Kodiak Oil & Gas Corp. Announces 2013 Financial & Operational Results - ABC 33/40 - Birmingham News, Weather, Sports

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

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SOURCE Kodiak Oil & Gas Corp.

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

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. 

Kodiak Oil & Gas Corp.

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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