Kodiak Oil & Gas Corp., an oil and gas exploration and production company with primary assets in the Williston Basin of North Dakota, provided an interim corporate update on recent completion and drilling activities.
Interim Completion Operations Update
Kodiak completion operations in the Williston Basin continue with two full-time, 24-hour-per-day crews. During the fourth quarter through November 30, 2012, the Company completed 17 gross (16 net) operated wells and anticipates completing an additional nine gross (8 net) operated wells during December, bringing the fourth quarter 2012 completions to 26 gross (24 net) operated wells.
Over the last two weeks of November 2012, the Company's net oil and gas sales averaged approximately 22,000 barrels of oil equivalent per day (BOE/d); assuming non-operated production during that period was unchanged from third quarter results. Several of the recent well completions occurred in late November and early December and therefore did not materially contribute to the November oil and gas sales averages.
Interim Drilling Operations Update
Kodiak's drilling operations continue with seven operated rigs. Currently, two drilling rigs are operating in the Polar project area in southern Williams County and two rigs are operating in Dunn County, with one rig in each of the Smokey, Koala and Grizzly project areas in McKenzie County. As a result of Kodiak's continued efficiencies in its drilling operations and the resultant decrease in spud-to-rig-release drilling times, the Company intends to release one of the drilling rigs in January 2013 and initially plans to operate six rigs during the remainder of 2013.
As announced earlier, the Company is in the process of commencing drilling to test tighter well bore density in its Polar and Smokey operating areas. In these two areas the Company intends to drill up to 12 wells within a drilling spacing unit (DSU) to target the Middle Bakken and the two upper intervals of the Three Forks formations. Three four-well pads are being constructed in the Polar pilot project and three drilling rigs are expected to be mobilized on these pads in early 2013. In Kodiak's Smokey block, two wells within the test DSU have recently been fracture stimulated and are currently flowing back. A rig is on location with the intention to drill three additional well bores into the same DSU. The balance of the wells are expected to be drilled later in 2013.
Commenting on ongoing operations, Kodiak's Chairman and CEO Lynn A. Peterson said: "We are very pleased with the efficient pace of our completion operations. Our production base continues to grow as we bring wells onto production and we remain on track to meet our previously announced guidance. We continue to be encouraged by the consistent well results throughout our operating areas and by the similarity in our production results between wells drilled in the Middle Bakken and in the Three Forks formations.
"We are looking forward to commencing the drilling of our down-spacing projects. It is important that we do this work in the early stages of our development program in order to gain information to help us best drain the reservoirs. We will continue to monitor other operators' results from tighter drilling as well as results from wells drilled in the deeper benches of the Three Forks Formation. Both of these developments could have a significant impact on the entire Williston Basin."