KODIAK OIL & GAS CORP 
By DENVER, Feb. 27, 2014 /PRNewswire/ -- Kodiak Oil & Gas Corp. (NYSE: KOG), an oil and gas exploration and production company with primary assets in the Williston Basin of North Dakota, today reported financial results for the three and twelve month periods ended December 31, 2013. The Company previously furnished an operations update and reported sales volumes in a news release on February 11, 2014.
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Financial Results
For the fourth quarter ended December 31, 2013, the Company reported oil and gas sales of $266.5 million, as compared to $130.8 million during the same period in 2012, an increase of 104%. Kodiak reported an overall 98% increase in quarter-over-quarter equivalent sales volumes with 3.3 million barrels of oil equivalent (MMBOE) sold or an average of 36,100 BOE per day (BOE/d) during the fourth quarter 2013, as compared to 1.7 MMBOE, or an average of 18,200 BOE/d in the same period in 2012. Oil and gas sales were $904.6 million for the year ended December 31, 2013, as compared to $408.7 million for 2012, representing a 121% increase. For 2013, Kodiak reported a 101% increase in oil sales volumes and a 119% increase in gas sales volumes, reflecting an overall 103% increase in equivalent sales volumes, compared to 2012. The Company reported sales volumes for 2013 of 10.6 MMBOE, as compared to 5.3 MMBOE during 2012. Crude oil accounted for approximately 95% of revenue and 89% of oil and gas sales volumes recorded during the fourth quarter and year ended December 31, 2013, respectively.
Adjusted EBITDA was $199.7 million for the fourth quarter 2013, as compared to $106.6 million in the same period in 2012, reflecting an 87% increase. For the full year ended December 31, 2013, Adjusted EBITDA was $669.4 million, as compared to $317.1 million for 2012, representing 111% growth. Adjusted EBITDA is a non-GAAP financial measure. For additional information please refer to the reconciliation of this measure at the end of this news release.
Kodiak reported net cash provided by operating activities during the fourth quarter 2013 of $168.1 million, as compared to $69.4 million during the same period in 2012. Kodiak reported net cash provided by operating activities during 2013 of $553.6 million, as compared to $272.7 million in 2012.
For the fourth quarter 2013, the Company reported net income of $46.6 million, or $0.17 per diluted share, compared to a net gain of $33.3 million, or $0.12 per diluted share, for the same period in 2012.
Kodiak reported record net income for the full year 2013 of $141.4 million, or $0.53 per diluted share, compared to net income of $131.6 million, or $0.49 per diluted share, for 2012.
General and administrative expenses (G&A) for the fourth quarter of 2013 totaled $14.0 million, or $4.22 per BOE, compared to $9.4 million, or $5.58 per BOE, in the fourth quarter of 2012. G&A expenses for the full year 2013 totaled $47.2 million, or $4.44 per BOE, as compared to $34.5 million, or $6.57 per BOE, for the full year 2012. The increase in total G&A expense for the fourth quarter and full year 2013, as compared to the same periods in 2012, is attributed primarily to the hiring of new personnel as the Company continues to expand its oil and gas operations. As of December 31, 2013, Kodiak had 202 employees, as compared to 102 employees as of December 31, 2012.
Lease operating expenses (LOE) for the fourth quarter of 2013 totaled $21.7 million, or $6.54 per BOE, a 9% increase per BOE over the fourth quarter of 2012 of $6.00 per BOE. Lease operating expenses for the full year 2013 totaled $69.0 million, or $6.48 per BOE, a 7% increase per BOE over the full year 2012 of $31.7 million, or $6.04 per BOE. The Company continues efforts to decrease operating costs primarily by addressing water disposal costs, the largest component of LOE. Gathering and connection work continues on water disposal wells helping to minimize trucking costs and reduce third-party services.
During the three and twelve months ended December 31, 2013, Kodiak recognized total interest expense related to its outstanding senior notes and credit facility of approximately $23.6 million and $74.2 million, respectively. The Company capitalized interest costs of $9.0 million for the fourth quarter of 2013 and $34.6 million for the full-year 2013.
The following table summarizes the Company's costs on a per-unit basis for the periods shown:
Kodiak Oil & Gas
Corp. QTD YTD % Change
--- --- --------
Unit Cost Analysis Q4-13 Q3-13 Q4-12 2013 2012 Sequential Q-o-Q Y-o-Y
------------------ ----- ----- ----- ---- ---- ---------- ----- -----
Sales Volumes in
Barrels of Oil
Equivalent (MBOE) 3,324 3,257 1,678 10,646 5,254 2% 98% 103%
----- ----- ----- ------ ----- ---
Average Price
Received Oil
($/Bbl) $85.09 $98.19 $83.27 $90.92 $83.00 (13)% 2% 10%
------------- ------ ------ ------ ------ ------ ---- --- ---
Average Price
Received Gas
($/Mcf) $6.61 $6.32 $5.83 $6.40 $5.53 5% 13% 16%
------------- ----- ----- ----- ----- ----- --- --- ---
Average Price
Received BOE
($/BOE) $80.17 $91.97 $77.99 $84.97 $77.78 (13)% 3% 9%
------------- ------ ------ ------ ------ ------ ---- --- ---
Expenses
--------
Lease Operating
Expense ($/BOE) $6.54 $6.28 $6.00 $6.48 $6.04 4% 9% 7%
---------------- ----- ----- ----- ----- ----- --- --- ---
Production Tax
($/BOE) $8.65 $10.00 $8.56 $9.17 $8.34 (14)% 1% 10%
-------------- ----- ------ ----- ----- ----- ---- --- ---
DD&A Expense ($/BOE) $30.18 $29.81 $30.65 $29.80 $29.62 1% (2)% 1%
-------------------- ------ ------ ------ ------ ------ --- --- ---
Gathering,
Transportation &
Marketing Expense
($/BOE) $2.19 $1.87 $2.15 $2.23 $1.89 17% 2% 18%
------------------ ----- ----- ----- ----- ----- --- --- ---
Total G&A Expense
($/BOE) $4.22 $3.86 $5.58 $4.44 $6.57 9% (24)% (32)%
----------------- ----- ----- ----- ----- ----- --- ---- ----
Non-cash Stock-
based Compensation
Expense ($/BOE) $1.37 $1.19 $1.97 $1.47 $2.12 15% (30)% (31)%
------------------- ----- ----- ----- ----- ----- --- ---- ----
Polar Pilot 2.0 Update
Downspacing work continues in the Company's Polar operating area. Subsequent to year end, Kodiak placed into production the first four well pad consisting of two Middle Bakken and two Three Forks wells spaced approximately 600-650 feet apart in each reservoir. The Company plans to test at least 16 wells within this 1,280-acre drilling spacing unit (DSU) with eight wells in the Middle Bakken and eight wells within the Three Forks. This four well pad is located immediately east of the initial 12 well pilot program which tested spacing of approximately 800-850 feet apart. The initial rates for the first four well pad are shown in the table below.
Well Name Formation IP 24-Hour 30 Day
Test Average
BOE/d BOE/d
--- ----- -----
P Wood
154-98-4-26-35-13H Middle Bakken 2,529 1,071
P Wood
154-98-4-26-35-13H3 Three Forks 2,439 835
P Wood
154-98-4-26-35-14H Middle Bakken 2,534 1,009
P Wood
154-98-4-26-35-14H3 Three Forks 2,325 750
Average 2,457 916
Q4-13 Results Teleconference Call
In conjunction with Kodiak's release of its financial and operating results, investors, analysts and other interested parties are invited to participate in a conference call with management on Friday, February 28, 2014 at 11:00 a.m. Eastern Standard Time.
Kodiak Oil & Gas Corp. 2013 Financial and Operating Results Conference Call
---------------------------------------------------------------------------
Date: February 28, 2014
----- -----------------
Time: 11:00 a.m. EST
----- --------------
10:00 a.m. CST
--------------
9:00 a.m. MST
-------------
8:00 a.m. PST
-------------
Call: (877) 870-4263 (US/Canada) and (412) 317-0790 (International)
----- -------------------------------------------------------------
Internet: Live and rebroadcast over the Internet: http://www.videonewswire.com/event.asp?id=98194
--------- ---------------------------------------------------------------------------------------
Replay: Available for 30 days at http://www.kodiakog.com or http://www.videonewswire.com/
event.asp?id=98194
------- ----------------------------------------------------------------------------------
Upcoming Investor Conferences
Kodiak also today announced management's participation in upcoming investor conferences. If a webcast is available, links can be found on the Company's website at www.kodiakog.com.
Conference City Date Time
---------- ---- ---- ----
Wells Fargo 5th Annual E&P
Forum Boston, MA Mar. 6, 2014 None
-------------------------- ---------- ------------ ----
Howard Weil Energy
Conference New Orleans, LA Mar. 25, 2014 12:35 PM EDT
------------------ --------------- ------------- ------------
IPAA OGIS Conference New York, NY Apr. 8, 2014 2:50 PM EDT
-------------------- ------------ ------------ -----------
Presentation times are subject to change at the discretion of the conference organizer. Please reference Kodiak's Presentations & Events page for further details regarding conferences and other events in which the Company may elect to participate.
About Kodiak Oil & Gas Corp.
Denver-based Kodiak Oil & Gas Corp. is an independent energy exploration and development company focused on exploring, developing and producing oil and natural gas primarily in the Williston Basin. For further information, please visit www.kodiakog.com. The Company's common shares are listed for trading on the New York Stock 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. Forward-looking statements in this document include statements regarding the Company's expectations as to its growth and development including trends in production and cash flow, the Company's expectations regarding potential improvements in LOE, the Company's downspacing program, improvements in per-well costs, and trends in the availability and cost of oil field services. 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 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.
For further information, please contact:
Mr. Lynn A. Peterson, CEO and President, Kodiak Oil & Gas Corp. +1-303-592-8075
Mr. Trevor P. Seelye, CFA, Director of Financial Planning & Investor Relations +1-720-399-3282
Footnotes to the Financial Statements
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 year-ended December 31, 2013.
KODIAK OIL & GAS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31,
2013
December 31, 2012
-----------------
ASSETS
------
Current Assets:
24,060
Cash and cash equivalents $90 $
Accounts receivable
Trade 108,883 35,565
Accrued sales revenues 121,843 59,875
Commodity price risk management asset - 10,864
Inventory and prepaid expenses 11,367 17,210
Deferred tax asset, net 14,300 -
------ ---
Total Current Assets 256,483 147,574
------- -------
Oil and gas properties (full cost method), at cost:
Proved oil and gas properties 3,556,667 2,007,442
Unproved oil and gas properties 641,644 457,888
Equipment and facilities 27,712 20,954
Less-accumulated depletion, depreciation, amortization,
and accretion (605,700) (290,094)
-------- --------
Net oil and gas properties 3,620,323 2,196,190
--------- ---------
Commodity price risk management asset 1,290 2,850
Property and equipment, net of accumulated depreciation of
$1,980 at December 31, 2013 and $1,113 at December 31,
2012 3,928 1,846
Deferred financing costs, net of amortization of $22,963 at
December 31, 2013 and $17,995 at December 31, 2012 41,746 25,176
------ ------
Total Assets $3,923,770 $ 2,373,636
========== === =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable and accrued liabilities $272,858 $ 190,596
Accrued interest payable 24,425 6,090
Commodity price risk management liability 20,334 304
------ ---
Total Current Liabilities 317,617 196,990
------- -------
Noncurrent Liabilities:
Credit facility 708,000 295,000
Senior notes, net of accumulated amortization of bond
premium of $1,024 at December 31, 2013 and $378 at
December 31, 2012 1,554,976 805,622
Commodity price risk management liability - 4,288
Deferred tax liability, net 133,700 26,800
Asset retirement obligations 16,405 9,064
------ -----
Total Noncurrent Liabilities 2,413,081 1,140,774
--------- ---------
Total Liabilities 2,730,698 1,337,764
--------- ---------
Stockholders' Equity:
Common stock-no par value; unlimited authorized
Issued and outstanding: 266,249,765 shares as of December
31, 2013 and 265,273,314 shares as of December 31, 2012 1,024,462 1,008,678
Retained earnings 168,610 27,194
------- ------
Total Stockholders' Equity 1,193,072 1,035,872
--------- ---------
Total Liabilities and Stockholders' Equity $3,923,770 $ 2,373,636
========== === =========
KODIAK OIL & GAS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
For the Years Ended December 31,
--------------------------------
2013
2012 2011
---- ----
Revenues:
$
Oil sales $858,242 $390,425 115,692
Gas sales 46,370 18,265 4,294
------ ------ -----
Total revenues 904,612 408,690 119,986
------- ------- -------
Operating expenses:
Oil and gas production 190,411 85,498 26,885
Depletion, depreciation,
amortization and accretion 317,223 155,634 32,068
General and administrative 47,224 34,528 19,495
------ ------ ------
Total operating expenses 554,858 275,660 78,448
------- ------- ------
Operating income 349,754 133,030 41,538
Other income (expense):
Gain (loss) on commodity price
risk management activities, net (45,028) 44,602 (20,114)
Interest income (expense), net (74,245) (22,911) (18,887)
Other income 3,535 3,663 1,338
----- ----- -----
Total other income (expense) (115,738) 25,354 (37,663)
-------- ------ -------
Income before income taxes 234,016 158,384 3,875
Income tax expense 92,600 26,800 -
------ ------ ---
Net income $141,416 $131,584 $3,875
======== ======== ======
Earnings per common share:
$
0.50
$
Basic $0.53 0.02
===== ====
Diluted $0.53 $0.49 $0.02
===== ===== =====
Weighted average common shares
outstanding:
Basic 265,650,733 263,531,408 197,579,298
=========== =========== ===========
Diluted 269,131,914 267,671,296 200,551,992
=========== =========== ===========
KODIAK OIL & GAS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Years Ended December 31,
--------------------------------
2013 2012 2011
---- ---- ----
Cash flows from operating activities:
Net income $141,416 $131,584 $3,875
Reconciliation of net income to net cash provided
by operating activities:
Depletion, depreciation, amortization and accretion 317,223 155,634 32,068
Amortization of deferred financing costs and debt
premium 4,322 2,588 15,029
(Gain) loss on commodity price risk management
activities, net 45,028 (44,602) 20,114
Settlements on commodity derivative instruments (16,862) 13,520 (3,897)
Stock?based compensation 15,665 11,156 5,200
Deferred income taxes 92,600 26,800 -
Changes in current assets and liabilities:
Accounts receivable?trade (73,318) (5,540) (17,507)
Accounts receivable?accrued sales revenue (61,968) (37,901) (17,396)
Prepaid expenses and other (1,961) 6,465 (2,082)
Accounts payable and accrued liabilities 73,122 9,350 13,075
Accrued interest payable 18,335 282 5,434
Cash held in escrow - 3,343 -
Net cash provided by operating activities 553,602 272,679 53,913
------- ------- ------
Cash flows from investing activities:
Oil and gas properties (1,018,537) (753,609) (232,360)
Acquired oil and gas properties and facilities (756,995) (588,420) (311,405)
Sale of oil and gas properties 85,448 2,752 3,264
Equipment, facilities and other (9,693) (10,176) (4,758)
Well equipment inventory (19,365) (28,625) (15,490)
Cash held in escrow - 30,000 (30,000)
--- ------ -------
Net cash used in investing activities (1,719,142) (1,348,078) (590,749)
---------- ---------- --------
Cash flows from financing activities:
Borrowings under credit facilities 1,264,875 380,000 350,808
Repayments under credit facilities (851,875) (185,000) (290,808)
Proceeds from the issuance of senior notes 750,000 156,000 650,000
Proceeds from the issuance of common shares 2,446 2,609 543,990
Purchase of common shares (2,327) - -
Cash held in escrow - 670,615 (673,958)
Debt and share issuance costs (21,549) (6,369) (62,790)
------- ------ -------
Net cash provided by financing activities 1,141,570 1,017,855 517,242
--------- --------- -------
Decrease in cash and cash equivalents (23,970) (57,544) (19,594)
Cash and cash equivalents at beginning of the
period 24,060 81,604 101,198
------ ------ -------
Cash and cash equivalents at end of the period $90 $24,060 $81,604
=== ======= =======
Supplemental cash flow information:
Oil & gas property accrual included in accounts
payable and accrued liabilities $162,950 $155,385 $52,541
======== ======== =======
Oil & gas property acquired through common stock $ - $49,798 $14,425
=== === ======= =======
Cash paid for interest $86,244 $66,095 $6,898
======= ======= ======
KODIAK OIL & GAS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
For the Three Months Ended December
31,
------------------------------------
2013 2012
---- ----
Revenues:
Oil sales $252,198 $124,423
Gas sales 14,294 6,423
------ -----
Total revenues 266,492 130,846
------- -------
Operating expenses:
Oil and gas production 57,757 28,048
Depletion, depreciation,
amortization and accretion 100,335 51,430
General and administrative 14,036 9,362
------ -----
Total operating expenses 172,128 88,840
------- ------
Operating income 94,364 42,006
Other income (expense):
Gain (loss) on commodity price
risk management activities, net 8,157 4,022
Interest income (expense), net (23,601) (8,353)
Other income 1,852 477
----- ---
Total other income (expense) (13,592) (3,854)
------- ------
Income before income taxes 80,772 38,152
Income tax expense 34,200 4,860
------ -----
Net income $46,572 $33,292
======= =======
Earnings per common share:
Basic $0.17 $0.13
===== =====
Diluted $0.17 $0.12
===== =====
Weighted average common shares
outstanding:
Basic 266,096,786 264,123,021
=========== ===========
Diluted 268,995,210 267,887,351
=========== ===========
KODIAK OIL & GAS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three Months Ended December
31,
------------------------------------
2013 2012
---- ----
Cash flows from operating activities:
Net income $46,572 $33,292
Reconciliation of net income to net cash provided
by operating activities:
Depletion, depreciation, amortization and accretion 100,335 51,430
Amortization of deferred financing costs and debt
premium 1,337 688
(Gain) loss on commodity price risk management
activities, net (8,157) (4,022)
Settlements on commodity derivative instruments (1,383) 9,328
Stock?based compensation 4,560 3,301
Deferred income taxes 34,200 4,860
Changes in current assets and liabilities: - -
Accounts receivable?trade (14,092) 4,550
Accounts receivable?accrued sales revenue (3,603) (11,787)
Prepaid expenses and other (802) (1,395)
Accounts payable and accrued liabilities 15,148 (5,063)
Accrued interest payable (6,048) (15,758)
Net cash provided by operating activities 168,067 69,424
------- ------
Cash flows from investing activities:
Oil and gas properties (250,723) (226,590)
Purchase and sale of oil and gas properties, net 108 -
Equipment, facilities and other (1,355) (2,016)
Well equipment inventory (2,186) 1,295
Cash held in escrow - -
--- ---
Net cash used in investing activities (254,156) (227,311)
-------- --------
Cash flows from financing activities:
Borrowings under credit facilities 70,000 180,000
Repayments under credit facilities - -
Proceeds from the issuance of senior notes - -
Proceeds from the issuance of common shares 163 739
Purchase of common shares (1,113) -
Debt and share issuance costs (1,189) (542)
----
Net cash provided by financing activities 67,861 180,197
------ -------
Increase (decrease) in cash and cash equivalents (18,228) 22,310
Cash and cash equivalents at beginning of the
period 18,318 1,750
------ -----
Cash and cash equivalents at end of the period $90 $24,060
=== =======
Supplemental cash flow information:
Oil & gas property accrual included in accounts
payable and accrued liabilities $162,950 $155,385
======== ========
Oil & gas property acquired through common stock $ - $ -
=== === === ===
Cash paid for interest $37,332 $33,741
======= =======
KODIAK OIL & GAS CORP.
RECONCILIATION OF ADJUSTED EBITDA
(In thousands)
(Unaudited)
For the Three Months Ended December
31,
------------------------------------
Reconciliation
of
Adjusted
EBITDA: 2013 2012
---- ----
Net income $46,572 $33,292
Add back:
Depreciation,
depletion,
amortization
and
accretion 100,335 51,430
Amortization
of
deferred
financing
costs and
debt
premium 1,337 688
(Gain) loss
on
commodity
price risk
management
activities,
net (8,157) (4,022)
Settlements
on
commodity
derivative
instruments (1,383) 9,328
Stock based
compensation
expense 4,560 3,301
Income tax
expense 34,200 4,860
Interest
expense 22,284 7,680
Adjusted
EBITDA $199,748 $106,557
======== ========
For the Years Ended December 31,
--------------------------------
Reconciliation of
Adjusted EBITDA: 2013 2012 2011
---- ---- ----
Net income $141,416 $131,584 $3,875
Add back:
Depreciation,
depletion,
amortization and
accretion 317,223 155,634 32,068
Amortization of
deferred financing
costs and debt
premium 4,322 2,588 15,029
(Gain) loss on
commodity price
risk management
activities, net 45,028 (44,602) 20,114
Settlements on
commodity
derivative
instruments (16,862) 13,520 (3,897)
Stock based
compensation
expense 15,665 11,156 5,200
Income tax expense
(benefit) 92,600 26,800 -
Interest expense 69,980 20,374 3,961
Adjusted EBITDA $669,372 $317,054 $76,350
======== ======== =======
In evaluating its business, Kodiak considers earnings before interest, income taxes, depletion, depreciation, amortization, and accretion, amortization of deferred financing costs and debt premium, impairment, gains or losses on foreign currency, the net (gain) loss on commodity price risk management activities less settlements on commodity derivative instruments, and stock?based compensation expense, ("Adjusted EBITDA") as a key indicator of financial operating performance and as a measure of the ability to generate cash for operational activities, future capital expenditures and an indication of our potential borrowing base under our credit facility. Adjusted EBITDA is not a Generally Accepted Accounting Principle ("GAAP") measure of performance. The Company uses this non-GAAP measure to compare its performance with other companies in the industry that make a similar disclosure, as a measure of its current liquidity, in developing our capital expenditure budget, to evaluate our compliance with covenants under our credit facility and as a component of the corporate objectives to which we tie the vesting of equity-based awards made to senior executives. The Company believes that this measure may also be useful to investors for the same purpose and for an indication of the Company's ability to generate cash flow at a level that can sustain or support our operations and capital investment program, and that disclosure of this measure provides investors with visibility as to the corporate objectives that affect our executive compensation program. Investors should not consider this measure, or other non-GAAP measures such as adjusted net income, in isolation or as a substitute for operating income or loss, cash flow from operations determined under GAAP or any other measure for determining the Company's operating performance that is calculated in accordance with GAAP. In addition, because Adjusted EBITDA is not a GAAP measure, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of Adjusted EBITDA and net income for the three and twelve months ended December 31, 2013, 2012 and 2011 is provided in the table above.
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SOURCE Kodiak Oil & Gas Corp.
