KOG » Topics » AND FOURTH QUARTER RESULTS

This excerpt taken from the KOG 8-K filed Mar 12, 2009.

AND FOURTH QUARTER RESULTS

 

DENVER, March 11, 2009 /PRNewswire-FirstCall/ — Kodiak Oil & Gas Corp. (NYSE Alternext US: KOG), an oil and gas exploration and production company with assets in the Green River Basin of southwest Wyoming and the Williston Basin of North Dakota and Montana, today reported financial and operating results for full-year and fourth quarter of 2008.

 

This excerpt taken from the KOG 8-K filed Nov 9, 2007.

Nine Months Results

The Company reported a net loss for the nine months ended September 30, 2007 of $36.9 million, or $0.42 per basic and diluted share, as compared to a net loss of $1.4 million, or $0.02 per basic and diluted share, for the same period in 2006Included in 2007 year to date earnings is a non-cash impairment of $34.0 million. Excluding the impairment, results for the nine months ended September 30, 2007 would have been a net loss of $2.9 million or $0.03 per share. Total revenues were approximately $7.0 million in the first nine months of 2007 versus $3.4 million in 2006.  Oil and gas sales were $5.6 million for the first nine months of 2007 versus $2.8 million in the same period in 2006.  The increase in oil and gas revenue was largely attributable to production volume increases, as gas sales volumes increased 61% and oil volumes increased 108%.

 

For the nine months ended September 30, 2007, Kodiak reported adjusted EBITDA of $2.1 million.  This compares to approximately $968,000 of adjusted EBITDA for the same period in 2006.  Net cash provided by operating activities for the nine-month period in 2007 was $617,000 as compared to $375,000 used in operating activities during the same period in 2006.

 



 

As of September 30, 2007, Kodiak had $19.4 million in cash and cash equivalents, $18.6 million of working capital and no long-term debt.

Impairment Charge
Kodiak adheres to the full cost method of accounting for its oil and gas properties, which requires a quarterly ceiling test to determine whether the net capitalized costs of its oil and gas properties exceed the present value of estimated future net revenues from proved reserves under Securities Exchange Commission (SEC) guidelines.  The SEC guidelines require the use of current prices and costs without consideration for forecasted price changes, expected operating efficiencies, or the development of unproved reserves.  Natural gas prices used in the ceiling test calculation at September 30, 2007 were $0.98 per Million British thermal units (MMBtu) for gas production in Wyoming, where the entire write-down occurred, and $5.63 per MMBtu for gas produced in North Dakota and Montana.  Crude oil prices were based on the West Texas Intermediate (WTI) posting of $78.25 less applicable differentials.  Under these parameters, the Company’s carrying value of its oil and gas properties exceeded the present value of estimated future revenues by $20.0 million, and an impairment expense for this amount was recorded for the quarter.  Also, in the nine-month period Kodiak recorded an impairment expense of $14.0 million at March 31, 2007.

Commenting on the impairment charge, Kodiak’s President and CEO, Lynn Peterson said: “The nine-month impairment charge of $34.0 million is generally attributed to the capital invested in the early-stage exploration of our Vermillion Basin deep gas play that to date has not yielded production in commercial quantities nor qualified reserves.  Of course, the continued low Rocky Mountain gas prices received also factored into the ceiling test calculation.   Kodiak continues to devote capital expenditures to the Vermillion Basin project and since inception has drilled only four deep Vermillion wells.  We continue to refine our geologic model while focusing on identifying optimal drilling and completion techniques because we firmly believe a large natural gas resource underlies our leasehold.  We are constantly looking to lower per-well investment in the basin by decreasing drilling days and identifying the best completion techniques available to tight-gas producers, which we believe, regional natural gas prices notwithstanding, help us as we work to establish production and reserves in the Vermillion deep play.”

 

EXCERPTS ON THIS PAGE:

8-K
Mar 12, 2009
8-K
Nov 9, 2007
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