DENVER, March 19 /PRNewswire-FirstCall/ -- Kodiak Oil & Gas
Corp. (Amex: KOG; TSX Venture: KOG), an oil and gas exploration and
production company with assets in the Green River and Williston
Basins, today reported financial and operating results for the
three months and 12 months ended December 31, 2006. Financial
tables for the full-year and the fourth quarter 2006 are included
at the end of this news release. Full-Year 2006 The Company
reported a net loss for the 12 months ended December 31, 2006 of
$2.8 million, or $0.04 per share, compared with a net loss of $2.0
million, or $0.05 per share, for the same period in 2005. All per
share amounts are presented on a weighted average basis. Kodiak had
87.5 million shares outstanding at year-end 2006 as compared to
54.5 million shares outstanding at year-end 2005. Net income before
depreciation, depletion and amortization and stock-based
compensation charges ("Adjusted EBITDA") was $947,000 for the
year-ended December 31, 2006 as compared to a loss of $1.2 million
for the same period in 2005. Oil and gas sales for the full-year
2006 were $4.2 million versus $365,000 in the same period in 2005.
Total revenues were $5 million versus $453,000 in the same period a
year ago. For the full-year 2006, Kodiak posted operating cash flow
of $3.1 million as compared to cash used by operations in 2005 of
$1.2 million. Total assets were $113.8 million at year-end 2006, up
from $25.8 million in the same period in 2005. Stockholders' equity
grew to $103.6 million December 31, 2006 from $21.3 million at
year-end 2005. The Company's cash position at year-end is $61.1
million, and it currently has no long-term debt. Fourth Quarter
2006 The Company reported a net loss for the three months ended
December 31, 2006 of $2.2 million, or $0.02 per share, compared
with a net loss of $1.1 million, or $0.02 per share, for the same
period in 2005. Net loss before depreciation, depletion and
amortization and stock-based compensation charges ("Adjusted
EBITDA") was $21,000 for the quarter-ended December 31, 2006 as
compared to a loss of $361,000 for the same period in 2005. Oil and
gas sales for the fourth quarter were $1.3 million versus $264,000
in the same period in 2005. Total revenues were $1.6 million versus
$280,000 in the same period a year ago. For the fourth quarter
2006, Kodiak posted operating cash flow of $3.5 million as compared
to $337,000 in the same period in 2005. Production For the
full-year 2006, gas and natural gas liquid production volumes were
117.3 MMcf, as compared to 31.8 MMcf for the same period in 2005.
Oil production volumes were 62,000 barrels for 2006, compared to
2,700 barrels during the same period in 2005. For full-year 2006,
Kodiak produced 489.1 MMcfe using a conversion rate of 6 Mcf gas to
each barrel of oil. This compares to 47.9 MMcfe in all of 2005. Gas
price realizations decreased 22% to $5.56 per Mcf for the full-year
2006, compared to the same period in 2005. Oil price realizations
improved by 7% to $55.52 per barrel for the period-ended December
31, 2006. Kodiak's production is currently unhedged. During 2006,
Kodiak invested $36.7 million for exploration and development of
its leasehold, including drilling nine gross wells (5.88 net) with
one gross dry hole (0.5 net) for an 89% success rate for the 2006
program. Also included in the year's CAPEX was $13.3 million for
leasehold and seismic acquisition. For the fourth quarter 2006, gas
production volumes were 27.3 MMcf, as compared to 29.2 MMcf for the
same period in 2005. Oil production volumes were 24,000 barrels for
the fourth quarter 2006, compared to 2,600 barrels during the same
period in 2005. On an equivalent basis for the quarter, Kodiak
produced 169.7 MMcfe, versus 44.9 MMcfe in the fourth quarter 2005.
For the fourth quarter, gas price realizations decreased 22% to
$4.55 per Mcf, as compared to the same period in 2005. Oil price
realizations decreased by 6% to $55.52 per barrel for the
period-ended December 31, 2006. Kodiak's production is currently
unhedged. Reserves Kodiak's year-end, estimated total proved
reserves were approximately 5.6 billion cubic feet of natural gas
equivalent (Bcfe), comprised of 2.4 billion cubic feet of natural
gas (Bcf) of natural gas and 532,900 barrels of crude oil. The
current reserve mix is 57% crude oil and 43% natural gas.
Approximately 96% of total reserves are categorized as proved
developed and 4% were proved undeveloped (PUD). Year-end prices
used to determine reserves were $4.53 per Mcf of natural gas and
$50.37 per barrel of oil for 2006, versus $8.11 per Mcf and $57.57
per barrel in 2005. By comparison, at year-end 2005, Kodiak's
proved reserves were 5.96 Bcfe, of which 52.4% was oil and 62% were
proved developed and 38% were classified as PUDs. The sharp drop in
commodity prices used to determine reserves, especially the decline
in natural gas prices year-over-year, resulted in the reduction in
PUD locations given to the Company by its independent reservoir
engineering firm, Netherland Sewell & Associates, Inc. (NSAI).
For 2006 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 $19.7 million as
compared to $18.2 million in 2005. Reserves for 2006 were estimates
by independent reservoir engineering consultants, NSAI and conform
to the definition as set forth in the SEC Regulation S-X Part
210.4-10 (a) as clarified by subsequent Commission Staff Accounting
bulletins. The proved reserves are also in accordance with
Financial Accounting Standards Board Statement No. 69 requirements.
Sproule Associates, Inc. estimated quantities for 2005. Management
Comment Commenting on today's results, Lynn Peterson, Kodiak's
President and CEO said: "Continued growths in production, oil and
gas sales and in shareholders' equity are a few of the
accomplishments I can point to for 2006. Like other Rockies'
operators, the December 31, 2006 gas prices effected booking our
PUDs. More important is our early results in the Vermillion Basin
which is bolstered by continued cash flow from our Williston Basin
oil production. That production affords us the opportunity to
leverage G&G talent to maximizing the potential that we believe
exists in the Vermillion Basin, a play that we believe is in its
nascent days. We are fortunate to have completed a capital raise at
the end of 2006, which has left Kodiak well-positioned to fund its
$60 million capital budget through a combination of cash on hand,
cash flow and an anticipated reserve-based revolving line of
credit. The hard work completed in 2005 and 2006 is essential in
providing a platform as we seek to grow our production and
reserves. We expect our performance in these important measures to
be scrutinized much more carefully as production history becomes
available and additional Vermillion Basin wells are drilled and
turned to sales in 2007." Use of Non-GAAP Financial Measures This
press release includes non-GAAP financial measures entitled
"Adjusted EBITDA." For a reconciliation of this non-GAAP financial
measures to its most comparable financial measure under GGAO, as
well as for a description as to why management believes that this
measure is useful for investors, see the footnotes following the
tables at the end of this press release. About Kodiak Oil & Gas
Corp. Kodiak Oil & Gas, headquartered in Denver, 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
common shares of the Company are listed for trading on the American
Stock Exchange and the TSX Venture 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. Information inferred from the
interpretation of drilling results may also be deemed to be
forward-looking statements, as it constitutes a prediction of what
might be found to be present when and if a well is actually
developed. 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, and the Company's expectations
regarding production from its Williston property. 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. The TSX
Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release. [Financial and Operational Tables
Accompany this News Release] 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
period ended December 31, 2006. KODIAK OIL & GAS CORP.
CONSOLIDATED BALANCE SHEET December 31, December 31, ASSETS 2006
2005 Current assets: Cash and cash equivalents $58,469,263
$7,285,548 Accounts receivable Trade 1,877,185 447,981 Accrued
Sales 666,990 226,406 Prepaid expenses and other 103,707 30,631
Total Current Assets 61,117,145 7,990,566 Property and equipment
(full cost method), at cost: Proved oil and gas properties
27,167,338 8,816,220 Unproved oil and gas properties 19,607,474
6,307,903 Wells in progress 7,700,415 2,461,087 Less-accumulated
depletion, depreciation and amortization (2,224,962) (121,941)
52,250,265 17,463,269 Other property and equipment, net of
accumulated depreciation of $102,231 in 2006 and $47,525 in 2005
181,752 183,481 Restricted Investments 224,452 153,000 Total Assets
$113,773,614 $25,790,316 LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities: Accounts payable and accrued liabilities
$9,879,104 $4,411,572 Noncurrent liabilities: Asset retirement
obligation 249,695 69,073 Total Liabilities 10,128,799 4,480,645
Commitments and Contingenicies - Note 7 Stockholders' equity:
Common stock, $0.01 par value: authorized-100,000,000 Issued:
87,548,426 shares in 2006 and 54,547,158 in 2005 875,484 545,472
Additional paid in capital 111,384,998 26,593,826 Accumulated
deficit (8,615,667) (5,829,627) Total Stockholders' Equity
103,644,815 21,309,671 Total Liabilities and Stockholders' Equity
$113,773,614 $25,790,316 KODIAK OIL & GAS CORP. CONSOLIDATED
STATEMENT OF OPERATIONS For the Years Ended December 31, 2006 2005
2004 Revenues: Gas production $718,926 $225,524 $-- Oil production
3,440,182 140,056 -- Interest 806,061 87,555 20,449 Total revenue
4,965,169 453,135 20,449 Cost and expenses: Oil and gas production
964,685 201,885 -- Depletion, depreciation, amortization and
abandonment liability accretion 2,173,918 157,868 13,671 General
and administrative 4,580,598 2,002,609 1,137,452 (Gain)/Loss on
currency exchange 32,008 95,864 (68,574) Total costs and expenses
7,751,209 2,458,226 1,082,549 Net loss for the period $(2,786,040)
$(2,005,091) $(1,062,100) Basic & diluted weighted-average
common shares outstanding 71,425,243 44,447,269 27,696,443 Basic
& diluted net loss per common share $(0.04) $(0.05) $(0.04)
KODIAK OIL & GAS CORP. CONSOLIDATED STATEMENT OF CASH FLOWS For
the Years Ended December 31, 2006 2005 2004 Cash flows from
operations Net loss $(2,786,040) $(2,005,091) $(1,062,100)
Reconciliation of net loss to net cash provided by operating
activities: Depletion, depreciation, amortization and abandonment
liability accretion 2,173,918 157,868 13,671 Stock based
compensation 1,527,361 541,111 411,238 Changes in currrent assets
and liabilites Accounts receivable- Trade (1,429,204) (424,322)
(53,505) Accounts receivable- Accrued Sales (440,585) (227,500) --
Prepaid expenses and other (73,076) 785 -- Accounts payable
4,168,775 735,928 281,083 Due to related party -- -- (35,246) Net
cash provided (used by) operating activities 3,141,149 (1,221,221)
(444,859) Cash flows from investing activities Oil and gas
properties (35,426,830) (11,853,969) (1,672,300) Equipment (52,976)
(124,196) (106,811) Restricted investment: designated as restricted
(82,052) 153,000 -- Restricted investment: undesignated as
restricted 10,600 -- -- Net cash used for investing activities
(35,551,258) (11,825,165) (1,779,111) Cash flows from financing
activity Proceeds from the issuance of shares 89,940,060 18,227,543
5,441,281 Issuance costs (6,346,236) (292,370) (263,801) Proceeds
from (repayment of) related party note payable -- -- (270,654) Net
cash provided by financing activities 83,593,824 17,935,173
4,906,826 Net change in cash and cash equivalents 51,183,715
4,582,785 2,682,856 Cash and cash equivalents at beginning of the
period 7,285,548 2,702,763 19,907 Cash and cash equivalents at end
of the period $58,469,263 $7,285,548 $2,702,763 Cash paid for
interest $-- $-- $8,824 Non-cash Items Oil & Gas Property
accrual included in Accounts Payable $4,605,396 $3,306,641 $--
Asset retirement obligation $231,431 $67,000 $-- Use of Non-GAAP
Financial Matters We use EBITDA, as adjusted as described below,
and referred to Adjusted EBITDA, as a supplemental measure of our
performance that is not required by, or presented in accordance
with, GAAP. We define Adjusted EBITDA as net income before (i)
interest expense, (ii) income taxes, (iii) depreciation, depletion
and amortization, (iv) non-cash expenses relating to share based
payments under FAS 123Rm (v) pre-tax unrealized gains and losses on
foreign currency and (vi) accretion of abandonment liability. We
present Adjusted EBITDA because we consider it an important
supplemental measure of our performance, in particular because it
excludes amounts, such as expenses relating to share-based payments
and unrealized gains and losses on foreign currency, that do not
relate directly to our operating performance on a more consistent
basis, we use this measure for business planning and analysis
purposes and in assessing acquisition opportunities and overall
rates of return. Adjusted EBITDA is not a measurement of our
financial performance under GAAP and should not be considered as an
alternative to net income, operating income or another performance
measure derived in accordance with GAAP, as an alternative to cash
flow from operating activities or as a measure of our liquidity.
You should not assume that the Adjusted EBITDA amounts shown in the
prospectus are comparable to Adjusted EBITDA amounts disclosed by
other companies. In evaluating Adjusted EBITDA, you would be aware
that it excluded expenses that we will incur in the future on a
recurring basis. Adjusted EBITDA has limitations as an analytical
too, and you should not consider it in isolation. Some of is
limitations are: it does not reflect non-cash costs of our stock
incentive plans, which are an ongoing component of our employee
compensation program; and although depletion, depreciation and
amortization are non-cash charges, the assets being depleted,
depreciated and amortized will often have to be replaced in the
future, and Adjusted EBITDA does not reflect the cost or cash
requirements for such replacements. We compensate for these
limitations by relying primarily on our GAAP results and using
Adjusted EBITDA only supplementally. Reconciliation between
Adjusted EBITDA and net income is provided in the table below for
the twelve month periods ended December 31: Year ended December 31,
2006 2005 Net Loss $(2,786,040) $(2,005,091) Add back:
Depreciation, depletion & amortization expense 2,173,918
157,868 Loss on foreign currency exchange 32,008 95,864 Stock based
compensation expense 1,527,361 541,111 EBITDA $947,247 $(1,210,248)
Reconciliation between Adjusted EBITDA and net income is provided
in the table below for the three months ended December 31: Three
months Ended December 31, 2006 2005 Net Loss $(2,238,271)
$(1,136,880) Add back: Depreciation, depletion & amortization
expense 1,655,012 128,849 Loss on foreign currency exchange 406,778
105,773 Stock based compensation expense 155,209 541,111 EBITDA
$(21,272) $(361,147) DATASOURCE: Kodiak Oil & Gas Corp.
CONTACT: Mr. Lynn A. Peterson, President of Kodiak Oil & Gas
Corp., +1-303-592-8075; or Mr. David Charles of EnerCom, Inc.,
+1-303-296-8834, for Kodiak Oil & Gas Corp.; or Ms. Heather
Colpitts, Associate Account Manager of CHF Investor Relations,
+1-416-868-1079, ext. 223, for Kodiak Oil & Gas Corp. Web site:
http:/// http://www.kodiakog.com/
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