Kodiak Oil & Gas Reports First-Half 2006 Results

DENVER, Aug. 11 /PRNewswire-FirstCall/ -- Kodiak Oil & Gas Corp. (Amex: KOG; TSX Venture: KOG), an oil and gas exploration and production company with assets in the Green River and Williston Basins, today reported financial and operating results for the first half of 2006. Financial tables for the first half and second quarter 2006 are included at the end of this news release.

First-half 2006

The Company reported a net loss for the six months ended June 30, 2006 of $1,014,000 or $0.02 per share compared with a net loss of $816,000 or $0.02 per share for the same period in 2005. Included in the 2006 net loss was a charge against income of $1,121,000 for stock-based compensation for options issued to directors and employees, while there was no such expense in 2005. All per-share amounts are presented on a fully diluted basis. Net income before depreciation, depletion and amortization, gain on foreign currency exchange, and stock-based compensation charges was $619,000 for the six-month period ended June 30, 2006 as compared to loss of $630,000 the same period ending June 30, 2005. Oil and gas sales for the six-month period were $1,771,000 versus $14,000 in the same period in 2006. Total revenues were $2,138,000 versus $45,000 in the same period a year ago. The rise in total revenues is attributed to greater oil and gas production volumes and higher realized commodity prices received.

Gas production volumes were 94,139 per thousand cubic feet (Mcf) for the six-month period ended June 30, 2006, compared to 5,877 Mcf for the prior period in 2005. Oil production volumes were 23,982 barrels for the six-month period ended June 30, 2006, compared to no oil sales during the same period in 2005. For the first half of 2006 Kodiak produced 39,672 barrels of oil equivalent using a conversion rate of 6 Mcf gas to each barrel of oil.

Gas price realizations increased 21% to $6.55 per Mcf for the six-month period ended June 30, 2006 compared to $5.43 per Mcf the same period in 2005. Oil price realizations were $56.97 per barrel for the period ended June 30, 2006. Kodiak's production is currently unhedged.

As of June 30, 2006, Kodiak had working capital of $24,983,000 with no long-term debt. During the six-month period ended June 30, 2006, the Company invested $16,208,000 for exploration and development of its leasehold, including $6,900,000 for the acquisition of mineral leaseholds in the Company's Vermillion Basin projects in southwest Wyoming. Kodiak anticipates capital of expenditures of approximately $16 million over the remainder of 2006 of which $10 million will be invested in Wyoming, primarily in the Vermillion Basin, and $6 million in the Williston Basin.

During the first half of 2006, Kodiak conducted initial completion operations on three gross wells (1.6 net). At June 30, 2006, Kodiak operated eight gross wells with four additional wells awaiting completion activities.

Management Comments

Commenting on the first-half results, Lynn Peterson, Kodiak's President and CEO said: "Because we are beginning to ramp up activity and corresponding production growth, we have presented results in the six-month format. Comparisons to the year-ago period are skewed by the capital we have raised and the investment in developing our properties. We will present quarterly comparisons as they become a more meaningful way to assess our performance and expected growth. For the remainder of 2006, we expect to spud our first Baxter Shale test, the North Trail State #4-36 in the Vermillion Basin in Wyoming. We also just put our first Bakken well in North Dakota on production during the last week of July and we have set intermediate casing to 11,200 feet on our second well. Our third quarter results will reflect the oil production from this play."

About Kodiak Oil & Gas Corp.

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. For further information, please visit http://www.kodiakog.com/. The common shares of the Company are listed for trading on the American Stock Exchange and the TSX Venture Exchange under the symbol "KOG."

Forward-Looking Statements

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," 'projects," "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur. Information inferred from the interpretation of drilling results may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a well is actually developed. Forward-looking statements in this document include statements regarding the Company's exploration, drilling and development plans, the Company's expectations regarding the timing and success of such programs, and the Company's expectations regarding production from its Williston property. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the prices of oil and gas, uncertainties inherent in estimating quantities of oil and gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks, liquidity and capital requirements, the effects of governmental regulation, adverse changes in the market for the Company's oil and gas production, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

For further information, please contact: Mr. Lynn A. Peterson, President, Kodiak Oil & Gas Corp., [phone] Mr. David Charles, EnerCom, Inc. [phone] Ms. Heather Colpitts, Associate Account Manager, CHF Investor Relations, [phone] x.223 [Financial and Operational Tables Accompany this News Release]

The notes accompanying the financial statements are an integral part of the

consolidated financial statements and can be found in Kodiak's filing on Form 10-Q dated August 11, 2006. KODIAK OIL & GAS CORP. BALANCE SHEET (UNAUDITED) June 30, December 31, ASSETS 2006 2005 Current assets: Cash and cash equivalents $27,494,962 $7,285,548 Accounts receivable Trade 727,670 447,981 Accrued Sales 338,059 226,406 Prepaid expenses and other 179,276 30,631 Total Current Assets 28,739,967 7,990,566 Property and equipment (full cost method), at cost: Proved oil and gas properties 19,222,253 11,277,307 Unproved oil and gas properties 14,571,338 6,307,903 Less-accumulated depletion, depreciation and amortization (969,105) (121,941) 32,824,486 17,463,269 Other property and equipment, net of accumulated depreciation of $79,479 in 2006 and $47,525 in 2005 166,388 183,481 Restricted Investment 228,000 153,000 Total Assets $61,958,841 $25,790,316 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities $3,757,340 $4,411,572 Noncurrent liabilities: Asset retirement obligation 137,760 69,073 Total Liabilities 3,895,100 4,480,645 Commitments and Contingencies Stockholders' equity: Common stock, $0.01 par value: authorized - 100,000,000 Issued: 74,886,426 shares in 2006 and 54,547,158 in 2005 748,864 545,472 Additional paid in capital 64,158,128 26,593,826 Accumulated deficit (6,843,251) (5,829,627) Total Stockholders' Equity 58,063,741 21,309,671 Total Liabilities and Stockholders' Equity $61,958,841 $25,790,316 KODIAK OIL & GAS CORP. STATEMENT OF OPERATIONS (UNAUDITED) Three months ended June 30, Six months ended June 30, 2006 2005 2006 2005 Revenues: Gas production $172,914 $13,545 $404,480 $13,545 Oil production 689,185 -- 1,366,198 -- Interest 263,167 22,677 366,839 31,325 Total revenue 1,125,266 36,222 2,137,517 44,870 Cost and expenses: Oil and gas production 236,746 63,633 349,660 74,347 Depletion, depreciation, amortization and abandonment liability accretion 491,674 7,216 879,190 13,732 General and administrative 1,825,632 323,594 2,290,435 601,472 (Gain) /loss on currency exchange (420,676) 130,655 (368,143) 171,278 Total costs and expenses 2,133,376 525,098 3,151,141 860,829 Net loss for the period $(1,008,110) $(488,876) $(1,013,624) $(815,959) Basic & diluted weighted-average common shares outstanding 74,398,514 44,810,540 67,045,923 44,810,540 Basic & diluted net loss per common share $(0.01) $(0.01) $(0.02) $(0.02) Product Volumes and Prices Six Months Ended June 30, 2006 2005 Volume Price Volume Price Gas (Mcf) 94,139 $6.55 5,877 $5.43 Oil (Bbls) 23,982 $56.97 -- $-- Three Months Ended June 30, 2006 2005 Volume Price Volume Price Gas (Mcf) 25,760 $5.53 5,877 $5.43 Oil (Bbls) 10,989 $62.72 -- $--