Kodiak Oil & Gas Corp. Announces 2013 Financial & Operational Results

Highlights Include:

- 2013 Oil & Gas Sales of $905 million, 121% Increase from 2012

- Q4-13 Oil & Gas Sales of $266 million, 104% Increase from Q4-12

- 2013 Adjusted EBITDA of $669 million, 111% Growth from 2012

- Q4-13 Adjusted EBITDA of $200 million, 87% Growth from Q4-12

27 Feb, 2014, 16:05 ET from Kodiak Oil & Gas Corp.

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. 

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

Test

BOE/d

30 Day

Average

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:

Cash and cash equivalents

$

90

$

24,060

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:

Basic

$

0.53

$

0.50

$

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.



RELATED LINKS

http://www.kodiakog.com