Thursday, June 30, 2011
Kodiak Oil and Gas Corp.
Kodiak Oil & Gas Corp. today announces the June 30, 2011 closing of the previously announced acquisition of Williston Basin oil and gas producing properties and undeveloped leasehold.
Included in the transaction are approximately 25,000 net mineral acres and production of approximately 200 net barrels of oil equivalent per day (BOE/d). The total purchase price for the leasehold interests and associated assets is $85.5 million and is comprised of $71.5 million in cash and the issuance to the Seller of 2.5 million shares of Kodiak common stock. Kodiak funded the transaction through cash balances and borrowings under credit facilities including its reserve-based revolving line of credit.
As part of the transaction, Kodiak entered into a contract for a new build drilling rig that was previously contracted to the Seller. The new build drilling rig is scheduled for completion in September 2011.
Including today's acquisition, Kodiak's acreage position in the Williston Basin now approximates 100,000 net acres.
The shares of common stock of Kodiak issuable under the acquisition agreement with the Seller 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.
Operations Update
Kodiak has begun completion operations on its two-well pad in the Koala project area in McKenzie County, N.D. The Company anticipates completing both wells during early July 2011 and plans to simultaneously flow back the wells and turn them to production facilities and gas pipeline infrastructure which services the area. Kodiak operates the two-well pad with a 52.5% working interest and a 42.5% net revenue interest.
Following this two well pad, completions operations will move to Dunn County, N.D. where a four-well pad is being prepared for fracture stimulation operations in late July and early August. Oil, gas and water disposal pipelines have been constructed to these wells. In addition, four gross (2 net) wells have been drilled on Kodiak's non-operated lands in Dunn County and completion operations are underway of the first of those wells. Operated and non-operated completion procedures are expected to be continuous through the third quarter.
Kodiak is currently drilling ahead on four wells with two rigs running in McKenzie County, N.D. and two rigs running in Dunn County, N.D. Each of these rigs is drilling on multi-well pads.
"We are pleased to have closed on another high-quality Williston Basin acquisition," said Kodiak's Chairman and CEO Lynn A. Peterson. "The new assets provide Kodiak and its shareholders a meaningful inventory of largely de-risked additional drillable locations for future growth. By expanding our presence in the Basin, we can further improve our field-level efficiencies as we continue to work to improve per-well economics and reduced lease operating expense.
"Vastly improved weather and much better surface conditions are returning to the Williston Basin. Our fracture stimulation operations are underway at Koala without weather or road condition impediments. Our 2011 program is largely on schedule and we expect to see significant changes in our production volumes as we complete several wells in the coming weeks. "
About Kodiak Oil & Gas Corp.
Denver-based Kodiak Oil & Gas Corp. is an independent energy exploration and development company focused on exploring for, developing and producing oil and natural gas in the Williston and Green River Basins in the U.S. Rocky Mountains. For further information, please visit www.kodiakog.com. The Company's common shares are listed for trading on the NYSE Amex exchange under the symbol: "KOG."
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