Second Quarter Financial Results

The Company reported a net loss for the quarter ended June 30, 2009, of $538,000, or $0.01 per basic and diluted share, compared with a net loss of $1.9 million, or $0.02 per basic and diluted share, for the same period in 2008. Oil and gas sales were also flat quarter-over-quarter at $2.0 million. Crude oil revenue accounted for approximately 94% of second quarter 2009 oil and gas sales, as compared to 77% in the same period in 2008. The Company grew quarterly production by 137%, but posted flat revenue for the comparable quarterly periods which is attributed to a 54% decrease in prices received for oil sales and an 83% lower price received for sales of the Company's natural gas. Further discussion is included in the Oil and Gas Sales section below.

For the second quarter 2009, Adjusted EBITDA was $583,000, as compared to negative $665,000 for the same period in 2008. The improvement in Adjusted EBITDA during the second quarter 2009 is attributed primarily to a decrease in workover expense compared to 2008. Kodiak defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, depletion, amortization and accretion, non-cash stockbased compensation expense, impairment expense and gains or losses on foreign currency exchange.

Reconciliations of Adjusted EBITDA, a non-GAAP measure, to net loss are included in this news release and in the Company's Form 10-Q for the quarter ended June 30, 2009. Additional disclosure regarding the Company's use of Adjusted EBITDA is included in the Company's Form 10-Q for the quarter ended June 30, 2009.

General and administrative (G&A) expense decreased to $1.7 million for the second quarter 2009, from $1.8 million for the same period in 2008. Included in the G&A expense for the 2009 period is a stockbased compensation charge of $583,000 for options issued to officers, directors and employees, as compared to $449,000 for the same period in 2008.

First Half 2009

For the six months ended June 30, 2009, Kodiak reported a net loss of $2.2 million, or $0.02 per basic and diluted share, compared with a net loss of $4.5 million, or $0.05 per basic and diluted share, for the same period in 2008.

Total revenues for the first half of 2009 were $2.8 million, versus $4.0 million for the same period in 2008. Oil and gas sales were $2.8 million for the first half of 2009, as compared to $3.8 million in 2008. Crude oil revenue accounted for approximately 85% of first-half 2009 oil and gas sales, as compared to 76% in the same period in 2008.

For the first six months of 2009, Adjusted EBITDA was $91,000, as compared to negative $662,000 for the prior first-half period. Net cash used in operating was $694,000 in the first half of 2009, as compared to net cash used in operating activities of $5.2 million in the prior-year period.

Total assets were $45.9 million at June 30, 2009, as compared to $39.0 million at December 31, 2008. Stockholders' equity was $39.3 million at June 30, 2009, as compared to $33.0 million at year-end 2008. The Company's cash and cash equivalents position at June 30, 2009, was $3.8 million and it currently has no long-term debt. In addition, prepaid expenses, including tubular goods and surface equipment, were $7.7 million and accounts receivable was $4.4 million, both at June 30, 2009. Kodiak's total current assets at June 30, 2009 were $15.9 million and its total current liabilities were $5.6 million, providing working capital of $10.3 million.

G&A expense decreased to $3.6 million for the first half of 2009, from $4.3 million for the same period in 2008. Included in the G&A expense for the 2009 period is a non-cash stock-based compensation charge of $1.4 million for options issued to officers, directors and employees, as compared to $2.0 million for the same period in 2008, a 30% decrease. The 17% G&A reduction for the period is primarily due to an ongoing effort to reduce G&A costs Company-wide. Due to Kodiak's ongoing cost-containment efforts, the Company's G&A costs related to employee costs, travel, legal and consulting expenses declined by approximately $138,000, or 6%, during the first half of 2009, as compared to the same period in 2008.

Oil and Gas Sales

Kodiak's second quarter 2009 oil and gas sales volumes increased by 137% to 45,000 barrels of oil equivalent (BOE), as compared to 19,000 BOE in the same period in 2008. Oil sales volumes improved by 171% to 35,000 barrels for the second quarter 2009, as compared to 13,000 barrels in the same period in 2008. The growth in oil production is attributed to new Bakken oil wells being brought on line during the second quarter of 2009. By commodity in the second quarter of 2009, crude oil constituted 78% of the production base.

For the second quarter 2009, the average gas price received decreased 83% to $2.20 per thousand cubic feet of natural gas (Mcf), as compared to the $12.80 per Mcf received in 2008. On a quarter-over-quarter basis, the average price received for crude oil fell by 54%. The Company sold its oil for $52.69 per barrel during the second quarter 2009, as compared to the $115.42 per barrel received during the prior-year period. Kodiak currently does not hedge any of its oil and gas production volumes.

During the first half of 2009, Kodiak invested $11.5 million in oil and gas activities, of which $7.1 million was invested during the second quarter 2009, primarily for the drilling and completion of wells in its Bakken drilling program. During the first half of 2009, Kodiak drilled five wells and completed four wells as producers. The Company now has working interests in 28 gross (15.74 net) wells, of which 18 gross (11.48. net) are Kodiak operated wells.

For the first half of 2009, oil and gas sales volumes improved by 70% to 78,000 BOE, as compared to 46,000 BOE in the same period in 2008. Oil sales volumes grew 79% to 52,000 barrels for the first half of 2009, as compared to 29,000 barrels in the same period in 2008. By commodity in the first six months of 2009, crude oil constituted 66% of the production base, as compared to 63% in the prior-year period.

For the first half of 2009, the average gas price received decreased 71% to $2.60 per Mcf, as compared to the $9.04 per Mcf received in 2008. The average price received for crude oil in the first half of 2009 was also sharply lower netting 55% less that in the same period in 2008. The Company sold its crude oil for $45.48 per barrel during the first half of 2009, as compared to the $100.97 per barrel received during the prior-year period.

Williston Basin -- Dunn County, North Dakota

Kodiak's exploration efforts target oil and gas production from the middle member between the upper and lower Bakken shales, which are the source for existing hydrocarbons. The Three Forks / Sanish Formation, a productive interval lying directly below the lower Bakken shale, is also expected to be a future exploration target. Commercial production from the Three Forks / Sanish Formation is being reported by operators in the immediate area.

The Company's Bakken shale leasehold position is located on the Fort Berthold Indian Reservation (FBIR) in Dunn County, N.D. where all Company drilling and completion activity has occurred in 2009. At June 30, 2009, Kodiak had approximately 54,000 gross and 37,000 net acres under lease. Kodiak operates all of its leasehold on the reservation excepting an approximate 7,000 net acres that are in a participating area previously established with another operator.

Year-to-date, Kodiak Oil & Gas Corp. has drilled and completed its first four wells targeting the middle member of the Bakken Formation. In addition, the Company has one well currently being completed, one awaiting completion and its seventh Middle Bakken well, the Charging Eagle #1-22-10H, is drilling in the horizontal lateral in the Charging Eagle area in the southeastern portion of its FBIR leasehold.

Estimated average daily net production for all of Kodiak's producing properties for the month of July 2009 was 765 barrels of oil equivalent per day (BOE/d), as compared to the average daily net production for the second quarter of 2009 of 521 BOE/d. Comparatively, average gross production for the FBIR producing properties for July 2009 was 1,220 barrels of oil per day (BO/d) operated and 470 BO/d net to Kodiak. There have been no gas sales as the wells are not connected to a gas pipeline.

   The table below summarizes Kodiak's 2009 activity on the FBIR.    Kodiak Oil & Gas Corp.  FBIR Drilling and Completion Activities                      WI / NRI      Days           Lateral      Completion   Well                 (%)        to TD*          Length          Date   ====              ========      ======         =======      ==========   MC #16-34-2H        60 /49        41            4,169'      4/23/2009   MC #16-34H         60  /49        36            4,150'       5/4/2009   TSB #16-8-7H   37.5 / 30.5        28            8,995'       6/7/2009   TSB #16-8-16H       50 /41        31            4,465'      6/18/2009   TSB #14-33-28H      50 /41        31            8,313'       8/3/2009   TSB #14-33-6H       50 /41        26            4,163'      8/24/2009   CE #1-22-10H        55 /45        --   Approx.  9,000'             --   CE #1-22-23H        60 /50        --   Approx.  5,000'             --   TB #16-15-10H       60 /50        --   Approx.  9,000'             --                     Number of   IP 24-    First 30                    Frac     Hour Test   Day Oil   Well            Stages     (BOE/D)   Production              Note   ====           =========  =========  ==========              ====   MC #16-34-2H      8         711       8,397               Flowing Well   MC #16-34H        5       1,394      13,406               Flowing Well   TSB #16-8-7H     15       1,856      21,542               Flowing Well   TSB #16-8-16H     5         811      12,288               Flowing Well   TSB #14-33-28H   15          --          --                 Completing   TSB #14-33-6H     6          --          --                 Completing   CE #1-22-10H                 --          --            Drilling  Ahead   CE #1-22-23H                 --          --     Spud after CE#1-22-10H   TB #16-15-10H                --          --     Spud after CE#1-22-23H    *Includes running liner in the hole    Second Half 2009 Outlook  

For the second half of 2009, Kodiak intends to drill five additional gross wells on the FBIR and complete five additional gross wells, including the two that are currently being completed. The Company's working interest (WI) ranges from 50% to 60% on the five wells. After all drilling and completion operations are finished on each two-well pad , the Company intends to provide periodic operations updates to apprise investors as to the 2009 drilling program's progress. A further discussion of Kodiak's liquidity and its capital expenditures is included below.

   Events Subsequent to the End of the Second Quarter 2009    Vermillion Basin  

Effective August 1, 2009, the Company amended an earlier agreement with Devon Energy Production Company, L.P. ("Devon"), a wholly owned subsidiary of Devon Energy Corp., whereby Kodiak has assigned approximately 50% of its current interest in its Vermillion Basin prospect area in southwest Wyoming to Devon. In return, the Company will be carried for its remaining 25% WI in two horizontal completions on wells that were drilled earlier, one located in the Coyote Flats Unit and the other located in the Horseshoe Basin Unit.