on the Bakken Shale early this morning. A new well has been completed and it is producing around 1,870 Barrels of oil a day:

August 9, 2010- Kodiak Oil & Gas Corp. (NYSE Amex: KOG), an oil and gas exploration and production company with assets in the Williston Basin of North Dakota and Montana and in the Green River Basin of southwest Wyoming and Colorado, today provided initial production rates on its recently completed Moccasin Creek (MC) #13-34-28-2H well. This release is provided to update the information concerning this well first reported in the Company's earnings release on August 5, 2010 and in its filing on Form 10-Q for the quarter ended June 30, 2010.

As previously announced, Kodiak successfully completed and flow-tested the MC #13-34-28-2H (Kodiak-operated 59% working interest / 48% net revenue interest) well. The well was completed in 15 stages through a 6,200-foot horizontal wellbore. After flow testing for the past six days, the well has now stabilized sufficiently to report a 24-hour initial production rate.

The MC #13-34-28-2H well recorded 24-hour initial production rates of 1,870 barrels of oil per day (BOPD) and 1.1 million cubic feet of natural gas (MMcf) per day, or 2,055 barrels of oil equivalent (BOE) per day. Kodiak completed the 24-hour production test utilizing a 22/64" choke with flowing casing pressure of 2,525 psi. Since the flow test began on August 2, 2010, the well has cumulative production of 6,546 barrels of oil and 4.5 MMcf of natural gas, or 7,298 BOE. During the last four days of full production, the well has produced 5,495 barrels of oil and 3.9 MMcf of natural gas, or 6,140 BOE for an average of 1,535 BOE per day.

Kodiak will next complete the MC # 13-34-28-1H offset well drilled from the same pad. This well is a 9,800-foot horizontal lateral and is scheduled for completion in the third quarter of 2010 with 22 stages in its design.

"To provide comparison to our past wells, our SEC filing date requirement for our second quarter 2010 necessitated reporting on August 5, 2010 of the preliminary flow test rates for our MC #13-34-28-2H," said Lynn A. Peterson, Kodiak's President and CEO. "These preliminary results indicated a very strong well. We are pleased to report that this well is our best well we have completed in the Bakken to-date, when considering that the well is producing on a 22/64th inch choke and that we are observing continued strong pressure. This well again demonstrates Kodiak's improved completion designs. The well further confirms the resource potential of our acreage position in North Dakota, which we estimate has 177 total locations, including de-risked Bakken and developing Three Forks potential. Our Williston Basin position also includes an extension area in Montana, which we estimate having 36 locations. We believe these locations are based on conservative spacing estimates."

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