KOG's 3Q10 Financial and Operating Results (Bakken, ND, USA)

Full report here.

Operations

Rigs and Acreage

• Still a two-rig drilling program in the Williston Basin
• Joint venture with one non-operated rig
• Continues to acquire leasehold position in the Williston Basin
• Purchase of 8,960 acres to date in 2010 averaged $1,600/acre

Four-well pad (three middle Bakken and one TFS well) -- should be completed by year-end

• Two Shields Butte (TSB) 14-21-4H
• TSB 14-21-33-16H3 (Three Forks well)
• TSB 14-21-33-15H
• TSB 14-21-16-2H
• To be connected to oil, gas, and water pipelines

Two-well pad, non-operated with working interest

• Tested both the Bakken and Three Forks
• Bakken: 1,385
• TFS: 1,374 
• Evidence that Bakken and TFS are separate oil-bearing reservoirs

Four-well pad, three miles northwest of four-well pad noted above

• TSB 2-24-12-2H
• Skunk Creek (SC) 2-24-25-15H
• TSB 2-24-12-1H3 (Three Forks well)
• SC 2-24-25-16H3 (Three Forks well)
• Grizzly Federal 1-27H-R
• 10 stages
• Intended for Middle Bakken; landed in Three Forks
• Kept it there, to test TFS potential
• IP: 447
• Confirms productive potential of TFS in this area

Financial

Net income $361,000 3Q10 vs ($9,000) 3Q09
Zero cents/share 3Q in both 2009 and 2010
Net operating cash $8 million 3Q10 vs $5.8 million 3Q09
Cash for operations in 3Q10: $20 million

• $18 million for drilling and completing wells
• $2 million for leasehold acquisitions