Kodiak Oil & Gas Reports Fourth Quarter and Full-Year 2006 Results



    DENVER, March 19 /CNW/ -- 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 three months and 12 months ended December 31, 2006. Financial
tables for the full-year and the fourth quarter 2006 are included at the end
of this news release.

    Full-Year 2006

    The Company reported a net loss for the 12 months ended December 31, 2006
of $2.8 million, or $0.04 per share, compared with a net loss of $2.0 million,
or $0.05 per share, for the same period in 2005. All per share amounts are
presented on a weighted average basis. Kodiak had 87.5 million shares
outstanding at year-end 2006 as compared to 54.5 million shares outstanding at
year-end 2005. Net income before depreciation, depletion and amortization and
stock-based compensation charges ("Adjusted EBITDA") was $947,000 for the
year-ended December 31, 2006 as compared to a loss of $1.2 million for the
same period in 2005.
    Oil and gas sales for the full-year 2006 were $4.2 million versus
$365,000 in the same period in 2005. Total revenues were $5 million versus
$453,000 in the same period a year ago. For the full-year 2006, Kodiak posted
operating cash flow of $3.1 million as compared to cash used by operations in
2005 of $1.2 million.
    Total assets were $113.8 million at year-end 2006, up from $25.8 million
in the same period in 2005. Stockholders' equity grew to $103.6 million
December 31, 2006 from $21.3 million at year-end 2005. The Company's cash
position at year-end is $61.1 million, and it currently has no long-term debt.

    Fourth Quarter 2006

    The Company reported a net loss for the three months ended December 31,
2006 of $2.2 million, or $0.02 per share, compared with a net loss of $1.1
million, or $0.02 per share, for the same period in 2005. Net loss before
depreciation, depletion and amortization and stock-based compensation charges
("Adjusted EBITDA") was $21,000 for the quarter-ended December 31, 2006 as
compared to a loss of $361,000 for the same period in 2005.
    Oil and gas sales for the fourth quarter were $1.3 million versus
$264,000 in the same period in 2005. Total revenues were $1.6 million versus
$280,000 in the same period a year ago.  For the fourth quarter 2006, Kodiak
posted operating cash flow of $3.5 million as compared to $337,000 in the same
period in 2005.

    Production

    For the full-year 2006, gas and natural gas liquid production volumes
were 117.3 MMcf, as compared to 31.8 MMcf for the same period in 2005. Oil
production volumes were 62,000 barrels for 2006, compared to 2,700 barrels
during the same period in 2005. For full-year 2006, Kodiak produced 489.1
MMcfe using a conversion rate of 6 Mcf gas to each barrel of oil. This
compares to 47.9 MMcfe in all of 2005.
    Gas price realizations decreased 22% to $5.56 per Mcf for the full-year
2006, compared to the same period in 2005. Oil price realizations improved by
7% to $55.52 per barrel for the period-ended December 31, 2006. Kodiak's
production is currently unhedged.
    During 2006, Kodiak invested $36.7 million for exploration and
development of its leasehold, including drilling nine gross wells (5.88 net)
with one gross dry hole (0.5 net) for an 89% success rate for the 2006
program. Also included in the year's CAPEX was $13.3 million for leasehold and
seismic acquisition.
    For the fourth quarter 2006, gas production volumes were 27.3 MMcf, as
compared to 29.2 MMcf for the same period in 2005. Oil production volumes were
24,000 barrels for the fourth quarter 2006, compared to 2,600 barrels during
the same period in 2005. On an equivalent basis for the quarter, Kodiak
produced 169.7 MMcfe, versus 44.9 MMcfe in the fourth quarter 2005.
    For the fourth quarter, gas price realizations decreased 22% to $4.55 per
Mcf, as compared to the same period in 2005. Oil price realizations decreased
by 6% to $55.52 per barrel for the period-ended December 31, 2006. Kodiak's
production is currently unhedged.

    Reserves

    Kodiak's year-end, estimated total proved reserves were approximately 5.6
billion cubic feet of natural gas equivalent (Bcfe), comprised of 2.4 billion
cubic feet of natural gas (Bcf) of natural gas and 532,900 barrels of crude
oil. The current reserve mix is 57% crude oil and 43% natural gas.
Approximately 96% of total reserves are categorized as proved developed and 4%
were proved undeveloped (PUD). Year-end prices used to determine reserves were
$4.53 per Mcf of natural gas and $50.37 per barrel of oil for 2006, versus
$8.11 per Mcf and $57.57 per barrel in 2005.
    By comparison, at year-end 2005, Kodiak's proved reserves were 5.96 Bcfe,
of which 52.4% was oil and 62% were proved developed and 38% were classified
as PUDs. The sharp drop in commodity prices used to determine reserves,
especially the decline in natural gas prices year-over-year, resulted in the
reduction in PUD locations given to the Company by its independent reservoir
engineering firm, Netherland Sewell & Associates, Inc. (NSAI).
    For 2006 reserve quantities, Kodiak's standardized measure of discounted
future net cash flows (commonly known as the SEC PV-10 figure) for proved
reserves at year end was $19.7 million as compared to $18.2 million in 2005.
Reserves for 2006 were estimates by independent reservoir engineering
consultants, NSAI and conform to the definition as set forth in the SEC
Regulation S-X Part 210.4-10 (a) as clarified by subsequent Commission Staff
Accounting bulletins. The proved reserves are also in accordance with
Financial Accounting Standards Board Statement No. 69 requirements. Sproule
Associates, Inc. estimated quantities for 2005.

    Management Comment

    Commenting on today's results, Lynn Peterson, Kodiak's President and CEO
said: "Continued growths in production, oil and gas sales and in shareholders'
equity are a few of the accomplishments I can point to for 2006. Like other
Rockies' operators, the December 31, 2006 gas prices effected booking our
PUDs. More important is our early results in the Vermillion Basin which is
bolstered by continued cash flow from our Williston Basin oil production. That
production affords us the opportunity to leverage G&G talent to maximizing the
potential that we believe exists in the Vermillion Basin, a play that we
believe is in its nascent days. We are fortunate to have completed a capital
raise at the end of 2006, which has left Kodiak well-positioned to fund its
$60 million capital budget through a combination of cash on hand, cash flow
and an anticipated reserve-based revolving line of credit. The hard work
completed in 2005 and 2006 is essential in providing a platform as we seek to
grow our production and reserves. We expect our performance in these important
measures to be scrutinized much more carefully as production history becomes
available and additional Vermillion Basin wells are drilled and turned to
sales in 2007."

    Use of Non-GAAP Financial Measures

    This press release includes non-GAAP financial measures entitled
"Adjusted EBITDA." For a reconciliation of this non-GAAP financial measures to
its most comparable financial measure under GGAO, as well as for a description
as to why management believes that this measure is useful for investors, see
the footnotes following the tables at the end of this press release.

    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 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.

    [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-K for the period ended December 31, 2006.

    
                            KODIAK OIL & GAS CORP.
                          CONSOLIDATED BALANCE SHEET

                                              December 31,      December 31,
                            ASSETS                  2006              2005
    Current assets:
      Cash and cash equivalents                $58,469,263        $7,285,548
      Accounts receivable
         Trade                                   1,877,185           447,981
          Accrued Sales                            666,990           226,406
      Prepaid expenses and other                   103,707            30,631

               Total Current Assets             61,117,145         7,990,566

    Property and equipment (full cost
     method), at cost:
    Proved oil and gas properties               27,167,338         8,816,220
       Unproved oil and gas properties          19,607,474         6,307,903
       Wells in progress                         7,700,415         2,461,087
       Less-accumulated depletion,
        depreciation and amortization           (2,224,962)         (121,941)
                                                52,250,265        17,463,269
       Other property and equipment, net
        of accumulated depreciation
        of $102,231 in 2006 and
        $47,525 in 2005                            181,752           183,481
    Restricted Investments                         224,452           153,000

    Total Assets                              $113,773,614       $25,790,316

         LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
      Accounts payable and accrued liabilities  $9,879,104        $4,411,572

    Noncurrent liabilities:
      Asset retirement obligation                  249,695            69,073
             Total Liabilities                  10,128,799         4,480,645

    Commitments and Contingenicies - Note 7
    Stockholders' equity:
      Common stock, $0.01 par value:
       authorized-100,000,000
      Issued:  87,548,426 shares in 2006
       and 54,547,158 in 2005                      875,484           545,472
      Additional paid in capital               111,384,998        26,593,826
      Accumulated deficit                       (8,615,667)       (5,829,627)

              Total Stockholders' Equity       103,644,815        21,309,671

    Total Liabilities and Stockholders'
     Equity                                   $113,773,614       $25,790,316



                            KODIAK OIL & GAS CORP.
                     CONSOLIDATED STATEMENT OF OPERATIONS

                                        For the Years Ended December 31,
                                        2006          2005           2004

    Revenues:
       Gas production                 $718,926       $225,524           $--
       Oil production                3,440,182        140,056            --
       Interest                        806,061         87,555        20,449
            Total revenue            4,965,169        453,135        20,449

    Cost and expenses:
       Oil and gas production          964,685        201,885            --
       Depletion, depreciation,
        amortization and
        abandonment liability
        accretion                    2,173,918        157,868         13,671
       General and administrative    4,580,598      2,002,609      1,137,452
        (Gain)/Loss on currency
        exchange                        32,008         95,864        (68,574)

            Total costs and
             expenses                7,751,209      2,458,226      1,082,549

    Net loss for the period        $(2,786,040)   $(2,005,091)   $(1,062,100)

    Basic & diluted
     weighted-average
     common shares outstanding      71,425,243     44,447,269     27,696,443

    Basic & diluted net
     loss per common share              $(0.04)        $(0.05)        $(0.04)



                            KODIAK OIL & GAS CORP.
                     CONSOLIDATED STATEMENT OF CASH FLOWS

                                          For the Years Ended December 31,
                                          2006         2005         2004

    Cash flows from operations
       Net loss                      $(2,786,040)  $(2,005,091)  $(1,062,100)
    Reconciliation of net loss
     to net cash provided by
     operating activities:
         Depletion, depreciation,
          amortization and
          abandonment liability
          accretion                    2,173,918       157,868        13,671
         Stock based compensation      1,527,361       541,111       411,238
      Changes in currrent assets
       and liabilites
         Accounts receivable- Trade   (1,429,204)     (424,322)      (53,505)
         Accounts receivable-
          Accrued Sales                 (440,585)     (227,500)           --
         Prepaid expenses and
          other                          (73,076)          785            --
         Accounts payable              4,168,775       735,928       281,083
         Due to related party                 --            --       (35,246)

     Net cash provided (used by)
      operating activities             3,141,149    (1,221,221)     (444,859)

    Cash flows from investing
     activities
         Oil and gas properties      (35,426,830)  (11,853,969)   (1,672,300)
         Equipment                       (52,976)     (124,196)     (106,811)
         Restricted investment:
          designated as restricted       (82,052)      153,000            --
         Restricted investment:
          undesignated as
          restricted                      10,600            --            --

    Net cash used for investing
     activities                      (35,551,258)  (11,825,165)   (1,779,111)

    Cash flows from financing
     activity
         Proceeds from the
          issuance of shares          89,940,060    18,227,543     5,441,281
             Issuance costs           (6,346,236)     (292,370)     (263,801)
         Proceeds from
          (repayment of) related
          party note payable                  --            --      (270,654)

    Net cash provided by
     financing activities             83,593,824    17,935,173     4,906,826

    Net change in cash and cash
     equivalents                      51,183,715     4,582,785     2,682,856

    Cash and cash equivalents at
     beginning of the period           7,285,548     2,702,763        19,907

    Cash and cash equivalents at
     end of the period               $58,469,263    $7,285,548    $2,702,763
    Cash paid for interest                   $--           $--        $8,824

    Non-cash Items
      Oil & Gas Property accrual
       included in Accounts Payable   $4,605,396    $3,306,641           $--

      Asset retirement
       obligation                       $231,431       $67,000           $--
    


    Use of Non-GAAP Financial Matters

    We use EBITDA, as adjusted as described below, and referred to Adjusted
EBITDA, as a supplemental measure of our performance that is not required by,
or presented in accordance with, GAAP.  We define Adjusted EBITDA as net
income before (i) interest expense, (ii) income taxes, (iii) depreciation,
depletion and amortization, (iv) non-cash expenses relating to share based
payments under FAS 123Rm (v) pre-tax unrealized gains and losses on foreign
currency and (vi) accretion of abandonment liability.  We present Adjusted
EBITDA because we consider it an important supplemental measure of our
performance, in particular because it excludes amounts, such as expenses
relating to share-based payments and unrealized gains and losses on foreign
currency, that do not relate directly to our operating performance on a more
consistent basis, we use this measure for business planning and analysis
purposes and in assessing acquisition opportunities and overall rates of
return.  Adjusted EBITDA is not a measurement of our financial performance
under GAAP and should not be considered as an alternative to net income,
operating income or another performance measure derived in accordance with
GAAP, as an alternative to cash flow from operating activities or as a measure
of our liquidity.  You should not assume that the Adjusted EBITDA amounts
shown in the prospectus are comparable to Adjusted EBITDA amounts disclosed by
other companies.  In evaluating Adjusted EBITDA, you would be aware that it
excluded expenses that we will incur in the future on a recurring basis.
Adjusted EBITDA has limitations as an analytical too, and you should not
consider it in isolation.  Some of is limitations are:  it does not reflect
non-cash costs of our stock incentive plans, which are an ongoing component of
our employee compensation program; and although depletion, depreciation and
amortization are non-cash charges, the assets being depleted, depreciated and
amortized will often have to be replaced in the future, and Adjusted EBITDA
does not reflect the cost or cash requirements for such replacements.  We
compensate for these limitations by relying primarily on our GAAP results and
using Adjusted EBITDA only supplementally.



    Reconciliation between Adjusted EBITDA and net income is provided in the
table below for the twelve month periods ended December 31:

    
                                                   Year ended December 31,
                                                   2006              2005

    Net Loss                                   $(2,786,040)      $(2,005,091)
      Add back:
         Depreciation, depletion & amortization
          expense                                2,173,918           157,868
         Loss on foreign currency exchange          32,008            95,864
         Stock based compensation expense        1,527,361           541,111

    EBITDA                                        $947,247       $(1,210,248)

    Reconciliation between Adjusted EBITDA and net income is provided in the
table below for the three months ended December 31:

                                                     Three months Ended
                                                         December 31,
                                                   2006              2005

    Net Loss                                   $(2,238,271)      $(1,136,880)
      Add back:
         Depreciation, depletion & amortization
          expense                                1,655,012           128,849
         Loss on foreign currency exchange         406,778           105,773
         Stock based compensation expense          155,209           541,111

    EBITDA                                        $(21,272)        $(361,147)
    
    %SEDAR: 00007900E




For further information:

For further information: Mr. Lynn A. Peterson, President of Kodiak Oil &
 Gas Corp., +1-303-592-8075; or Mr. David Charles of EnerCom, Inc.,
+1-303-296-8834, for Kodiak Oil & Gas Corp.; or Ms. Heather Colpitts,
Associate Account Manager of CHF Investor Relations, +1-416-868-1079, ext.
223, for Kodiak Oil & Gas Corp.

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