- 312% Increase in Oil Production & 217% Growth in Equivalent
Production - 53% Sequential Growth in Oil & Gas Production
(Q309 vs. Q209) - Adjusted EBITDA $1.8 Million (Non-GAAP) - Oil
& Gas Sales Grow by 114% Quarter-over-Quarter DENVER, Nov. 5
/PRNewswire-FirstCall/ -- Kodiak Oil & Gas Corp. (NYSE Amex:
KOG), an oil and gas exploration and production company with assets
in the Williston Basin of North Dakota and Montana and in the Green
River Basin of southwest Wyoming and Colorado, today reported
financial and operating results for the third quarter 2009. Third
Quarter Financial Results The Company reported breakeven results
for the quarter-ended September 30, 2009, or $0.00 per basic and
diluted share, compared with a net loss of $18.0 million, or $0.20
per basic and diluted share, for the same period in 2008. The 2008
period's net loss includes $15.5 million in non-cash charges
related to an impairment of the carrying value of oil and gas
properties. Oil and gas sales for the third quarter 2009 were a
Company record $3.7 million, as compared to $1.7 million in the
prior year period, representing an increase of 114%. The
quarter-over-quarter growth in oil and gas sales is attributed to a
217% growth in equivalent production volumes offset in part by a
45% decrease in prices received for oil sales and a 24% decrease in
prices received for sales of the Company's natural gas. Crude oil
revenue accounted for approximately 97% of third quarter 2009 oil
and gas sales, as compared to 91% in the same period in 2008.
Further discussion is included in the Oil and Gas Sales section
below. For the third quarter 2009, Adjusted EBITDA was
approximately $1.8 million, as compared to approximately negative
$462,000 for the same period in 2008. Kodiak defines Adjusted
EBITDA as net income (loss) before interest, taxes, depreciation,
depletion, amortization and accretion, non-cash stockbased
compensation expense, impairment expense and gains or losses on
foreign currency exchange. Reconciliations of Adjusted EBITDA, a
non-GAAP measure, to net income (loss) are included in this news
release and in the Company's Form 10-Q for the quarter ended
September 30, 2009. Additional disclosure regarding the Company's
use of Adjusted EBITDA is included in the Company's Form 10-Q for
the quarter ended September 30, 2009. General and administrative
(G&A) expense was $2.0 million for the third quarter 2009, as
compared to $2.2 million for the same period in 2008. Included in
the G&A expense for the 2009 period is a non-cash stock-based
compensation charge of $772,000 for options issued to officers,
directors and employees, as compared to $775,000 for the same
period in 2008. Nine-month Period For the nine months ended
September 30, 2009, Kodiak reported a net loss of $2.2 million, or
$0.02 per basic and diluted share, compared with a net loss of
$22.5 million, or $0.25 per basic and diluted share, for the same
period in 2008. The 2008 period's net loss includes $15.5 million
in non-cash charges related to an impairment of the carrying value
of oil and gas properties. Oil and gas sales for the nine-month
period of 2009 were $6.5 million, versus $5.6 million for the same
period in 2008. Crude oil revenue accounted for approximately 92%
of 2009 oil and gas sales, as compared to 80% in the same
nine-month period in 2008. For the nine-month period of 2009,
Adjusted EBITDA was approximately $1.9 million, as compared to
approximately negative $1.1 million for the same period in 2008.
Net cash provided by operating activities was $5.1 million during
the first nine months of 2009, as compared to net cash used in
operating activities of $3.1 million in the prior-year period.
Total assets were $50.2 million at September 30, 2009, as compared
to $39.0 million at December 31, 2008. Stockholders' equity was
$40.3 million at September 30, 2009, as compared to $33.0 million
at year-end 2008. The Company's cash and cash equivalents position
at September 30, 2009 was $1.8 million, and it currently has no
long-term debt. In addition, prepaid expenses, including tubular
goods and surface equipment, were $7.4 million and accounts
receivable and accrued revenue was $5.8 million, both at September
30, 2009. Kodiak's total current assets at September 30, 2009 were
$15.0 million, and its total current liabilities were $8.9 million,
providing working capital of $6.1 million. Please see the
subsequent events section for a discussion of the Company's current
cash and equivalents positions, and its recently announced public
offering of common stock. G&A expense decreased 14% to $5.6
million for the first nine months of 2009, from $6.5 million for
the same period in 2008. Included in the G&A expense for the
2009 period is a non-cash stock-based compensation charge of $2.1
million for options issued to officers, directors and employees, as
compared to $2.7 million for the same period in 2008. The 14% in
total G&A reduction for the period is primarily due to an
ongoing effort to reduce G&A costs Company-wide. Oil and Gas
Sales Kodiak's third quarter 2009 oil and gas sales volumes were a
Company-record 69,000 barrels of oil equivalent (BOE) as compared
to 22,000 BOE in the same period in 2008, a 217% increase, and a
53% increase over second quarter 2009 volumes of 45,000 BOE. Oil
sales volumes were 61,000 barrels for the third quarter 2009, as
compared to 15,000 barrels in the same period in 2008, a 312%
increase, and a 73% increase over second quarter 2009 volumes of
35,000 barrels. The growth in oil production is attributed to new
Bakken oil wells being brought on-line during the third quarter of
2009. By commodity in the third quarter of 2009, crude oil
constituted 88% of the production base, as compared to 68% in the
third quarter of 2008. Gas volumes were 48.0 million cubic feet
(MMcf) in the third quarter 2009, as compared to 42.0 MMcf in the
prior-year period, and as compared to 58.9 MMcf in the second
quarter of 2009. On a quarter-over-quarter basis, the average price
received for crude oil fell by 45%. The Company sold its oil for
$58.94 per barrel during the third quarter 2009, as compared to the
$107.47 per barrel received during the prior-year period. For the
third quarter 2009, the average gas price received decreased 24 %
to $2.70 per thousand cubic feet of natural gas (Mcf), as compared
to the $3.57 per Mcf received in 2008. Kodiak currently does not
hedge any of its oil and gas production volumes. During the first
nine months of 2009, Kodiak invested $18.8 million primarily for
the drilling and completion of wells in its Bakken drilling
program, of which $7.3 million was invested during the third
quarter 2009. During the first nine months of 2009, Kodiak drilled
nine gross wells (4.8 net) and completed six gross wells (3.1 net)
as producers. Company-wide, Kodiak now has working interests in 33
gross (18.3 net) wells, of which 23 gross (14.2 net) are
Kodiak-operated wells. For the first nine months of 2009, oil and
gas sales volumes improved by 117% to 147,000 BOE, as compared to
68,000 BOE in the same period in 2008. Oil sales volumes grew 159%
to 113,000 barrels for the nine-month period, as compared to 44,000
barrels in the same period in 2008. By commodity in the first nine
months of 2009, crude oil constituted 77% of the production base,
as compared to 64% in the prior-year period. Gas volumes were 206.5
MMcf for the 2009 nine-month period, as compared to 144.7 MMcf in
the prior-year period, representing a 43% period-over-period
increase. The average price received for crude oil in the first
nine months of 2009 was sharply lower, netting 49% less than in the
same period in 2008. The Company sold its crude oil for an average
price of $52.77 per barrel during the first nine months of 2009, as
compared to the $103.18 per barrel received during the prior-year
period. For the first nine months of 2009, the average gas price
received decreased 65% to $2.62 per Mcf, as compared to the $7.45
per Mcf received in 2008. Kodiak currently does not hedge any of
its oil and gas production volumes. For the first nine months of
2009, Kodiak's crude oil price differentials for its FBIR oil sales
averaged $9.25 per barrel and include trucking and marketing costs.
Kodiak Oil & Gas Corp. Production Comparison Three-months
Nine-months Ended Ended ----- ----- Product Sept. Sept. Sept. Sept.
Sales 30, 30, % 30, 30, % Volumes 2009 2008 Change 2009 2008 Change
-------------------- ------ ----- ------ ------- ------- -----
Natural Gas (Mcf) 47,982 42,000 14% 206,554 144,709 43%
---------------- ------ ------ -- ------- ------- -- Oil (Bbls)
61,121 14,832 312% 112,921 43,691 159% ---------- ------ ------ ---
------- ------ --- Barrels of Oil Equivalent (BOE) 69,118 21,832
217% 147,347 67,809 117% ----------------- ====== ====== ---
======= ====== --- Product Price Received ----------------------
Natural Gas ($/Mcf) $2.70 $3.57 (24%) $2.62 $7.45 (65%)
----------------------- ----- ----- ---- ----- ----- ---- Crude Oil
($/Bbl) $58.94 $107.47 (45%) $52.77 $103.18 (49%)
----------------------- ------ ------- ---- ------ ------- ----
Sequential Quarter Three-months Comparison ------------------ Ended
----- Product Sept. June Sales 30, 30, % Volumes 2009 2009 Change
-------------------- --------- ----- ------- Natural Gas (Mcf)
47,982 58,878 (19%) ----------------- ------ ------ ---- Oil (Bbls)
61,121 35,314 73% ---------- ------ ------ -- Barrels of Oil
Equivalent (BOE) 69,118 45,127 53% ----------------- ====== ======
-- Williston Basin Drilling and Completion Operations -- North
Dakota and Montana Kodiak's exploration efforts target oil and gas
production from the middle member between the upper and lower
Bakken shales, which are the source for existing hydrocarbons. The
Three Forks / Sanish Formation, a productive interval lying
directly below the lower Bakken shale, is also expected to be a
future exploration target. Commercial production from the Three
Forks / Sanish Formation is being reported by operators in the
immediate area. The Company intends to test the productive
potential of the Three Forks Formation during the first half of
2010. Please reference Kodiak's comprehensive operations update
news release dated October 22, 2009 and its related filing on Form
8-K dated October 22, 2009 for a detailed discussion of recent
drilling and completion activities on the Fort Berthold Indian
Reservation (FBIR) in Dunn County, N.D., a summary of which is
included in the table below. A significant portion of the Company's
Bakken shale leasehold position is located on the FBIR in Dunn
County, N.D. where all Company drilling and completion activity has
occurred in 2009. At September 30, 2009, Kodiak had approximately
55,000 gross and 35,000 net acres under lease on the FBIR. Kodiak
operates all of its leasehold on the Reservation, with the
exception of approximately 9,000 net acres that are in a
participating area previously established with another operator.
During 2009, Kodiak drilled and completed eight wells on the FBIR,
all targeting the Middle Bakken Formation. A ninth well has been
drilled and is waiting on completion, which the Company expects to
occur during the fourth quarter 2009. The Company recently spud its
tenth well, the Moccasin Creek (MC) #16-3-11H, a Bakken test that
Kodiak operates with a 60% working interest (WI) and a 49% net
revenue interest (NRI). The well is being drilled on a two-well pad
and will include the MC #16-3H (60%WI / 49% NRI) which is intended
to spud immediately following reaching total depth on the MC
#16-3-11H. Both wells are anticipated to undergo completion
operations in the first quarter of 2010. The MC 16-3-11H well is
the third well (second promoted well) drilled under an exploration
agreement entered into during the fourth quarter 2008 pursuant to
which the Company is required to pay 20% of drilling and completion
costs for its 60% working interest. The Three Forks Formation is
gaining in importance for increased Williston Basin exploration and
development activity. Kodiak understands that two Three Forks test
wells have been drilled by another operator on the FBIR. The first
well has been on production since March 2009, while the second well
is awaiting completion and is anticipated to be completed in the
fourth quarter 2009. Kodiak is evaluating all Three Forks activity
in the immediate area and in the greater Williston Basin and
intends to drill a Three Forks test in early 2010, subject to joint
venture partner approval. In the event the Three Forks is
commercial, the Company will consider drilling four wells off of
each drilling pad, two of which would test the middle Bakken and
two would test the Three Forks. The Company believes that a
four-well pad could provide meaningful cost savings and improved
per-well economics due to beneficial economies of scale and
significant reductions in rig mobilization and de-mobilization and
well- site construction costs. An added benefit is further
reduction in potential surface disturbance. Kodiak Oil & Gas
Corp. 2009 FBIR Drilling and Completion Activities Longer Laterals
(8,000' - 10,000') IP First Number 24- 30 WI/ Days of Hour Days NRI
to Lateral Completion Frac Test BOE Well (%) TD* Length Date Stages
(BOE/d)Production Comment ---- --- ---- ------ ---------- -----
------ ---------- ------ TSB Flowing #16-8-7H 37.5/30.5 28 8,995'
6/7/2009 15 1,856 23,874 Well --------- --------- -- ------
-------- -- ----- ------ --------- TSB Flowing #14-33-28H 50/41 31
8,313' 8/3/2009 15 1,492 21,400 Well ----------- ------ -- ------
-------- -- ----- ------ --------- CE Flowing #1-22-10H 55/45 32
9,949' 10/18/09 15 1,288 -- Well ------------ ----- -- ------
-------- -- ----- --- --------- TB #16-15-16H 60/50 25 9,442' Q409
19 -- -- WOCU** ----------- ------ -- ------ ---- -- --- --- -----
Shorter Laterals (4,000' - 7,000') IP First Number 24- 30 WI/ Days
of Hour Days NRI to Lateral Completion Frac Test BOE Well (%) TD*
Length Date Stages (BOE/d)Production Comment ---- --- ---- ------
---------- ----- ------ ---------- ------ MC Flowing #16-34-2H
60/49 41 4,169' 4/23/2009 8 711 9,155 Well ------------ ----- --
------ --------- --- --- ----- --------- MC Flowing #16-34H 60/49
36 4,150' 5/4/2009 5 1,394 14,720 Well ---------- ----- -- ------
-------- --- ----- ------ --------- TSB Flowing #16-8-16H 50/41 31
4,465' 6/18/2009 5 811 12,758 Well ------------- ----- -- ------
--------- --- --- ------ --------- TSB Flowing #14-33-6H 50/41 26
4,163' 8/24/2009 6 978 13,608 Well ------------- ----- -- ------
--------- --- --- ------ --------- CE Flowing #1-22-23H 60/50 19
6,620' 10/18/09 13 845 -- Well ------------ ----- -- ------
--------- --- --- --- --------- MC Approx. Spud #16-3-11H 60/49 --
4,900' -- -- -- -- Oct. 2009 ---------- ------ -- ------ --- ---
--- --- --------- MC Approx. Spud #16-3H 60/49 -- 4,100' -- -- --
-- Q409 -------- ------ -- ------- --- --- --- --- ---------
*Includes running liner in the hole / ** Waiting on completion unit
Kodiak continues to work with other FBIR operators in developing
midstream pipeline infrastructure for crude oil and natural gas
transportation through pipelines to eliminate trucking and the
flaring of gas. The gas associated with middle Bakken oil is high
in BTU content and provides the opportunity for additional revenues
if the Company is able to process gas through a natural gas
processing plant, the construction of which is also being
discussed. One pipeline project has been laid within approximately
two miles of the western portion of Kodiak's leasehold and the
Company understands that the operator is intending to have its
initial phase in service by year-end 2009. The Company also
understands that other midstream companies are attempting to
develop alternative pipeline systems within the FBIR. If these
projects are approved and successfully constructed, Kodiak believes
that it may have pipeline access to the entire FBIR leasehold by
late 2011. Under these pipeline scenarios, Kodiak would likely ship
its hydrocarbons via the third-party operated pipeline and would
not seek to invest in this or other midstream activities. In
addition to the FBIR acreage, Kodiak has another 44,000 gross and
25,000 net acres in eastern Montana and western North Dakota
prospective for the Bakken and Three Forks formations, the Mission
Canyon Formation and the Red River Formation. The Company intends
to participate in the drilling of at least two seismically defined
Red River tests in the first half 2010, as well as a non-operated
Bakken test well in the Mondak Field in McKenzie County, N.D.
Kodiak has legacy Bakken oil production from the Mondak Field,
which was completed without the advantage of recent Bakken
horizontal completion techniques. Events Subsequent to the End of
the Third Quarter 2009 On October 30, 2009, the Company announced
the closing of a public offering of 13,800,000 shares of common
stock, which included the full exercise of the underwriters'
over-allotment option of 1,800,000 shares. All shares were sold a
price of $2.20 per share. Including the exercise of the
over-allotment option, the net proceeds of the offering, after
deducting underwriting discounts and commissions and any offering
expenses, were approximately $28.6 million. Kodiak intends to use
the proceeds from the offering primarily to fund the exploration
and development of its acreage within the FBIR in Dunn County, N.
D. and for other general corporate purposes. The Company currently
has 16 well bore permits (eight drilling pads) approved by the
Bureau of Indians Affairs and the Bureau of Land Management,
including the next two Moccasin Creek wells. With these approved
well permits and another seven permits in the approval process,
Kodiak intends to develop a 2010 drilling program of 17 gross
wells, (10 net wells), utilizing the Company's operated rig and a
second rig scheduled for delivery in 2010. Additionally, Kodiak has
been advised by its joint venture partner that exploration efforts
on the non-operated portion of Kodiak's FBIR leasehold are expected
to begin in the second quarter of 2010, which could be up to seven
gross wells, (three net wells). In total, Kodiak may participate in
as many as 24 gross wells, (13 net wells) on the FBIR. The Company
has also committed to participating in three additional gross wells
(0.7 net) on its non-FBIR Williston Basin leasehold. The estimated
capital expenditures required for drilling these wells are not
expected to be material, relative to the Company's 2010 drilling
program as outlined above. Over the next several months, after
Kodiak completes the analysis of oil and gas production from the
recently completed Charging Eagle wells and the Tall Bear well that
has been drilled but not completed, the Company intends to take
delivery of a second Kodiak-operated rig in 2010. The Company
initially intends to use the rig to develop the Twin Buttes Federal
Unit which is geographically separated from Kodiak's northwestern
and western FBIR operating areas by the Little Missouri River
making rig mobilizations and demobilizations more capital
intensive. Kodiak anticipates that the net proceeds from the
October 30, 2009 public offering, together with cash generated from
anticipated production, will be sufficient to support the Company's
planned oil and natural gas exploration program through the end of
2010. Q309 Teleconference Call In conjunction with Kodiak's release
of its results, investors, analysts and other interested parties
are invited to listen to a conference call with management on
Friday, November 6, 2009 at 11:00 a.m. Eastern Standard Time.
Kodiak Oil & Gas Corp. Third Quarter 2009 Financial and
Operating Results Conference Call
------------------------------------------------------- Date:
Friday, November 6, 2009 ----- ------------------------ Time: 11:00
a.m. EST ----- -------------- 10:00 a.m. CST -------------- 9:00
a.m. MST -------------- 8:00 a.m. PST -------------- Call: (877)
257-3168 (US/Canada) and (706) 643-3820 (International); Passcode:
37285961 -----
--------------------------------------------------------------
Internet: Live and rebroadcast over the Internet --------
--------------------------------------------------------------
http://www.videonewswire.com/event.asp?id=63321
--------------------------------------------------------------- or
at http://www.kodiakog.com/
---------------------------------------------------------------
Replay: Available through Thursday, November 12, 2009 at (800)
642-1687 (US/Canada) and (706) 645-9291 (International) using
passcode: 37285961 and for 30 days at http://www.kodiakog.com/
---------------------------------------------------------------
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
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 NYSE Amex 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
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. 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
period ended September 30, 2009 filed with the Securities and
Exchange Commission on November 5, 2009. For further information,
please contact: Mr. Lynn A. Peterson, CEO and President, Kodiak Oil
& Gas Corp. +1-303-592-8075 Mr. David P. Charles, Sierra
Partners LLC +1-303-757-2510 x11 [Financial and Operational Tables
accompany this News Release] KODIAK OIL & GAS CORP. CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) September 30, December 31,
ASSETS 2009 2008 ------ ---- ---- Current Assets: Cash and cash
equivalents $1,754,518 $7,581,265 Accounts receivable Trade
3,840,232 1,934,818 Accrued sales revenues 2,020,757 516,870
Prepaid expenses and other 7,428,725 10,621,980 ---------
---------- Total Current Assets 15,044,232 20,654,933 ----------
---------- Oil and gas properties (full cost method), at cost:
Proved oil and gas properties 113,057,019 97,934,058 Unproved oil
and gas properties 11,721,677 11,985,533 Wells in progress
4,703,767 728,093 Less-accumulated depletion, depreciation,
amortization, accretion and asset impairment (94,604,702)
(92,804,911) ----------- ----------- Net oil and gas properties
34,877,761 17,842,773 ---------- ---------- Other property and
equipment, net of accumulated depreciation of $265,776 in 2009 and
$270,620 in 2008 288,072 272,705 Restricted investments - 246,068
--- ------- Total Assets $50,210,065 $39,016,479 ===========
=========== LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------ Current Liabilities: Accounts
payable and accrued liabilities $7,595,552 $4,125,335 Advances from
joint interest owners 1,307,484 1,105,740 --------- --------- Total
Current Liabilities 8,903,036 5,231,075 Noncurrent Liabilities:
Asset retirement obligation 1,034,000 787,180 --------- -------
Total Liabilities 9,937,036 6,018,255 --------- ---------
Commitments and Contingencies Stockholders' Equity: Common stock -
no par value; unlimited authorized Issued and outstanding:
104,979,931 shares in 2009 and 95,129,431 shares in 2008
Contributed surplus 145,747,452 136,297,845 Accumulated deficit
(105,474,423) (103,299,621) ------------ ------------ Total
Stockholders' Equity 40,273,029 32,998,224 ---------- ----------
Total Liabilities and Stockholders' Equity $50,210,065 $39,016,479
=========== =========== KODIAK OIL & GAS CORP. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three
months ended Nine Months Ended September 30, September 30,
------------------- ----------------- 2009 2008 2009 2008 ---- ----
---- ---- Revenues: Gas production $129,454 $149,804 $541,257
$1,077,887 Oil production 3,602,704 1,594,080 5,958,771 4,507,974
Interest & other 7,171 38,467 43,691 158,717 ----- ------
------ ------- Total revenue 3,739,329 1,782,351 6,543,719
5,744,578 --------- --------- --------- --------- Cost and
expenses: Oil and gas production 740,185 856,398 1,232,389
3,121,967 Depletion, depreciation, amortization and accretion
1,050,481 1,220,222 1,938,275 3,104,298 Asset impairment -
15,500,000 - 15,500,000 General and administrative 1,962,087
2,162,388 5,558,382 6,488,938 (Gain)/loss on currency exchange
(4,384) 2,992 (10,526) 19,501 ------ ----- ------- ------ Total
costs and expenses 3,748,369 19,742,000 8,718,520 28,234,704
--------- ---------- --------- ---------- Net loss $(9,040)
$(17,959,649) $(2,174,801) $(22,490,126) ======= ============
=========== ============ Basic & diluted weighted-average
common shares outstanding 104,832,898 91,742,529 100,101,589
89,265,263 =========== ========== =========== ========== Basic
& diluted net loss per common share $(0.00) $(0.20) $(0.02)
$(0.25) ====== ====== ====== ====== KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine
Months Ended September 30, 2009 2008 ---- ---- Cash flows from
operating activities: Net loss $(2,174,801) $(22,490,126)
Reconciliation of net loss to net cash (used in) provided by
operating activities: Depletion, depreciation, amortization and
accretion 1,938,275 3,104,298 Asset impairment - 15,500,000 Stock
based compensation 2,146,983 2,742,312 Changes in current assets
and liabilities: Accounts receivable-trade (1,905,414) (736,751)
Accounts receivable-accrued sales revenue (1,503,887) 27,572
Prepaid expenses and other 2,807,942 6,524 Accounts payable and
accrued liabilities 3,749,090 (1,267,033) --------- ---------- Net
cash provided by (used in) operating activities 5,058,188
(3,113,204) --------- ---------- Cash flows from investing
activities: Oil and gas properties (18,778,013) (11,930,131) Sale
of oil and gas properties 3,250,000 2,437,892 Equipment 8,000
(19,846) Prepaid tubular goods (2,928,615) (6,859,918) Restricted
investment: undesignated as restricted 246,068 10,329 -------
------ Net cash (used in) investing activities (18,202,560)
(16,361,674) ----------- ----------- Cash flows from financing
activity: Proceeds from the issuance of shares 7,425,450 18,935,000
Issuance costs (107,825) (1,283,512) -------- ---------- Net cash
provided by financing activities 7,317,625 17,651,488 ---------
---------- Net change in cash and cash equivalents (5,826,747)
(1,823,390) Cash and cash equivalents at beginning of the period
7,581,265 13,015,318 --------- ---------- Cash and cash equivalents
at end of the period $1,754,518 $11,191,928 ========== ===========
Supplemental cash flow information Oil & gas property accrual
included in Accounts payable and accrued liabilities $1,380,060
$47,500 ========== ======= Asset retirement obligation $175,047
$(65,143) ======== ======== Use of Non-GAAP Financial Matters In
evaluating its business, Kodiak considers earnings before interest,
taxes, depreciation, depletion, amortization, gains or losses on
foreign currency exchange, non-cash stockbased compensation
expense, impairment expense accretion or abandonment liability
("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 Three months Three months ended
ended September 30, September 30, Reconciliation of Adjusted
EBITDA: 2009 2008 ---- ---- Net income (loss) $(9,040)
$(17,959,649) Add back: Depreciation, depletion, amortization and
accretion 1,050,481 1,220,222 Asset impairment - 15,500,000 (Gain)
/ loss on foreign currency exchange (4,384) 2,992 Stock based
compensation expense 771,903 774,800 ---------- --------- Adjusted
EBITDA $1 ,808,960 $(461,635) ========== ========= Nine months Nine
months ended ended September 30, September 30, Reconciliation of
Adjusted EBITDA: 2009 2008 ---- ---- Net income (loss) $(2,174,801)
$(22,490,126) Add back: Depreciation, depletion, amortization and
accretion 1,938,275 3,104,298 Asset impairment - 15,500,000 (Gain)
/ loss on foreign currency exchange (10,526) 19,501 Stock based
compensation expense 2,146,983 2,742,312 ---------- -----------
Adjusted EBITDA $1,899,931 $(1,124,015) ========== ===========
DATASOURCE: Kodiak Oil & Gas Corp. CONTACT: 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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