Kodiak Oil & Gas Corp. Reports Fourth Quarter and Full-Year 2007 Results



    DENVER, March 13 /CNW/ -- Kodiak Oil & Gas Corp. (Amex:   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 the fourth quarter 2007 and
full-year 2007.
    
    2007 Financial Results
    
    The Company reported a net loss for the year ended December 31, 2007 of
$38.2 million, or $0.44 per basic and diluted share, compared with a net loss
of $2.8 million, or $0.04 per basic and diluted share, for the same period in
2006.  The 2007 net loss includes $34 million in non-cash charges related to
an impairment of the carrying value of oil and gas properties.  Net loss
before the impairment charge for 2007, a non-GAAP measure, is $4.2 million, or
$0.05 per share.  No impairment charges were recorded in 2006.
    Total revenues were a Company-record $9.3 million for the 2007 period
versus approximately $5.0 million for the full-year 2006.  Oil and gas sales
increased 88% to approximately $7.8 million for the full-year 2007 on a 67%
increase in year-over-year production volumes.  Crude oil revenue accounted
for approximately 86% of total 2007 oil and gas sales.
    Adjusted EBITDA was $2.7 million for the full-year 2007, as compared to
$947,000 for the same period in 2006.  Kodiak defines Adjusted EBITDA as net
income before interest, taxes, depreciation, depletion, amortization and
accretion, non-cash stock-based compensation expense, impairment charges and
gains or losses on foreign currency exchange.
    Reconciliations of Adjusted EBITDA, a non-GAAP measure, to net loss are
included in this news release and in the Company's filing on Form 10-K.
Additional disclosure regarding the Company's use of Adjusted EBITDA are also
included in the Company's filing on Form 10-K.
    Kodiak posted operating cash flow of $2.1 million as compared to
operating cash flow in 2006 of $3.1 million.
    Total assets were $74.3 million at year-end 2007, as compared to $113.8
million in the same period in 2006.  The decrease in total assets is primarily
attributed to the above-mentioned impairment charge.  Stockholders' equity was
$68.3 million at December 31, 2007, as compared to $103.6 million at year-end
2006. The Company's cash and cash equivalents position at year-end is $13.0
million, and it currently has no long-term debt.
    General and administrative (G&A) expense increased to $7.3 million for
the year-ended December 31, 2007, from $4.6 million for the same period in
2006. Included in the G&A expense for 2007 is a stock-based compensation
charge of $2.5 million for options issued to officers, directors and
employees, as compared to $1.5 million for the same period in 2006.
    
    Oil and Gas Sales
    
    Kodiak increased year-over-year sales by 67% to a Company-record 136,279
barrels of oil equivalent (BOE) as compared to 81,520 BOE in 2006.  For the
year, Kodiak grew natural gas sales by 71% to 200.2 million cubic feet (MMcf),
as compared to 117.3 MMcf for last year.  Oil sales volumes were up 66% to
102,914 barrels for 2007, as compared to 61,966 barrels in 2006.  By
commodity, crude oil constitutes 75% of the production base.
    For 2007, the average gas price received decreased to $5.26 per thousand
cubic feet of natural gas (Mcf), as compared to the $5.56 per Mcf received in
2006.  Kodiak enjoyed an 18% uplift in the average price received for crude
oil in 2007.  The Company sold its oil for $65.72 per barrel for the year, as
compared to the $55.52 per barrel received during 2006.  Kodiak currently does
not hedge any of its oil and gas production volumes.
    During 2007, Kodiak invested $45.1 million for exploration and
development of its leasehold, including $5.8 million for acreage acquisition
and seismic. In 2007, Wyoming capital investment was $36.5 million, and $8.6
million was allocated for Williston Basin oil and gas activities.  The Company
drilled 12 gross wells (6.4 net) in 2007.  Of these, five gross wells (3.8
net) have been completed, five (2.3 net) were dry holes and two (0.25 net)
wells, which are non-operated, remained in progress at December 31, 2007.  The
Company now has working interests in 23 gross (14.7 net) wells, of which 16
gross (11.2 net) are Kodiak-operated wells.  As of December 31, 2007, Kodiak
owned or controlled approximately 152,430 gross and 98,162 net acres primarily
in its core operating areas of the Green River and Williston Basins. 
Subsequent to the Devon Energy Corp. Agreement, (the Devon Agreement)
announced on January 31, 2008, the Company currently owns or controls
approximately 89,762 net acres in its core operating areas.
    
    Fourth Quarter 2007
    
    The Company reported a net loss for the three months ended December 31,
2007 of $1.3 million, or $0.02 per share, compared with a net loss of $1.4
million, or $0.02 per share, for the same period in 2006.  Adjusted EBITDA for
the fourth quarter 2007 was $599,000 as compared to $21,000 for the same
period in 2006.
    Oil and gas sales for the fourth quarter were $2.2 million versus $1.3
million in the same period in 2006. Total revenues were $2.3 million versus
$1.6 million in the year-ago period.  For the fourth quarter 2007, Kodiak
posted operating cash flow of $1.4 million as compared to $3.5 million in the
same period in 2006.
    Kodiak increased quarter-over-quarter oil and gas sales by 11% to 31,427
BOE from 28,283 BOE in the same period in 2006.  Oil comprised 74% of the
equivalent quarterly production.  The average oil price received was $80.43
per barrel, as compared to the $55.52 per barrel received during the fourth
quarter 2006.  For the fourth quarter 2007, the average natural gas price
received was $6.15 per Mcf, as compared to $4.55 per Mcf received in 2006.
    During the quarter, Kodiak invested $7.8 million for exploration and
development of its leasehold, primarily on the completions of two wells in the
Vermillion Basin.
    
    Proved Reserves Growth of 48%
    
    Kodiak's year-end, estimated total proved reserves were approximately 8.3
billion cubic feet of natural gas equivalent (Bcfe), or 1.4 million barrels of
oil equivalent (MMBoe).  This compares to 5.6 Bcfe, or .933 MMBoe in 2006. The
2007 total, a 48% increase on an equivalent basis over 2006, is comprised of
2.7 Bcf of natural gas and 932,031 barrels of crude oil.  The current reserve
mix is 67% crude oil and 33% natural gas.  Approximately 75% of total reserves
are categorized as proved developed and 25% were proved undeveloped. Average
year-end prices used to determine reserves were $6.97 per Mcf of natural gas
and $81.30 per barrel of oil for 2007, versus $4.53 per Mcf and $50.37 per
barrel in 2006.
    For 2007 reserve quantities, Kodiak's standardized measure of discounted
future net cash flows (commonly known as the SEC PV-10 figure) for proved
reserves at year end was $36.2 million, as compared to $19.6 million in 2006.
    
    Williston Basin-Montana and North Dakota
    Bakken Projects
    
    In addition to its existing activity in McKenzie County, Kodiak continues
to add to its leasehold position in Dunn County, North Dakota where the
primary objective is the dolomitic, sandy interval sandwiched between the two
Bakken shales at an approximate vertical depth of 10,000 feet.  As of December
31, 2007, Kodiak had acquired 29,487 gross acres and 18,089 net acres on the
Fort Berthold Indian Reservation.  Subsequent to year-end 2007, additional
acreage has been leased or is in the approval process with the Bureau of
Indian Affairs (BIA).  Management expects leasehold in this area to exceed
30,000 net acres, if all leases that have been executed by the landowners are
approved by the BIA.
    Locations on the southern portion of our leasehold are currently being
permitted.  Subject to obtaining a permit to drill from the Bureau of Land
Management and the BIA, drilling activity should commence in this area in late
second quarter of 2008.  Further to the northwest, Kodiak, along with its
industry partner, have begun the drill site selection process and permitting
will follow.  Subject to permits, drilling is anticipated in the second half
of 2008.
    Commenting on Williston Basin activities, Kodiak's President and CEO Lynn
Peterson said: "We are very motivated internally to begin drilling our 2008
horizontal Bakken program.  Our staff is actively working on additional
leasehold acquisition and permits while continuing to refine the geologic
model to identify a strong inventory of what we firmly believe will become
development drilling locations.  We have spent the past two years diligently
working on this play concept and are nearing the drilling phase.  Given the
increased Bakken production and drilling activity by industry in our immediate
area, we feel confident that our leasehold is highly prospective."
    
    Vermillion Basin-Wyoming
    
    In 2007, Kodiak completed the Horseshoe Basin Unit #5-3 well, located on
the western edge of the prospective producing area.  The well, a six-mile step
out from current production, is currently waiting on the completion of a
gathering pipeline which is permitted and expected to be in place by
mid-summer 2008.  Kodiak's 2008 Vermillion Basin exploration efforts will be
largely driven and funded under the terms of the previously announced Devon
Agreement.  The Company controls approximately 40,000 gross (16,778 net) acres
in this basin.
    Commenting on the Vermillion Basin activities, Peterson said:  "We are
encouraged by the HB Unit #5-3 well results and are pleased to have Devon
Energy as our partner.  Initial activity is expected to be an offset to the HB
Unit #5-3 well during the summer of 2008.  While drilling plans are still
being finalized, we expect this will be a vertical well and will evaluate the
Baxter shale.  We anticipate acquiring 3-D seismic to best identify future
Horseshoe Basin Unit drilling locations.  In addition, further exploration
drilling is planned for the northern portion of our leasehold."
    
    2008 Capital Expenditure Budget
    
    The Company also announced the approval by its Board of Directors of an
initial capital expenditure budget (CAPEX) of $12.6 million for its 2008
drilling program.  In the Williston Basin, approximately $11.3 million is
allocated to drilling, completion, related infrastructure and acreage and
seismic acquisition, $9.6 million of which will be invested in the Bakken
shale play in Dunn County, N.D.  The Wyoming program contemplates $1.2 million
of investment in 2008.
    The 2008 initial CAPEX may be revised and is subject to rig availability,
access to oilfield services, drilling results, operational developments,
market conditions, commodity prices and industry partner timing on
non-operated wells.
    Commenting on the 2008 CAPEX, Peterson said: "Our announced CAPEX is
lower than 2007, but we expect to maintain a similar level of activity in
2008.  The Devon Agreement allows for continued drilling in the Vermillion
Basin, while Kodiak can allocate the majority of its drilling budget to the
emerging Bakken oil play in the Williston Basin.  We expect to fund the budget
through current working capital, cash flow from operations and through
anticipated joint venture arrangements."
    Teleconference Call

    In conjunction with today's financial and operating results, investors,
analysts and other interested parties are invited to listen to a conference
call with management on Friday, March 14, 2008 at 11:00 a.m. Eastern Daylight
Time.

    Date:      Friday, March 14, 2008

    
     Time:      11:00 a.m. EDT
                10:00 a.m. CDT
                9:00 a.m. MDT
                8:00 a.m. PDT
    

    
     Call:      (877) 257-3168 (US/Canada) and (706) 643-3820 (International)
                Passcode 38153500
    

    
     Internet:  Live and rebroadcast over the Internet
                http://www.videonewswire.com/event.asp?id=46545
                or at: http://www.kodiakog.com
    

    
     Replay:    Available through Wednesday, March 19, 2008 at (800) 642-1687
                (US/Canada) and (706) 645-9291 (International) using passcode
                38153500 and for 30 days at http://www.kodiakog.com
    About Kodiak Oil & Gas Corp.
    
    Kodiak Oil & Gas, Denver-based, is an independent energy exploration and
development company focused on exploring, developing and producing oil and
natural gas in the Williston and Green River Basins in the U.S. Rocky
Mountains. For further information, please visit http://www.kodiakog.com.  The
Company's common shares are listed for trading on the American Stock Exchange
"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 exploration, drilling and development plans, the Company's
expectations regarding the timing and success of such programs, the Company's
expectations regarding the timing and amount of future revenues and the
Company's expectations regarding the future production of its oil & gas
properties. 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.



    
                            KODIAK OIL & GAS CORP.
                         CONSOLIDATED BALANCE SHEETS
    

    
                                                 December 31,     December 31,
                                                     2007             2006
                      ASSETS
    Current Assets:
      Cash and cash equivalents                  $13,015,318      $58,469,263
      Accounts receivable
        Trade                                      1,373,843        1,877,185
        Accrued sales revenues                       789,652          666,990
      Prepaid expenses and other                     198,996          103,707
          Total Current Assets                    15,377,809       61,117,145
    Property and equipment (full cost method),
     at cost:
      Proved oil and gas properties               77,272,437       27,167,338
      Unproved oil and gas properties             21,904,737       19,607,474
      Wells in progress                              414,074        7,700,415
      Less-accumulated depletion, depreciation,
       amortization, accretion, and asset
       impairment                                (41,204,821)      (2,224,962)
      Net oil and gas properties                  58,386,427       52,250,265
    Other property and equipment, net of
     accumulated  depreciation of $176,458 in
     2007 and of $102,231 in 2006                    312,017          181,752
    Restricted investments                           255,068          224,452
    

    Total Assets                                 $74,331,321     $113,773,614

    
        LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
      Accounts payable and accrued liabilities    $5,163,457       $9,879,104
    Noncurrent Liabilities:
      Asset retirement obligation                    874,498          249,695
        Total Liabilities                          6,037,955       10,128,799
    

    
    Commitments and Contingencies
    Stockholders' Equity:
      Common stock, no par value; unlimited
       authorized
      Paid-in capital                            114,215,604      111,384,998
      Accumulated deficit                        (46,801,557)      (8,615,667)
        Total Stockholders' Equity                68,293,366      103,644,815
    

    
    Total Liabilities and Stockholders' Equity   $74,331,321     $113,773,614
    
    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 dated March 13, 2008.



    
                            KODIAK OIL & GAS CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
    

    
                                           For the Years Ended December 31,
                                          2007          2006           2005
    Revenues:
      Gas production                  $1,053,331      $718,926       $225,524
      Oil production                   6,764,017     3,440,182        140,056
      Interest                         1,503,029       806,061         87,555
        Total revenue                  9,320,377     4,965,169        453,135
    

    
    Cost and expenses:
      Oil and gas production           1,757,717       964,685        201,885
      Depletion, depreciation,
       amortization and accretion      5,206,631     2,173,918        157,868
      Asset impairment                34,000,000             -              -
      General and administrative       7,334,386     4,580,598      2,002,609
      (Gain)/loss on currency exchange  (792,467)       32,008         95,864
        Total costs and expenses      47,506,267     7,751,209      2,458,226
    

    Net loss                        $(38,185,890)  $(2,786,040)  
$(2,005,091)

    
    Basic & diluted weighted-average
     common shares outstanding        87,742,996    71,425,243     44,447,269
    

    
    Basic & diluted net loss per
     common share                         $(0.44)       $(0.04)        $(0.05)
    
    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 dated March 13, 2008.



    
                            KODIAK OIL & GAS CORP.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
    

    
                                        For the Years Ended December 31,
                                       2007           2006           2005
    Cash flows from operating
     activities:
      Net loss                    $(38,185,890)   $(2,786,040)   $(2,005,091)
    Reconciliation of net loss to
     net cash provided by (used in)
     operating activities:
      Depletion, depreciation,
       amortization and accretion    5,206,631      2,173,918        157,868
      Asset impairment              34,000,000              -              -
      Asset retirement                 (29,893)             -              -
      Stock-based compensation       2,452,291      1,527,361        541,111
    Changes in current assets
     and liabilities:
      Accounts receivable-trade        503,342     (1,429,204)      (424,322)
      Accounts receivable-accrued
       sales revenues                 (122,661)      (440,585)      (227,500)
      Prepaid expenses and other       (95,289)       (73,076)           785
      Accounts payable and accrued
       liabilities                  (1,655,119)     4,168,775        735,928
    Net cash provided by (used in)
     operating activities            2,073,412      3,141,149     (1,221,221)
    

    
    Cash flows from investing
     activities:
      Oil and gas properties       (47,649,681)   (35,426,830)   (11,853,969)
      Equipment                       (229,210)       (52,976)      (124,196)
      Restricted investment:
       designated as restricted        (30,616)       (82,052)      (153,000)
      Restricted investment:
       undesignated as restricted            -         10,600              -
    

    
    Net cash (used in) investing
     activities                    (47,909,507)   (35,551,258)   (12,131,165)
    

    
    Cash flows from financing
     activity:
      Proceeds from the issuance
       of shares                       382,150     89,940,060     18,227,543
      Stock issuance costs                   -     (6,346,236)      (292,370)
    

    
    Net cash provided by financing
     activities                        382,150     83,593,824     17,935,173
    

    
    Net change in cash and cash
     equivalents                   (45,453,945)    51,183,715      4,582,787
    Cash and cash equivalents at
     beginning of the period        58,469,263      7,285,548      2,702,761
    

    
    Cash and cash equivalents at
     end of the period             $13,015,318    $58,469,263     $7,285,548
    
    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 dated March 13, 2008.



    
                            KODIAK OIL & GAS CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)
    

    
                                               Three months ended December 31,
                                                    2007             2006
    Revenues:
      Gas production                              $302,741         $160,157
      Oil production                             1,867,940        1,187,683
      Interest                                     179,041          206,777
        Total revenue                            2,349,722        1,554,616
    

    
    Cost and expenses:
      Oil and gas production                       560,077          421,003
      Depletion, depreciation, amortization
       and accretion                             1,144,234          799,900
      General and administrative                 1,953,838        1,310,064
      (Gain) on currency exchange                  (11,491)         406,778
    

    Total costs and expenses                 3,646,658        2,937,744

    Net loss                                   $(1,296,936)     $(1,383,128)

    
    Basic & diluted weighted-average common
     shares outstanding                         87,992,926       76,526,665
    

    
    Basic & diluted net loss per common share       $(0.02)          $(0.02)
    Use of Non-GAAP Financial Matters
    
    In evaluating its business, Kodiak considers earnings before interest,
taxes, depreciation, depletion, amortization, gain on foreign currency and
stock-based compensation ("Adjusted EBITDA") as a key indicator of financial
operating performance and as a measure of the ability to generate cash for
operational activities and future capital expenditures.  Adjusted EBITDA is
not a Generally Accepted Accounting Principle ("GAAP") measure of performance.
The Company uses this non-GAAP measure primarily to compare its performance
with other companies in the industry that make a similar disclosure and as a
measure of its current liquidity.  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.  Investors should not consider
this measure 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 EBITDA is not a GAAP measure, it
may not necessarily be comparable to similarly titled measures employed by
other companies.

    
                            KODIAK OIL & GAS CORP.
                      Reconciliation of Adjusted EBITDA
    

    
                              For the 12 Months          For the 3 Months
                                    Ended                      Ended
                                 December 31,               December 31,
                              2007         2006         2007         2006
    

    
    Net Loss             $(38,185,890) $(2,786,040) $(1,296,937)  $(1,383,129)
      Add back:
        Asset impairment   34,000,000            -            -             -
    

    
      Net loss before
       asset impairment    (4,185,890)           -            -             -
      Add back:
        Depreciation,
         depletion,
         amortization and
         abandonment
         liability
         accretion expense  5,206,631    2,173,918    1,144,234       799,899
        (Gain) Loss on
         foreign
         currency exchange   (792,467)      32,008      (11,491)      406,778
         Stock based
          compensation
          expense           2,452,291    1,527,361      762,914       155,209
    

    Adjusted EBITDA        $2,680,565     $947,247     $598,720     
$(21,243)




For further information:

For further information: Mr. Lynn A. Peterson, CEO and President of
Kodiak  Oil & Gas Corp., +1-303-592-8075, or Mr. David P. Charles of Sierra
Partners  LLC, +1-303-757-2510, ext. 11, for Kodiak Oil & Gas Corp. Web Site:
http://www.kodiakog.com

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Kodiak Oil & Gas Corp.

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