Kodiak Oil & Gas Reports Third Quarter 2006 Results

DENVER, Nov. 7  /PRNewswire-FirstCall/ -- Kodiak Oil & Gas Corp. (Amex: KOG; TSX Venture), 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 nine months ended September 30, 2006.  Financial tables for the nine-month period and third quarter 2006 are included at the end of this news release.

Nine months ended September 30, 2006

The Company reported a net loss for the nine months ended September 30, 2006 of $1,403,000 or $0.02 per share compared with a net loss of $868,000 or $0.02 per share for the same period 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 $968,000 for the nine-month period ended September 30, 2006 as compared to a loss of $864,000 for the same period ending September 30, 2005.  Oil and gas sales for the nine-month period were $2,811,000 versus $102,000 in the same period in 2005. Total revenues were $3,411,000 versus $172,000 in the same period a year ago.

Gas production volumes were 93,721 thousand cubic feet (Mcf) for the nine-month period ended September 30, 2006, compared to 28,907 Mcf for the same period in 2005.  Oil production volumes were 38,223 barrels for the nine-month period ended September 30, 2006, compared to 300 barrels during the same period in 2005.  For the nine-month period ending September 30, 2006, Kodiak produced 53,834 barrels of oil equivalent using a conversion rate of 6 Mcf gas to each barrel of oil.

Gas price realizations decreased 16.5% to $5.96 per Mcf for the nine-month period ended September 30, 2006, compared to the same period in 2005.  Oil price realizations decreased 1.42% to $58.93 per barrel for the period ended September 30, 2006.  Kodiak's production is currently unhedged.

As of September 30, 2006, Kodiak had working capital of $21,025,000 with no long-term debt.  During the nine- month period ended September 30, 2006, the Company invested $22,111,000 for exploration and development of its leasehold.

Results are presented for the nine-month period because comparisons to the year-ago quarterly period are skewed by the capital the Company has raised and the investment in developing its properties. Kodiak will present quarterly comparisons as they become a more meaningful way to assess financial and operational performance and expected growth.

Management Comments

Commenting on today's results, Lynn Peterson, Kodiak's President and CEO said: "We have continued to increase our revenues each of the three quarters of 2006 as we progress in developing our leasehold.  With our recent discoveries in the Williston Basin we would expect that trend to continue into the fourth quarter.  The importance of our Williston oil plays is evident in the cash flow it throws off at historically high oil prices.

"In the Vermillion Basin in Wyoming, the North Trail State #4-36 well is drilling below 9,200 feet and we anticipate entering the over-pressured pay in the coming week.  This is our first well drilled in the highly over-pressured Baxter Shale and Frontier and Dakota Sands and we are pleased with our progress to date.  With $21 million in cash at September, 30, 2006, and zero debt, Kodiak is well-positioned to fund its remaining 2006 CAPEX program and into the first half of 2007.  We expect to fund the 2007 CAPEX through a combination of cash on hand, cash flow, access to a reserve-based revolving line of credit which we intend to establish by year-end, and the equity markets."

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.

      [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 for the period ended September 30, 2006.



                          KODIAK OIL & GAS CORP
                              BALANCE SHEET

                                                   UNAUDITED      AUDITED
                                                 September 30,  December 31,
                          ASSETS                     2006           2005
  Current assets:
    Cash and cash equivalents                     $21,432,860    $7,285,548
    Accounts receivable
       Trade                                        1,126,530       447,981
       Accrued Sales                                  430,659       226,406
    Prepaid expenses and other                        138,092        30,631

             Total Current Assets                  23,128,141     7,990,566

  Property and equipment (full cost method),
   at cost:
  Proved oil and gas properties                    26,191,988    11,277,307
     Unproved oil and gas properties               12,010,614     6,307,903
     Less-accumulated depletion,
      depreciation and amortization                (1,443,314)     (121,941)
                                                   36,759,288    17,463,269
     Other property and equipment, net of
      accumulated depreciation of $95,904 in
      2006 and $47,525 in 2005                        158,561       183,481
  Restricted Investment                               217,400       153,000

  Total Assets                                    $60,263,390   $25,790,316

           LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities:
    Accounts payable and accrued liabilities       $2,103,383    $4,411,572

  Noncurrent liabilities:
    Asset retirement obligation                       159,065        69,073
           Total Liabilities                        2,262,448     4,480,645

  Commitments and Contingenicies - Note 7
  Stockholders' equity:
    Common stock, $0.01 par value: authorized -
    100,000,000 Issued:  74,969,426 shares in
    2006 and 54,547,158 in 2005                       749,694       545,472
    Additional paid in capital                     64,483,787    26,593,826
    Accumulated deficit                            (7,232,539)   (5,829,627)

            Total Stockholders' Equity             58,000,942    21,309,671

  Total Liabilities and Stockholders' Equity      $60,263,390   $25,790,316



                          KODIAK OIL & GAS CORP.
                         STATEMENT OF OPERATIONS
                               (UNAUDITED)

                               Three months ended       Nine months ended
                                  September 30,            September 30,
                                2006        2005         2006       2005

  Revenues:
     Gas production           $143,504     $65,315     $558,768     $78,860
     Oil production            897,085      22,656    2,252,499      22,656
     Interest                  232,446      39,402      599,285      70,727
          Total revenue      1,273,035     127,373    3,410,552     172,243

  Cost and expenses:
     Oil and gas production    194,021      55,693      543,681     130,039
     Depletion,
      depreciation,
      amortization
      and abandonment
      liability accretion      494,829      15,287    1,374,019      29,019
     General and
      administrative           980,100     289,791    3,270,534     891,263
     Gain on currency
      exchange                  (6,627)   (181,146)    (374,770)     (9,868)

          Total costs and
           expenses          1,662,323     179,625    4,813,464   1,040,453

  Net loss for the period    $(389,288)   $(52,252) $(1,402,912)  $(868,210)

  Basic & diluted
   weighted-average common
   shares outstanding       74,939,654  44,825,221   69,706,082  42,825,894

  Basic & diluted net loss
   per common share             $(0.01)     $(0.00)      $(0.02)     $(0.02)




                          KODIAK OIL & GAS CORP.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (UNAUDITED)

                                             Nine Months Ended September 30,
                                                    2006          2005

  Cash flows from operations
     Net loss                                   $(1,402,912)   $(868,210)
  Reconciliation of net loss to net
   cash provided by operating activities:
       Depletion, depreciation, amortization
        and abandonment liability accretion       1,374,019       29,019
       Stock based compensation                   1,372,152           --
    Changes in currrent assets and liabilites
       Accounts receivable-Trade                   (678,549)     (19,362)
       Accounts receivable-Accrued Sales           (204,253)    (127,100)
       Prepaid expenses and other                  (107,462)    (599,462)
       Accounts payable                            (728,440)      27,005

   Net cash used by operating activities           (375,445)  (1,558,110)

  Cash flows from investing activities
       Oil and gas properties                   (22,111,417)  (4,852,896)
       Equipment                                    (23,457)     (76,512)
       Restricted investment: designated
        as restricted                               (53,800)          --
       Restricted investment: undesignated
        as restricted                               (10,600)          --

  Net cash used for investing activities        (22,199,274)  (4,929,408)

  Cash flows from financing activity
       Proceeds from the issuance of shares      39,631,329    9,679,567
           Issuance costs                        (2,909,298)    (292,370)

  Net cash provided by financing activities      36,722,031    9,387,197

  Net change in cash and cash equivalents        14,147,312    2,899,679

  Cash and cash equivalents at beginning
   of the period                                  7,285,548    2,707,763

  Cash and cash equivalents at end of
   the period                                   $21,432,860   $5,607,442

  Non-cash Items
    Oil & Gas Property accrual included in
     Accounts Payable                            $1,726,890     $325,570

    Asset retirement obligation                     $85,725          $--



                        Product Volumes and Prices

                                       Three months ended  Nine months ended
                                         September 30,       September 30,
                                         2006     2005       2006     2005

  Volume:
      Gas (Mcf)                         36,434   23,030     93,721   28,907
      Oil (Bbls)                        14,316      300     38,223      300

  Price:
      Gas (Mcf)                          $5.02    $5.43      $5.96    $7.14
      Oil (Bbls)                        $62.66   $59.78     $58.93   $59.78


DATASOURCE: Kodiak Oil & Gas Corp.



CONTACT:  Mr. Lynn A. Peterson, President of Kodiak Oil & Gas Corp.,

[phone]; or Mr. David Charles of EnerCom, Inc. [phone], for

Kodiak Oil & Gas Corp.; or Ms. Heather Colpitts, Associate Account Manager of

CHF Investor Relations, [phone], ext. 223, for Kodiak Oil & Gas Corp.



Web site:  http://www.kodiakog.com/ 

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