Nov. 5, 2009 (PR Newswire) --

DENVER, Nov. 5 /PRNewswire-FirstCall/ -- 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 reported financial and operating results for the third quarter 2009.

Third Quarter Financial Results

The Company reported breakeven results for the quarter-ended September 30, 2009, or $0.00 per basic and diluted share, compared with a net loss of $18.0 million, or $0.20 per basic and diluted share, for the same period in 2008. The 2008 period's net loss includes $15.5 million in non-cash charges related to an impairment of the carrying value of oil and gas properties.

Oil and gas sales for the third quarter 2009 were a Company record $3.7 million, as compared to $1.7 million in the prior year period, representing an increase of 114%. The quarter-over-quarter growth in oil and gas sales is attributed to a 217% growth in equivalent production volumes offset in part by a 45% decrease in prices received for oil sales and a 24% decrease in prices received for sales of the Company's natural gas. Crude oil revenue accounted for approximately 97% of third quarter 2009 oil and gas sales, as compared to 91% in the same period in 2008. Further discussion is included in the Oil and Gas Sales section below.

For the third quarter 2009, Adjusted EBITDA was approximately $1.8 million, as compared to approximately negative $462,000 for the same period in 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 income (loss) are included in this news release and in the Company's Form 10-Q for the quarter ended September 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 September 30, 2009.

General and administrative (G&A) expense was $2.0 million for the third quarter 2009, as compared to $2.2 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 $772,000 for options issued to officers, directors and employees, as compared to $775,000 for the same period in 2008.

Nine-month Period

For the nine months ended September 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 $22.5 million, or $0.25 per basic and diluted share, for the same period in 2008. The 2008 period's net loss includes $15.5 million in non-cash charges related to an impairment of the carrying value of oil and gas properties.

Oil and gas sales for the nine-month period of 2009 were $6.5 million, versus $5.6 million for the same period in 2008. Crude oil revenue accounted for approximately 92% of 2009 oil and gas sales, as compared to 80% in the same nine-month period in 2008.

For the nine-month period of 2009, Adjusted EBITDA was approximately $1.9 million, as compared to approximately negative $1.1 million for the same period in 2008.

Net cash provided by operating activities was $5.1 million during the first nine months of 2009, as compared to net cash used in operating activities of $3.1 million in the prior-year period.

Total assets were $50.2 million at September 30, 2009, as compared to $39.0 million at December 31, 2008. Stockholders' equity was $40.3 million at September 30, 2009, as compared to $33.0 million at year-end 2008.

The Company's cash and cash equivalents position at September 30, 2009 was $1.8 million, and it currently has no long-term debt. In addition, prepaid expenses, including tubular goods and surface equipment, were $7.4 million and accounts receivable and accrued revenue was $5.8 million, both at September 30, 2009. Kodiak's total current assets at September 30, 2009 were $15.0 million, and its total current liabilities were $8.9 million, providing working capital of $6.1 million. Please see the subsequent events section for a discussion of the Company's current cash and equivalents positions, and its recently announced public offering of common stock.

G&A expense decreased 14% to $5.6 million for the first nine months of 2009, from $6.5 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 $2.1 million for options issued to officers, directors and employees, as compared to $2.7 million for the same period in 2008. The 14% in total G&A reduction for the period is primarily due to an ongoing effort to reduce G&A costs Company-wide.

Oil and Gas Sales

Kodiak's third quarter 2009 oil and gas sales volumes were a Company-record 69,000 barrels of oil equivalent (BOE) as compared to 22,000 BOE in the same period in 2008, a 217% increase, and a 53% increase over second quarter 2009 volumes of 45,000 BOE. Oil sales volumes were 61,000 barrels for the third quarter 2009, as compared to 15,000 barrels in the same period in 2008, a 312% increase, and a 73% increase over second quarter 2009 volumes of 35,000 barrels. The growth in oil production is attributed to new Bakken oil wells being brought on-line during the third quarter of 2009. By commodity in the third quarter of 2009, crude oil constituted 88% of the production base, as compared to 68% in the third quarter of 2008. Gas volumes were 48.0 million cubic feet (MMcf) in the third quarter 2009, as compared to 42.0 MMcf in the prior-year period, and as compared to 58.9 MMcf in the second quarter of 2009.

On a quarter-over-quarter basis, the average price received for crude oil fell by 45%. The Company sold its oil for $58.94 per barrel during the third quarter 2009, as compared to the $107.47 per barrel received during the prior-year period. For the third quarter 2009, the average gas price received decreased 24 % to $2.70 per thousand cubic feet of natural gas (Mcf), as compared to the $3.57 per Mcf received in 2008. Kodiak currently does not hedge any of its oil and gas production volumes.

During the first nine months of 2009, Kodiak invested $18.8 million primarily for the drilling and completion of wells in its Bakken drilling program, of which $7.3 million was invested during the third quarter 2009. During the first nine months of 2009, Kodiak drilled nine gross wells (4.8 net) and completed six gross wells (3.1 net) as producers. Company-wide, Kodiak now has working interests in 33 gross (18.3 net) wells, of which 23 gross (14.2 net) are Kodiak-operated wells.

For the first nine months of 2009, oil and gas sales volumes improved by 117% to 147,000 BOE, as compared to 68,000 BOE in the same period in 2008. Oil sales volumes grew 159% to 113,000 barrels for the nine-month period, as compared to 44,000 barrels in the same period in 2008. By commodity in the first nine months of 2009, crude oil constituted 77% of the production base, as compared to 64% in the prior-year period. Gas volumes were 206.5 MMcf for the 2009 nine-month period, as compared to 144.7 MMcf in the prior-year period, representing a 43% period-over-period increase.

The average price received for crude oil in the first nine months of 2009 was sharply lower, netting 49% less than in the same period in 2008. The Company sold its crude oil for an average price of $52.77 per barrel during the first nine months of 2009, as compared to the $103.18 per barrel received during the prior-year period. For the first nine months of 2009, the average gas price received decreased 65% to $2.62 per Mcf, as compared to the $7.45 per Mcf received in 2008. Kodiak currently does not hedge any of its oil and gas production volumes.

For the first nine months of 2009, Kodiak's crude oil price differentials for its FBIR oil sales averaged $9.25 per barrel and include trucking and marketing costs.

Kodiak Oil & Gas Corp. Production Comparison

Three-months              Nine-months
Ended                    Ended
-----                    -----
Product             Sept.     Sept.            Sept.   Sept.
Sales               30,       30,      %       30,     30,     %
Volumes             2009      2008    Change   2009    2008  Change
--------------------      ------     -----   ------  ------- ------- -----
Natural Gas (Mcf)         47,982     42,000      14% 206,554 144,709  43%
----------------          ------     ------      --  ------- -------  --
Oil  (Bbls)               61,121     14,832     312% 112,921  43,691 159%
----------                ------     ------     ---  -------  ------ ---
Barrels of Oil
Equivalent (BOE)         69,118     21,832     217% 147,347  67,809 117%
-----------------         ======     ======     ---  =======  ====== ---

Product Price Received
----------------------
Natural Gas ($/Mcf)        $2.70      $3.57     (24%)  $2.62   $7.45 (65%)
-----------------------    -----      -----    ----    -----   ----- ----
Crude Oil ($/Bbl)         $58.94    $107.47     (45%) $52.77 $103.18 (49%)
-----------------------   ------    -------    ----   ------ ------- ----
Sequential Quarter      Three-months
Comparison
------------------          Ended
-----
Product             Sept.      June
Sales               30,        30,      %
Volumes             2009       2009    Change
--------------------    ---------    -----   -------
Natural Gas (Mcf)         47,982     58,878     (19%)
-----------------         ------     ------    ----
Oil  (Bbls)               61,121     35,314      73%
----------                ------     ------      --
Barrels of Oil
Equivalent (BOE)         69,118     45,127      53%
-----------------         ======     ======      --

Williston Basin Drilling and Completion Operations -- North Dakota and Montana

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 intends to test the productive potential of the Three Forks Formation during the first half of 2010.

Please reference Kodiak's comprehensive operations update news release dated October 22, 2009 and its related filing on Form 8-K dated October 22, 2009 for a detailed discussion of recent drilling and completion activities on the Fort Berthold Indian Reservation (FBIR) in Dunn County, N.D., a summary of which is included in the table below.

A significant portion of the Company's Bakken shale leasehold position is located on the FBIR in Dunn County, N.D. where all Company drilling and completion activity has occurred in 2009. At September 30, 2009, Kodiak had approximately 55,000 gross and 35,000 net acres under lease on the FBIR. Kodiak operates all of its leasehold on the Reservation, with the exception of approximately 9,000 net acres that are in a participating area previously established with another operator. During 2009, Kodiak drilled and completed eight wells on the FBIR, all targeting the Middle Bakken Formation. A ninth well has been drilled and is waiting on completion, which the Company expects to occur during the fourth quarter 2009.