KODIAK OIL & GAS CORP 
By DENVER, Oct. 31, 2013 /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 third quarter ended September 30, 2013. The Company previously furnished an operations update and reported sales volumes in a news release on October 22, 2013.
(Logo: http://photos.prnewswire.com/prnh/20131007/LA93138LOGO)
Financial Results
For the third quarter-ended September 30, 2013, the Company reported oil and gas sales of $299.6 million, as compared to $112.1 million during the same period in 2012 and $173.5 million in the second quarter 2013, representing increases of 167% and 73%, respectively. For the nine-month period ended September 30, 2013 Kodiak reported oil and gas sales of $638.1 million, as compared to $277.8 million for the same period in 2012. Kodiak reported an overall 54% increase in sequential equivalent sales volumes with 3.3 million barrels of oil equivalent (MMBOE) sold, or an average of 35,400 BOE per day (BOE/d) during the third quarter of 2013, as compared to 2.1 million BOE, or an average of 23,200 BOE/d in the second quarter of 2013. Crude oil revenue accounted for approximately 96% of oil and gas sales recorded during the third quarter 2013.
Adjusted EBITDA was $214.1 million for the third quarter 2013, as compared to $89.1 million in the same period in 2012. For the nine-month period ended September 30, 2013 Kodiak reported adjusted EBITDA of $469.6 million, as compared to $210.5 million in 2012. 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.
For the third quarter 2013, the Company reported net income of $31.2 million, or $0.12 per diluted share, compared to net income of $3.5 million, or $0.01 per diluted share, for the same period in 2012. Kodiak reported net income during the nine-month period ended September 30, 2013 of $94.8 million, as compared to $98.3 million for the same period in 2012.
Kodiak reported net cash provided by operating activities during the third quarter 2013 of $152.6 million, as compared to $89.2 million during the same period in 2012, an increase of 71%. Kodiak reported net cash provided by operating activities during the nine-month period ended September 30, 2013 of $385.5 million, as compared to $203.3 million for the same period in 2012.
General and administrative expenses (G&A) for the third quarter 2013 totaled $12.6 million, or $3.86 per BOE, compared to $9.1 million, or $6.26 per BOE, in the third quarter 2012. The increase in total G&A expense for the third quarter 2013, as compared to the same period in 2012, is attributed primarily to the hiring of new personnel as the Company continues to expand its oil and gas operations. G&A expense on a per unit basis improved sequentially from $4.89 per BOE in the second quarter of 2013 to $3.86 per BOE in the third quarter primarily attributable to increased production. As of September 30, 2013, Kodiak had 172 employees, as compared to 104 employees as of September 30, 2012.
Lease operating expenses (LOE) for the third quarter 2013 totaled $20.4 million or $6.28 per BOE, a 9% increase per BOE over the third quarter 2012 and a decrease of 1% over the second quarter of 2013. 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 which helps to reduce the Company's dependence on third-party services and minimize trucking requirements.
During the third quarter ended September 30, 2013, Kodiak recognized total interest expense related to its outstanding senior notes and credit facility of approximately $21.0 million. The Company capitalized interest costs of $9.7 million for the third quarter 2013.
The following table summarizes the Company's costs on a per-unit basis for the periods shown:
Kodiak Oil
& Gas
Corp. % Change
Unit Cost
Analysis Q3-13 Q2-13 Q3-12 Sequential Q-o-Q
--------- ----- ----- ----- ---------- -----
Sales
Volumes
in
Barrels
of Oil
Equivalent
(MBOE) 3,257 2,112 1,459 54% 123%
----- ----- -----
Average
Price
Received
Oil
($/Bbl) $98.19 $88.88 $82.96 10% 18%
--------- ------ ------ ------ --- ---
Average
Price
Received
Gas
($/Mcf) 6.32 6.16 5.20 3% 22%
--------- ---- ---- ---- --- ---
Average
Price
Received
BOE
($/BOE) $91.97 $82.15 $76.88 12% 20%
--------- ------ ------ ------ --- ---
Expenses
--------
Lease
Operating
Expense
($/BOE) $6.28 $6.33 $5.77 (1)% 9%
---------- ----- ----- ----- --- ---
Production
Tax
($/BOE) 10.00 8.77 8.19 14% 22%
---------- ----- ---- ---- --- ---
DD&A
Expense
($/BOE) 29.81 29.56 29.97 1% (1)%
-------- ----- ----- ----- --- ---
Gathering,
Transportation
&
Marketing
Expense
($/BOE) 1.87 2.67 1.77 (30)% 6%
--------------- ---- ---- ---- ---- ---
Total G&A
Expense
($/BOE) 3.86 4.89 6.26 (21)% (38)%
--------- ---- ---- ---- ---- ----
Non-cash
Stock-
based
Compensation
Expense
($/BOE) $1.19 $1.66 $1.90 (28)% (37)%
------------- ----- ----- ----- ---- ----
2013 Capital Expenditures
Year to date, Kodiak has invested approximately $809.8 million related to its oilfield operations and leasehold acquisitions compared to its full year capital expenditure guidance of approximately $1 billion. The Company expects its fourth quarter capital spend to be less than that of the third quarter due to lower well costs on a quarter over quarter basis and fewer net wells completed in the fourth quarter as compared to the third quarter. This is mainly attributable to one less non-operated rig drilling in Dunn County and lower working interest spacing units being drilled in the fourth quarter.
Nine Full
Months Year
Kodiak Quarter
Oil & Ended
Gas
Corp. Ended 2013
-------- -----
Capital Sept June Sept
Expenditures 30, 30, 30,
($MM) 2013 2013 2013 Budget
------------- ----- ----- ----- ------
Drilling
and
completion
costs $302.0 $239.4 $790.4 $965.0
Salt
water
disposal
wells
and
facilities 0.3 7.6 13.1 23.0
Leasehold
acquisitions 2.7 1.7 6.3 12.0
--- ---
Total
Capital
Expenditures $305.0 $248.7 $809.8 $1,000.0
------------- ---- ---- ------ ------
Asset
retirement
obligations $2.6 $1.1 $4.2
Capitalized
interest 9.7 7.4 25.6
--- ---
Total
Capitalized
Costs $317.3 $257.2 $839.6
------------ ---- ---- ------
Q3-13 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, November 1, 2013 at 11:00 a.m. Eastern Daylight Time.
Kodiak Oil & Gas Corp. Q3-13 Financial and Operating Results Conference Call
----------------------------------------------------------------------------
Date: November 1, 2013
----- ----------------
Time: 11:00 a.m. EDT
----- --------------
10:00 a.m. CDT
--------------
9:00 a.m. MDT
-------------
8:00 a.m. PDT
-------------
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=96331
--------- ---------------------------------------------------------------------------------------
Replay: Available for 30 days at http://www.kodiakog.com or http://www.videonewswire.com/
event.asp?id=96331
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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
---------- ---- ---- ----
Jefferies Global Energy Houston, TX Nov. 12,
Conference 2013 2:00 PM ET
----------------------- ----------- --------- ----------
Stephens Fall Investment New York, NY Nov. 12,
Conference 2013 11:00 AM ET
------------------------ ------------ --------- -----------
UBS Mini Energy Conference Boston, MA Nov. 13,
2013 None
-------------------------- ---------- --------- ----
Goldman Sachs Emerging New York, NY Nov. 14,
Growth Conference 2013 9:20 AM ET
---------------------- ------------ --------- ----------
Deutsche Bank's SMID One on Coral Gables, FL Nov. 20,
One Conference 2013 None
--------------------------- ---------------- --------- ----
Bank of America Merrill Nov. 22,
Lynch Global Energy 2013
Conference Miami, FL 8:15 AM ET
----------------------- --------- --------- ----------
Wells Fargo Energy New York, NY Dec. 11,
Symposium 2013 TBD
------------------ ------------ --------- ---
Capital One Southcoast New Orleans, LA Dec. 12,
Energy Conference 2013 10:00 AM ET
---------------------- --------------- --------- -----------
Presentation times and webcasting 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 in the U.S. Rocky Mountains. 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, cash flow and reserves, the Company's expectations regarding potential improvements in LOE, the Company's drilling and completion program, including timing and 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 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.
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-Q for the quarter-ended September 30, 2013.
KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
September 30, December 31,
2013 2012
------------- -------------
ASSETS
------
Current Assets:
Cash and cash
equivalents $18,318 $24,060
Accounts receivable
Trade 94,791 35,565
Accrued sales
revenues 118,240 59,875
Commodity price risk
management asset - 10,864
Inventory, prepaid
expenses and other 13,906 17,210
------ ------
Total Current Assets 245,255 147,574
------- -------
Oil and gas
properties (full
cost method), at
cost:
Proved oil and gas
properties 3,284,226 2,007,442
Unproved oil and gas
properties 692,380 457,888
Equipment and
facilities 27,580 20,954
Less-accumulated
depletion,
depreciation,
amortization, and
accretion (505,758) (290,094)
-------- --------
Net oil and gas
properties 3,498,428 2,196,190
--------- ---------
Commodity price risk
management asset 1,475 2,850
Property and
equipment, net of
accumulated
depreciation of
$1,687 at September
30, 2013 and $1,113
at December 31, 2012 3,085 1,846
Deferred financing
costs, net of
amortization of
$21,461 at September
30, 2013 and $17,995
at December 31, 2012 42,071 25,176
------ ------
Total Assets $3,790,314 $2,373,636
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
--------------------
Current Liabilities:
Accounts payable and
accrued liabilities $294,623 $190,596
Accrued interest
payable 30,473 6,090
Commodity price risk
management liability 29,005 304
------ ---
Total Current
Liabilities 354,101 196,990
------- -------
Noncurrent
Liabilities:
Credit facility 638,000 295,000
Senior notes, net of
accumulated
amortization of bond
premium of $858 at
September 30, 2013
and $378 at December
31, 2012 1,555,142 805,622
Commodity price risk
management liability 1,054 4,288
Deferred tax
liability, net 85,200 26,800
Asset retirement
obligations 13,927 9,064
------ -----
Total Noncurrent
Liabilities 2,293,323 1,140,774
--------- ---------
Total Liabilities 2,647,424 1,337,764
--------- ---------
Stockholders' Equity:
Common stock-no par
value; unlimited
authorized
Issued and
outstanding:
266,026,558 shares
as of September 30,
2013 and 265,273,314
shares as of
December 31, 2012 1,020,852 1,008,678
Retained earnings 122,038 27,194
------- ------
Total Stockholders'
Equity 1,142,890 1,035,872
--------- ---------
Total Liabilities and
Stockholders' Equity $3,790,314 $2,373,636
========== ==========
KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
2013 2012 2013 2012
---- ---- ---- ----
Revenues:
Oil sales $286,832 $106,798 $606,044 $266,002
Gas sales 12,760 5,342 32,076 11,842
------ ----- ------ ------
Total revenues 299,592 112,140 638,120 277,844
------- ------- ------- -------
Operating
expenses:
Oil and gas
production 59,132 22,950 132,654 57,450
Depletion,
depreciation,
amortization
and accretion 97,094 43,720 216,888 104,204
General and
administrative 12,560 9,126 33,188 25,166
------ ----- ------ ------
Total
operating
expenses 168,786 75,796 382,730 186,820
------- ------ ------- -------
Operating
income 130,806 36,344 255,390 91,024
Other income
(expense):
Gain (loss) on
commodity
price risk
management
activities,
net (60,108) (31,652) (53,185) 40,580
Interest
income
(expense),
net (21,049) (6,390) (50,644) (14,558)
Other income 1,001 1,194 1,683 3,186
----- ----- ----- -----
Total other
income
(expense) (80,156) (36,848) (102,146) 29,208
------- ------- -------- ------
Income (loss)
before income
taxes 50,650 (504) 153,244 120,232
Income tax
expense
(benefit) 19,500 (3,980) 58,400 21,940
------ ------ ------ ------
Net income $31,150 $3,476 $94,844 $98,292
======= ====== ======= =======
Earnings per
common share:
Basic $0.12 $0.01 $0.36 $0.37
===== ===== ===== =====
Diluted $0.12 $0.01 $0.35 $0.37
===== ===== ===== =====
Weighted
average
common shares
outstanding:
Basic 265,733,881 263,756,896 265,500,414 263,332,764
=========== =========== =========== ===========
Diluted 268,566,065 267,403,802 267,992,098 267,532,393
=========== =========== =========== ===========
KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three For the Nine Months
Months Ended Ended September
September 30, 30,
-------------- -------------------
2013 2012 2013 2012
---- ---- ---- ----
Cash flows from operating
activities:
Net income $31,150 $3,476 $94,844 $98,292
Reconciliation of net income to
net cash provided by operating
activities:
Depletion,
depreciation,
amortization and
accretion 97,094 43,720 216,888 104,204
Amortization of
deferred financing
costs and debt premium 1,239 643 2,985 1,900
(Gain) loss on
commodity price risk
management activities,
net 60,108 31,652 53,185 (40,580)
Settlements on
commodity derivative
instruments (18,674) 5,044 (15,479) 4,192
Stock?based
compensation 3,880 2,765 11,105 7,855
Deferred income taxes 19,500 (3,980) 58,400 21,940
Changes in current assets and
liabilities:
Accounts
receivable?trade (57,072) (10,671) (59,226) (10,090)
Accounts
receivable?accrued
sales revenue (51,330) (9,118) (58,365) (26,114)
Prepaid expenses and
other (973) 5,776 (1,159) 7,860
Accounts payable and
accrued liabilities 51,906 3,403 57,974 14,413
Accrued interest
payable 15,803 16,520 24,383 16,040
Cash held in escrow - - - 3,343
--- --- --- -----
Net cash provided by
operating activities 152,631 89,230 385,535 203,255
------- ------ ------- -------
Cash flows from investing
activities:
Acquired oil and gas
properties and
facilities (759,025) - (759,025) (588,420)
Oil and gas properties (247,502) (194,446) (767,814) (527,019)
Sale of oil and gas
properties 87,370 2,752 87,370 2,752
Equipment, facilities
and other (1,318) (1,386) (8,338) (8,160)
Well equipment
inventory (14,881) (22,344) (17,179) (29,920)
Cash held in escrow 51,000 - - 30,000
------ --- --- ------
Net cash used in
investing activities (884,356) (215,424) (1,464,986) (1,120,767)
-------- -------- --------- ---------
Cash flows from financing
activities:
Borrowings under credit
facility 840,000 115,000 1,194,875 200,000
Repayments under credit
facility (493,000) - (851,875) (185,000)
Proceeds from the
issuance of senior
notes 400,000 - 750,000 156,000
Proceeds from the
issuance of common
shares 1,793 625 2,283 1,870
Purchase of common
shares (696) - (1,214) -
Cash held in escrow - - - 670,615
Debt and share issuance
costs (12,126) (1,177) (20,360) (5,827)
------- ------ ------- ------
Net cash provided by
financing activities 735,971 114,448 1,073,709 837,658
------- ------- --------- -------
Increase (decrease) in
cash and cash
equivalents 4,246 (11,746) (5,742) (79,854)
-
Cash and cash
equivalents at
beginning of the
period 14,072 13,496 24,060 81,604
------ ------ ------ ------
Cash and cash
equivalents at end of
the period $18,318 $1,750 $18,318 $1,750
======= ====== ======= ======
Supplemental cash flow
information:
Oil & gas property
included in accounts
payable and accrued
liabilities $201,438 $124,155 $201,438 $124,155
======== ======== ======== ========
Oil & gas property
acquired through
common stock - - - $49,798
=== === === =======
Cash paid for interest $13,722 $434 $48,912 $32,354
======= ==== ======= =======
KODIAK OIL & GAS CORP.
RECONCILIATION OF ADJUSTED EBITDA
(In thousands)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
-------------- -------------
Reconciliation of Adjusted EBITDA: 2013 2012 2013 2012
---- ---- ---- ----
Net income $31,150 $3,476 $94,844 $98,292
Add back:
Depreciation, depletion, amortization and accretion 97,094 43,720 216,888 104,204
Amortization of deferred financing costs and debt premium 1,239 643 2,985 1,900
(Gain) loss on commodity price risk management activities, net 60,108 31,652 53,185 (40,580)
Settlements on commodity derivative instruments (18,674) 5,044 (15,479) 4,192
Stock based compensation expense 3,880 2,765 11,105 7,855
Income tax expense (benefit) 19,500 (3,980) 58,400 21,940
Interest expense 19,824 5,755 47,696 12,693
Adjusted EBITDA $214,121 $89,075 $469,624 $210,496
====== ===== ====== ======
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 nine months ended September 30, 2013 and 2012 is provided in the table above.
SOURCE Kodiak Oil & Gas Corp.
