Forward-Looking Statements

This Quarterly Report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements included in this Quarterly Report, other than statements of historical facts, address matters that the Company reasonably expects, believes or anticipates will or may occur in the future. Forward-looking statements may relate to, among other things:

† the Company's future financial position, including working capital and anticipated cash flow;

† the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas;

† market demand;

† risks and uncertainties involving geology of oil and gas deposits;

† the uncertainty of reserve estimates and reserves life;

† the uncertainty of estimates and projections relating to production, costs and expenses;

† potential delays or changes in plans with respect to exploration or development projects or capital expenditures;

† fluctuations in oil and gas prices, foreign currency exchange rates and interest rates;

† health, safety and environmental risks;

† uncertainties as to the availability and cost of financing; and

† the possibility that government policies or laws may change or governmental approvals may be delayed or withheld.

Other sections of the Quarterly Report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Our forward-looking statements contained in this Quarterly Report are made as of the respective dates set forth in this Quarterly Report. Such forward-looking statements are based on the beliefs, expectations and opinions of management as of the date the statements are made. We do not intend to update these forward-looking statements, except as otherwise required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Overview

Kodiak Oil & Gas Corp. is an independent energy company focused on the exploration, exploitation, acquisition and production of natural gas and crude oil in the United States. Our oil and natural gas reserves and operations are primarily concentrated in two Rocky Mountain basins - the Green River Basin of Wyoming and Colorado and the Williston Basin of North Dakota and Montana. Kodiak's corporate strategy is to internally identify prospects, acquire lands encompassing those prospects and evaluate those prospects using subsurface geology and geophysical data and exploratory drilling. Using this strategy, we have developed an oil and natural gas portfolio of proved reserves, as well as conventional and unconventional prospects, that we have the opportunity to explore, drill and develop.

First Quarter 2008 Highlights

Kodiak's results of operations and financial condition are significantly affected by the success of our exploration and land leasing activity, the resulting production and reserves, oil and natural gas commodity prices, and the costs related to operating our properties. In the first quarter of 2008, our oil and gas revenue increased by 16% from the first quarter of 2007. This increase is largely the result of higher realized prices received for both our crude oil and natural gas production offset by a decrease in our crude oil production. The decrease in our crude oil production was a result of oil producing wells that were shut in for repair and workover procedures. Total costs and expenses decreased to $4.6 million in the first quarter of 2008 from $16.6 million in the first quarter of 2007 largely due to an asset impairment in 2007 of $14.0 million related to the full cost ceiling test. Costs and expenses in the first quarter of 2007 were impacted by higher oil and gas production costs and general and administrative expenses. Included in the oil and gas production costs for the first quarter of 2007 was approximately $467,000 of expenses related to repair work on a producing well. The increase in general and administrative expenses included an increase in the non-cash charge for stock based compensation of $1.2 million. This increase is due to additional options and restricted stock issued since March 31, 2007, and a change in the forfeiture rate assumed for future vested options.

In the first quarter of 2008, we have continued to add to our acreage position in the Bakken play on the Fort Berthold Indian Reservation through continual leasing negotiations and final approval from the Bureau of Indian Affairs. We believe that we have made significant progress in procuring the necessary permit to drill our first well on the Reservation. While this process took longer than expected, the absence of established protocols meant that we and the applicable agencies were required to work cooperatively to establish procedures for the industry and regulatory agencies to follow as oil and gas development progresses. Additionally, we have continued to evaluate our exploration activities related to our prospective land positions by interpreting additional geological and geophysical data in both the Williston Basin and Vermillion Basin properties. We expect that completed 3-D seismic studies, acquired in both Basins in 2007, will prove useful well into the future as we seek to expand our production base through additional drilling.

In January 2008, we entered into the Devon Agreement with Devon Energy Production Company, L.P., a wholly owned subsidiary of Devon Energy Corp ("Devon") under which Devon earned an interest in our leasehold interests in the Vermillion Basin in exchange for, among other things, drilling up to three wells at Devon's sole cost and risk by November 15, 2009.

As part of the Devon Agreement, we and Devon have set forth terms and conditions that create an Area of Mutual Interest (AMI) for the exploration, leasing, and development of certain of our Vermillion Basin properties. Upon completion of each of the three wells, we will have a 50% working interest in each well, proportionately reduced in the event of third-party interest. By drilling the three wells, Devon will earn, among other considerations, 50% of our leasehold interest to all depths within the AMI, excluding any leasehold already jointly held by and between us and Devon and any existing Kodiak wellbores. Through reimbursement of costs totaling approximately $1.2 million, Devon also earned ownership in two existing wells, the Horseshoe Basin 5-3 and Whiskey Canyon Unit #3, so that Devon will own the same interest as Kodiak in these wells. Under the terms of the agreement, Devon will serve as operator but both parties will collaborate by each providing technical input and drilling and completion expertise in order to best develop the AMI properties. With this agreement, we believe that development will continue to move ahead in this play and our capital requirements will be limited in the short-term.

Kodiak ended the first quarter of 2008 with cash and cash equivalents of $9.9 million down from $13.0 million at year-end 2007. Total working capital was also $9.9 million at March 31, 2008, as compared to $10.2 million at December 31, 2007. Cash flow used in operating activities for the first quarter of 2008 was $2.4 million which was largely the result of a $2.7 million reduction in current assets and liabilities. Cash used as capital expenditures for our oil and gas activities totalled $3.1 million for the first quarter of 2008 and was offset by $2.4 million in proceeds from sales of oil and gas properties. Our estimated capital expenditures for the remainder of 2008 of $12.4 million is expected to be funded by existing working capital and other sources of capital including debt or equity financings or by entering into additional joint venture agreements. We can give no assurance that these financing sources will be available under acceptable terms or at all.

Liquidity and Capital Resources

Due to our active oil and natural gas exploration program, we have experienced, and expect to continue to experience, substantial working capital requirements. As a result of the Devon Agreement, we expect to maintain a high level of activity in the Vermillion Basin, without the need for Kodiak to undertake significant capital expenditures in the short-term. Based on our current exploration program and depending on the success in this play, we anticipate additional capital requirements by late 2008 and into 2009. By reducing the immediate capital requirements of the continuing Vermillion Basin exploration, we intend to allocate our existing capital to the Bakken play on the Fort Berthold Indian Reservation in North Dakota. Through an exploration agreement with a joint venture partner in this play, we have limited our initial capital exposure to an approximate 50% working interest in each of the early wells. On other acreage in the same play, we have a higher working interest and may seek to reduce this ownership through further joint ventures which would provide additional capital and reduce Kodiak's total requirements.

In the first quarter of 2008, we incurred capital expenditures of approximately $176,000, net of proceeds from property divestitures and the Devon transaction and including accruals. As of March 31, 2008, our working capital is $9.9 million and we continue to have no long-term debt. Our capital expenditure budget for 2008 is unchanged at a total of $12.6 million which is also net of proceeds from limited divestitures and joint venture arrangements that have occurred or are planned. In addition to this $12.6 million budget, we have other prospects that are in the early stages of exploration. Further spending on these prospects is contingent on the success of

the currently budgeted expenditures. As our anticipated funds from operations are expected to provide only a limited amount of additional working capital, we believe that it is likely that we will need to obtain additional sources of capital to fund further growth and development, the amount and timing of which will depend on the success and timing of our exploration activities. We anticipate that we would seek to obtain additional funding either by means of debt or equity financings or by entering into additional joint venture agreements, the availability of which there can be no assurance.

Our ability to fund our operations in future periods will depend upon our future operating performance, and more broadly, on the availability of equity and debt financing, which will be affected by prevailing economic conditions in our industry and financial, business and other factors, some of which are beyond our control. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue our drilling or exploration program, seek to enter into additional joint venture arrangements with third parties, or seek to sell one or more of our properties.

Oil and Gas Properties

As of March 31, 2008, we had several hundred lease agreements representing approximately 148,481 gross and 91,306 net acres primarily in the Green River and Williston Basins.

As of March 31, 2008, we had acquired 38,686 gross acres and 28,957 net acres in the Bakken oil play in Dunn County, North Dakota. An additional estimated 8,800 net acres have been leased and are in the approval process with the Bureau of Indian Affairs ("BIA"). We cannot be assured that we will receive title to these lands until final approval is received. The majority of our lands in this prospect area are administered by the BIA on behalf of the individual members of the Three Affiliated Tribes Fort Berthold Indian Reservation. Typically these lands are acquired through a private negotiation with the individual land owners or the Three Affiliated Tribes and have a primary lease term of five years. The land owner typically retains an 18% landowner royalty. In most cases, these lands require an annual delay rental of $2.50 per net acre.

As a result of the Devon Agreement, our leasehold interests in the Vermillion Basin total approximately 39,093 gross (14,421 net) acres. The AMI with Devon will expire after a period of five years, unless extended by mutual agreement of both parties. Each party has agreed to a proportionate share of any interest or lease acquired within the participating area.

In January 2008, we completed the sale of 4,784 gross and net acres in an exploratory Mancos Shale gas prospect located in the Sand Wash Basin in Moffat County, Colorado for $1.2 million. We retained a 5% overriding royalty in these properties as well as 100% working interest ownership in the remaining 3,770 acres. We believe the remaining acreage is prospective for production from the Mancos Shale and Niobrara Formation at a shallower depth than that divested.

The following table sets forth our gross and net acres of developed and undeveloped oil and natural gas leases as of March 31, 2008.

                      Undeveloped       Developed
                       Acreage(1)       Acreage(2)      Total Acreage
                     Gross     Net     Gross    Net     Gross     Net
Green River Basin
Wyoming(3)           39,369   16,484   1,400     848    40,769   17,332
Colorado              7,847    5,129       -       -     7,847    5,129
Williston Basin
Montana              37,721   22,476     800     400    38,681   22,958
North Dakota         46,735   34,364   3,040   1,800    49,775   36,164
Other Basins
Wyoming              11,409    9,723       -       -    11,409    9,723

Acreage Totals      143,081   88,176   5,240   3,048   148,481   91,306

(2) Developed acreage is the number of acres that are allocated or assignable to producing wells or wells capable of production.

(3) Excludes 10,261 gross (6,127 net) acres that can be earned pursuant to existing farm-in agreements.

Exploratory Activity

Operations in the Williston Basin of Montana and North Dakota

Bakken Formation-McKenzie and Dunn Counties, North Dakota

We have continued our ongoing acreage acquisition program in Dunn County, North Dakota where the primary objective is the dolomitic, sandy interval layered between the two Bakken Shales at an approximate vertical depth of 10,000 feet. This acreage is in a trend bordered by producing wells drilled by, among others, EOG Resources, Inc. and Whiting Petroleum Corp. to the north and Marathon Oil Corp. and ConocoPhillips to the west and south.

Subject to obtaining a permit to drill from the Bureau of Land Management (BLM) and the BIA and obtaining a drilling rig and equipment, drilling activity should commence in the second quarter of 2008. On April 7, 2008, we received a Finding of No Significant Impact (FONSI) and the necessary approval of the environmental assessment (EA) with respect to the Tall Bear #16-15H well on this prospect. Upon FONSI approval, the EA is subject to a 30 day comment period that will expire in early May 2008, at which time we would expect both final BIA and BLM approval. The EA approval is a key step in the drilling permit process and, while this permit is being processed, Kodiak is preparing to submit additional drilling permits for other wellsites. The Tall Bear #16-15H is a horizontal well targeting oil potential in the Bakken shale and is being permitted to a proposed total depth of 15,600 feet. We will operate and currently own an approximate 70% working interest in the proposed drill site and acreage block, but we may seek to reduce our working interest to approximate 50%.

In early April 2008, we also entered into a long-term contract for a new-build rig from a large land-drilling contractor. The rig is designed to our specifications to optimally drill horizontal Bakken shale wells and other Williston Basin formations. We expect the rig to be delivered in the third quarter of 2008 and it will be used exclusively for our Williston Basin operations, including Red River and Mission Canyon prospects. In order to expedite our Bakken drilling operations on the Tall Bear #16-15H well, we are actively seeking a one-well window for a sub-contracted rig from a drilling contractor or operator in the area.

In the first quarter of 2008, we began workover operations on our producing Bakken oil wells in McKenzie County near the North Dakota and Montana state line. In this play, we intend to clean out and fracture stimulate one well and re-fracture stimulate two wells. As part of this program, in the first quarter of 2008, we performed required repair work on the casing of one well in preparation of the workover operations. This work to repair the casing was completed and the well is capable of producing pending the workover. The net cost of approximately $467,000 related to the repair work was charged to oil and gas production costs and expenses in the first quarter of 2008.

Red River-Mission Canyon Play - Sheridan County, Montana and Divide County, North Dakota

The primary producing objectives in this prospect area are the Mission Canyon and the Red River formations at approximate depths of 8,000 feet and 11,000 feet, respectively. We have recently completed interpreting an approximate 18 square mile 3-D seismic program over a portion of this acreage. The Company has identified two prospects within its acreage that it intends to drill during 2008. The Company has identified seismic leads on other blocks of its acreage that we expect to drill during 2008.

Operations in the Green River Basin of Wyoming and Colorado

Vermillion Basin Deep - Baxter Shale and Frontier and Dakota Sandstone

Our primary leaseholdings in the Green River Basin are located in an area referred to as the Vermillion Basin. In this geologic region, we believe there is natural gas trapped in various sands, coals and shales at depths ranging from 2,000 feet to nearly 15,000 feet. The primary target of our current exploration efforts in this area is the over-pressured Baxter Shale at depths to approximately 13,000 feet.

In late 2007, we completed drilling operations on the Horseshoe Basin #5-3 well (50% WI, 42% NRI, operated by Devon) located on the western edge of the prospective producing area. This well was drilled vertically to a depth of 13,534 feet to evaluate the potential of the Almond and Ericson formations, the Baxter Shale and the Frontier Formation. The well was a significant step out and it is approximately 6 miles from the closest producing well. Following fracture stimulation of the Baxter shale in November, the initial twenty-four hour flowback rate was estimated at 3.0 million cubic feet (MMcf) of natural gas on a 16/64" choke and 3,500 psia of flowing casing pressure. Subsequently, the well was tested for 48 hours through a test separator and stabilized at approximately 2.0 MMcf per day with 350 barrels of condensate per

day. The well is currently waiting on the completion of a gathering pipeline which is expected to be in place by mid-summer 2008. Although Kodiak drilled and completed this well, as part of the Devon Agreement, Devon earned an increased ownership in this well and now operates the well.

Our 2008 exploration efforts in the Vermillion Basin prospect area will largely be driven by Devon. It is currently expected that the first drilling activities will be conducted on the western portion of our acreage in the Horseshoe Basin Unit in an effort to extend the reservoir as found in of the Horseshoe Basin #5-3 well. Drilling is anticipated to commence in the second quarter 2008 and continue into the fall months as lease stipulations expire and the locations are accessible. While drilling plans are still being finalized, we anticipate the first well will be a vertical well to evaluate only the Baxter Shale. The wells will be engineered to allow re-entry for horizontal drilling applications at a later date, if desired. Concurrently with the drilling activity we anticipate the acquisition of 3-D seismic covering the Horseshoe Basin Unit to help facilitate a development program in 2009 and beyond. We have completed the processing and interpretation of approximately 43 square miles of 3-D seismic on the northern block of our acreage which includes portions of our Chicken Springs and Chicken Ranch Federal Units, as well as land currently not included in federal units. While no specific drilling locations have yet been determined, we anticipate that additional wells will be drilled under the Devon Agreement in this area as a result of the seismic evaluation.

Production, Average Sales Prices, and Production Costs

Kodiak's results of operations and financial condition are significantly affected by oil and natural gas commodity prices, which can fluctuate dramatically. The commodity prices are beyond our control and are difficult to predict. Market prices reflect worldwide concerns about producer ability to ensure sufficient supply to meet increasing demand amid a host of uncertainties caused by political instability, a weaker U.S. dollar and crude oil refining constraint. We receive lower prices for our oil and gas than what is posted on the New York Mercantile Exchange (NYMEX). The price differentials received for our products vary from month to month and the Company does not currently have hedges of its commodity sales in place.

The Company's oil and gas sales volumes are a direct result of the success of its exploratory and acquisition activities. Production volumes may vary monthly as various wells are completed or maintained to provide optimal flows.

Sales volumes, prices received, and production costs are summarized in the following table for the three-month periods ending March 31, 2008, and March 31, 2007. In the first quarter of 2008, we began preparations to perform workovers on our producing Bakken oil wells in McKenzie County, North Dakota. Although this work is expected to improve the production capabilities and increase their recoverable reserves, while the project is in progress, the wells' production will be negatively impacted. As part of this preparation work, we performed repairs on the casing of one well and that well and another were shut in intermittently during the first quarter of 2008. As a result, our oil production for the quarter decreased significantly and the expenses that were incurred for repair work increased operating expenses by approximately $467,000. The sales volume and production cost metrics shown below reflect the effect of the reduced production and increased expenses.

                                                    For the Three Months
                                                       Ended March 31,
                                                     2008            2007

       Sales Volume:
       Gas (Mcf)                                       66,600          45,915
       Oil (Bbls)                                      15,848          25,266

       Price:
       Gas ($/Mcf)                               $       6.99    $       6.52
       Oil ($/Bbls)                              $      89.12    $      50.55

       Production costs ($/BOE):
       Lease operating expenses                  $      29.48    $       7.04
       Production and property taxes             $       5.87    $       4.35
       Gathering, Transportation and Marketing   $       1.13    $       0.48

Capital Expenditures

We anticipate net capital expenditures of $12.6 million in 2008. The following tables set forth our capital expenditures for the three months ended March 31, 2008, and our planned capital expenditures for our principal properties in 2008. Net capital expenditures include both cash and accrued expenditures and are net of proceeds from divestitures. The 2008 estimated expenditures do not include the costs to drill additional wells that will help further evaluate our properties in the Vermillion Basin. These wells are to be drilled at the sole cost of Devon under the Devon Agreement.

                                                      Net Capital
                                                     Expenditures         Total 2008
                                                     for the Three        Estimated
                                                     Months ended        Net Capital
                                                       March 31,         Expenditures
Project Location                                    2008 ($ 000)(1)       ($ 000)(1)
Wyoming
Vermillion Basin wells and related
infrastructure                                     $             275    $          743
Other Wyoming wells and related infrastructure                    33              (845 )
Acreage/Seismic                                                 (957 )           1,350
Total Wyoming                                                   (649 )           1,248
Williston Basin
Mission Canyon/Red River wells and related
infrastructure                                                   105             1,127
Bakken wells and related infrastructure                           80             9,616
Acreage/Seismic                                                  640               621
Total Williston Basin                                            825            11,363
Total All Areas                                    $             176    $       12,612

Results of Operations



Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007



                                                              Three months ended March 31,
                                                                 2008              2007

Financial Results
Total revenue                                               $     1,961,537    $   2,140,527
Total costs and expenses                                          4,593,573       16,595,360
. . .