DENVER, March 11 /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. 2008 Financial Results The
Company reported a net loss for the year ended December 31, 2008 of
$56.5 million, or $0.62 per basic and diluted share, compared with
a net loss of $38.2 million, or $0.44 per basic and diluted share,
for the same period in 2007. The 2008 net loss includes $47.5
million in non-cash charges related to impairments of the carrying
value of oil and gas properties. Net loss before the impairment
charge for 2008, a non-GAAP measure, is $9.0 million, or $0.10 per
share. The 2007 net loss also includes $34 million in non-cash
charges related to an impairment of the carrying value of oil and
gas properties. Impairment Charges As of December 31, 2008, based
on net oil and gas prices of $24.09 per barrel of crude oil and
$3.76 per thousand cubic feet (Mcf) of natural gas, the value of
Kodiak's proved reserves as calculated under SEC guidelines did not
support the costs included in the full cost pool. In addition,
revisions in 2008 included the writing off of all of the Company's
proved undeveloped locations, as well as a sale of approximately
1.2 billion cubic feet of natural gas equivalents of proved
reserves to a working interest partner. Additionally, the Company
evaluated its existing unproved properties and determined that
approximately $17.2 million of its unproved properties were
impaired as of December 31, 2008. All of Kodiak's undeveloped
leasehold was valued in line with recent lease sales in its
operating areas and is based upon remaining terms. Due to the
Company's current capital constraints, the Company impaired all
leases expiring in 2009 since existing capital is allocated to the
Company's Eastern Bakken play in Dunn County, N.D., and concern for
the lack of capital in the industry to support drilling activity
through farm-outs. Therefore, Kodiak reclassified this amount to
the full cost pool prior to conducting its year-end 2008 ceiling
test. As a result, Kodiak recorded a write-down of $32.0 million
during the fourth quarter of 2008. This write-down is in addition
to a $15.5 million impairment charge recorded during the quarter
ended September 30, 2008, bringing the full-year 2008 impairment
charge to $47.5 million. Results Continued Total revenues were $6.9
million for the full-year 2008 reporting period, as compared to
approximately $9.3 million for the full-year 2007, a decrease of
25%. Oil and gas sales decreased 13% to approximately $6.8 million
for the full-year 2008, as compared to $7.8 million in 2007. The
decrease in oil and gas sales is attributed to 20% lower oil
revenues, and the shut-in status of three significant oil producers
while workovers were performed during the first half of 2008,
offset in part by a 30% increase in natural gas revenues. Kodiak
posted a 28% decrease in year-over-year equivalent production
volumes. Crude oil revenue accounted for approximately 80% of total
2008 oil and gas sales, and crude oil constituted 65% of produced
volumes in 2008. Adjusted EBITDA was a negative $1.2 million for
the full-year 2008, as compared to $2.7 million for the same period
in 2007. 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. The
decrease is primarily attributed to decreased revenues and
increased production expense. 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 reported net cash used in
operating activities for the full-year 2008 of $2.2 million, as
compared to operating cash flow in 2007 of $2.1 million. Total
assets were $39.0 million at year-end 2008, as compared to $74.3
million in the same period in 2007. The decrease in total assets is
primarily attributed to the above-mentioned impairment charge.
Stockholders' equity was $33.0 million at December 31, 2008, as
compared to $68.3 million at year-end 2007. The Company's total
current assets at year-end 2008 were $20.7 million, and it
currently has no long-term debt. General and administrative
(G&A) expense increased to $8.2 million for the year-ended
December 31, 2008, from $7.3 million for the same period in 2007.
Included in the G&A expense for 2008 is a stock-based
compensation charge of $3.6 million for options issued to officers,
directors and employees, as compared to $2.5 million for the same
period in 2007. Oil and Gas Sales Kodiak's oil and gas sales
volumes decreased by 28% to 98,564 barrels of oil equivalent (BOE),
as compared to 136,279 BOE in 2007. For the year, Kodiak grew
natural gas sales by 5% to 209.8 million cubic feet (MMcf), as
compared to 200.2 MMcf for 2007. Oil sales volumes were down 38% to
63,595 barrels for 2008, as compared to 102,914 barrels in 2007. By
commodity, crude oil constitutes 65% of the production base. The
Company attributes lower production in 2008 to shut-in producing
oil wells while performing workovers , to a reduced drilling
program that brought only one gross (0.1 net) well onto production,
and to the natural production declines in existing wells. For 2008,
the average gas price received improved to $6.54 per Mcf, as
compared to the $5.26 per Mcf received in 2007. Kodiak enjoyed an
uplift of 29% in the average price received for crude oil in 2008.
The Company sold its oil for $84.86 per barrel for the year, as
compared to the $65.72 per barrel received during 2007. Kodiak
currently does not hedge any of its oil and gas production volumes.
During 2008, Kodiak invested $11.0 million in its oil and gas
operations, $7.8 million of which related to the acquisition of oil
and gas properties in the Williston Basin and $3.2 million of which
was allocated to drilling, completion and workover expenses as well
as related infrastructure. The Company drilled one gross well (0.1
net) in 2008. Kodiak now has working interests in 24 gross (13.6
net) wells, of which 14 gross (9.4 net) are Kodiak-operated wells.
As of December 31, 2008, Kodiak owned or controlled approximately
167,000 gross and 99,000 net acres primarily in its core operating
areas of the Green River and Williston Basins. Fourth Quarter 2008
The Company reported a net loss for the three months ended December
31, 2008 of $34.0 million, or $0.37 per share, compared with a net
loss of $1.3 million, or $0.02 per share, for the same period in
2007. Adjusted EBITDA for the fourth quarter 2008 was a negative
$114,000, as compared to $599,000 for the same period in 2007. Oil
and gas sales for the fourth quarter were $1.2 million, versus $2.2
million in the same period in 2007. Total revenues were $1.2
million, versus $2.3 million in the year-ago period. For the fourth
quarter 2008, Kodiak posted operating cash flow of $0.9 million, as
compared to $1.4 million in the same period in 2007. Kodiak's
fourth quarter 2008 oil and gas sales volumes were 30,756 BOE, as
compared to 31,427 BOE in the same period in 2007. Oil comprised
65% of the equivalent quarterly production for 2008. The average
oil price received was $44.65 per barrel, as compared to the $80.43
per barrel received during the fourth quarter 2007. For the fourth
quarter 2008, the average natural gas price received was $4.51 per
Mcf, as compared to $6.15 per Mcf received in 2007. During the
quarter, Kodiak invested $1.7 million for exploration and
development of its leasehold, primarily in Dunn County, N.D. on the
Fort Berthold Indian Reservation (FBIR). 2008 Proved Reserves
Kodiak's year-end 2008 estimated total proved reserves were
approximately 3.3 billion cubic feet of natural gas equivalent
(Bcfe), or 0.547 million barrels of oil equivalent (MMBoe). This
compares to 8.3 Bcfe, or 1.4 MMBoe in 2007. The 2008 total, a 60%
decrease on an equivalent basis from 2007s' estimated quantities,
is comprised of 1.2 Bcf of natural gas and 344,400 barrels of crude
oil. The 2008 reserve mix is 63% crude oil and 37% natural gas.
Approximately 100% of 2008 total proved reserves are categorized as
proved developed, as compared to 75% proved developed and 25%
proved undeveloped in 2007. Average year-end prices used to
determine reserves were $3.76 per Mcf of natural gas and $24.09 per
barrel of oil for 2008, versus $6.97 per Mcf of natural gas and
$81.30 per barrel of oil for 2007. For 2008 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 $5.3 million, as compared to $36.2 million in 2007.
Kodiak attributes the decrease in 2008 proved reserves to the 70%
and 46% year-over-year decline respectively in oil and gas prices
used to estimated economic quantities of proven reserves, the sale
of reserves, and to the write-off of previously recorded proved
undeveloped reserves. Reserve estimates for 2008 were prepared by
independent reservoir engineering consultants, Netherland, Sewell
& Associates, Inc. (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. In accordance with SEC
guidelines, reserve estimates do not include any probable or
possible reserves which may exist for Kodiak's properties. NSAI
also audited Kodiak's estimated reserves as of December 31, 2007.
Williston Basin--North Dakota Middle Member Bakken Shale As of
January 1, 2009, Kodiak had approximately 56,000 gross and 37,000
net acres under lease on the FBIR in Dunn County, N.D., where the
primary objective is the middle Bakken dolomite between the upper
and lower Bakken shales at an approximate vertical depth of 10,000
feet. Additional productive potential exists from the Three Forks/
Sanish Formation just below the lower Bakken shale. Kodiak operates
all of its leasehold on the FBIR, with the exception of
approximately 9,000 net acres that are in a participating area
previously established with another operator. The Company holds and
inventory of 11 fully permitted locations on the FBIR. Subsequent
to year-end 2008, Kodiak reached total depth on two wells and spud
a third well. The Moccasin Creek (MC) #16-34-2H well (Kodiak
operates with 60% working interest [WI] and 49% net revenue
interest [NRI]) and the MC #16-34H well (Kodiak operates with 60%
WI and 49% NRI) are both awaiting completion operations. Location
work is currently being done to prepare these wells for completion
in the coming months as the harsh winter conditions subside.
Approximately 10 miles north of the Moccasin Creek locations, the
Two Shields Butte (TSB) #16-8-16H (Kodiak operates with a 50% WI
and a 41% NRI) was recently spud. This well is currently being
drilled to a proposed total vertical depth of 10,400 feet and a
total measured depth of 15,000 feet. Upon reaching total depth and
running a liner, a second well, the TSB #16-8-7H (Kodiak operates
with a 37.5% WI and a 30.5% NRI), is planned to be drilled from
this same surface location to a total measured depth of 19,000
feet. Vermillion Basin--Wyoming Vermillion Basin Deep--Baxter Shale
and Frontier and Dakota Sandstone At December 31, 2008, Kodiak
owned or controlled approximately 43,000 gross (16,000 net) acres
in the Vermillion Basin of the Green River Basin in Wyoming and
Colorado. Kodiak's exploration efforts focus on the over-pressured
Baxter Shale at depths to approximately 13,000 feet. The Company's
joint venture partner, Devon Energy Production Company, L.P.,
commenced drilling operations in August 2008 and has drilled four
wells to date to obtain and evaluate data points from different
locations within the acreage block, specifically in the Horseshoe
Basin Unit located on the western edge of Kodiak's acreage and the
Coyote Flats Federal Unit located on the northern edge. Kodiak has
an approximate 50% working interest in these wells which have yet
to be completed. We anticipate completion of the two wells that
were drilled horizontally during the summer months. Liquidity and
2009 Capital Expenditures The Company had working capital of $15.4
million inclusive of cash and cash equivalents of $7.6 million as
of December 31, 2008 and approximately $3.0 million in cash and
cash equivalents as of February 28, 2009. Kodiak's working capital
included $6.5 million of prepaid tubular goods for the first six
wells of its 2009 drilling program, which have been reported as
prepaid expenses as the Company had not taken physical delivery of
the goods as of December 31, 2008. These costs will be applied to
Kodiak's share of the drilling costs for the first six wells, or
will be recovered from its drilling partners. Based on Kodiak's
original 2009 drilling and exploration program, the Company
anticipated that its 2009 capital expenditures in the Williston
Basin would be approximately $11.3 million. While the Company
cannot fully assess its capital expenditures or the timing of
expenditures in the Vermillion Basin as Kodiak does not operate the
properties, the Company anticipates that two of the wells that were
horizontally drilled during 2008 could be completed during 2009.
These costs cannot be determined at this time due to the
uncertainty of commodity prices and expenditures. It is estimated
that Kodiak's share of the completion costs would not exceed $4.0
million. The Company recently executed a $20.0 million Credit
Facility with Bank of the West, NA. The borrowing base, reflecting
the maximum amount that may be outstanding under the Credit
Facility at any time, is currently $3.0 million. The borrowing base
will be re-determined on May 1, 2009 and thereafter semi-annually
each May 1 and November 1. If oil and natural gas prices
significantly decline for an extended period of time, Kodiak's
lenders could reestablish the borrowing base by evaluating the
Company's reserves at substantially lower oil and natural gas
prices. Such determination could result in a negative revision to
Kodiak's proved reserve value and reduce the Company's borrowing
base. Currently the facility is undrawn, and the Company has no
long-term debt. During the second quarter of 2008, the Company
entered into twoyear contracts for the use of two new-build
drilling rigs. The first rig was placed into operation in November
2008 and entails a two-year drilling commitment or specific
termination fees if drilling activity is cancelled. Agreement terms
require utilization of the rig and payment of day rates or the
payment of standby rates if the rig is not utilized. The estimated
termination fee for the first rig is approximately $5.3 million as
of December 31, 2008. The termination fee on the first rig will
continue to decrease as long as the rig remains active. Delivery of
the second rig has been placed on hold with the drilling
contractor. In the event Kodiak opts not to take delivery of the
rig, the termination fee could be up to $5.6 million and terms are
still being negotiated. Subsequent to the end of the fourth quarter
2008, Kodiak was able to negotiate with the drilling contractor an
approximate 20% reduction in rig day rates for the rig that is
currently operating. The current global economic and financial
crisis could lead to an extended national or global economic
recession. A slowdown in economic activity caused by a recession
would likely reduce national and worldwide demand for oil and
natural gas and result in lower commodity prices. Substantial
decreases in oil and natural gas prices could have a material
adverse effect on Kodiak's business, financial condition and
results of operations, could further limit the Company's access to
liquidity and credit and could hinder its ability to satisfy its
capital requirements. If Kodiak borrows funds, the Company will be
obligated to make periodic interest or other debt service payments
and may be subject to additional restrictive covenants. The ability
to borrow funds is dependent on a number of variables, including
the Company's proved reserves, and assumptions regarding the price
at which oil and natural gas can be sold. Should management seek to
raise additional capital through the issuance and sale of equity
securities, the sales, if successfully completed, may be at prices
below the market price of the Company's stock, and the Company's
shareholders may suffer significant dilution. This risk of dilution
is exacerbated by the current low market price for Kodiak common
stock. Capital and credit markets have experienced unprecedented
volatility and disruption during the last half of 2008 and continue
to be unpredictable. Given the current levels of market volatility
and disruption, the availability of funds from those markets has
diminished substantially. Further, arising from concerns about the
stability of financial markets generally and the solvency of
counterparties specifically, the cost of accessing the credit
markets has increased as many lenders have raised interest rates,
enacted tighter lending standards or altogether ceased to provide
funding to borrowers. Due to these capital and credit market
conditions, Kodiak cannot be certain that funding will be available
to the Company in amounts or on terms acceptable to the Company.
The Company's current cash balances and cash flow from operations
will not alone be sufficient to provide working capital to fully
fund the Company's original 2009 plan of operations. Accordingly,
the Company intends to pursue alternatives, such as joint ventures
with third parties or sales of interest in one or more of its
properties. Such transactions may result in a reduction in the
Company's operating interests or require the Company to relinquish
the right to operate the property. There can be no assurance that
any such transactions can be completed or that such transactions
will satisfy the Company's operating capital requirements. If the
Company is not successful in obtaining sufficient funding or
completing an alternative transaction on a timely basis on terms
acceptable to the Company, Kodiak would be required to curtail its
expenditures or restructure its operations, and the Company would
be unable to implement its original exploration and drilling
program, either of which would have a material adverse effect on
Kodiak's business, financial condition and results of operations.
Teleconference Call In conjunction with today's financial and
operating results, investors, analysts and other interested parties
are invited to participate in a conference call with management on
Thursday, March 12, 2009 at 11:00 a.m. Eastern Daylight Time. Date:
Thursday, March 12, 2009 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: 86552967 Internet: Live and
rebroadcast over the Internet
http://www.videonewswire.com/event.asp?id=56235 or at:
http://www.kodiakog.com/ Replay: Available through Tuesday, March
17, 2009 at (800) 642-1687 (US/Canada) and (706) 645-9291
(International) using Passcode 86552967 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 NYSE Alternext US 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-K for the
period ended December 31, 2008. KODIAK OIL & GAS CORP.
CONSOLIDATED BALANCE SHEETS December 31, December 31, ASSETS 2008
2007 ------ ---- ---- Current Assets: Cash and cash equivalents
$7,581,265 $13,015,318 Accounts receivable Trade 1,934,818
1,373,843 Accrued sales revenues 516,870 789,652 Prepaid expenses
and other 10,621,980 198,996 ---------- ------- Total Current
Assets 20,654,933 15,377,809 ---------- ---------- Oil and gas
properties (full cost method), at cost: Proved oil and gas
properties 97,934,058 77,272,437 Unproved oil and gas properties
11,985,533 21,904,737 Wells in progress 728,093 414,074
Less-accumulated depletion, depreciation, amortization, accretion
and asset impairment (92,804,911) (41,204,821) -----------
----------- Net oil and gas properties 17,842,773 58,386,427
---------- ---------- Other property and equipment, net of
accumulated depreciation of $270,620 in 2008 of $176,458 in 2007
272,705 312,017 Restricted investments 246,068 255,068 -------
------- Total Assets $39,016,479 $74,331,321 ===========
=========== LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------ Current Liabilities: Accounts
payable and accrued liabilities $4,125,335 $5,163,457 Advances from
joint interest owners 1,105,740 - --------- --------- Total Current
Liabilities 5,231,075 5,163,457 Noncurrent Liabilities: Asset
retirement obligation 787,180 874,498 ------- ------- Total
Liabilities 6,018,255 6,037,955 --------- --------- Commitments and
Contingencies - Note 7 Stockholders' Equity: Common stock - no par
value; unlimited authorized Issued and outstanding: 95,129,431
shares in 2008 and 87,992,926 shares in 2007 Contributed surplus
136,297,845 115,094,923 Accumulated deficit (103,299,621)
(46,801,557) ------------ ----------- Total Stockholders' Equity
32,998,224 68,293,366 ---------- ---------- Total Liabilities and
Stockholders' Equity $39,016,479 $74,331,321 ===========
=========== KODIAK OIL & GAS CORP. CONSOLIDATED STATEMENTS OF
OPERATIONS For the Years Ended December 31,
-------------------------------- 2008 2007 2006 ---- ---- ----
Revenues: Gas production $1,371,822 $1,053,331 $718,926 Oil
production 5,396,781 6,764,017 3,440,182 Interest 196,187 1,503,029
806,061 ------- --------- ------- Total revenue 6,964,790 9,320,377
4,965,169 --------- --------- --------- Cost and expenses: Oil and
gas production 3,578,580 1,757,717 964,685 Depletion, depreciation,
amortization and accretion 4,172,077 5,206,631 2,173,918 Asset
impairment 47,500,000 34,000,000 - General and administrative
8,175,472 7,334,386 4,580,598 (Gain)/loss on currency exchange
36,725 (792,467) 32,008 ------ -------- ------ Total costs and
expenses 63,462,854 47,506,267 7,751,209 ---------- ----------
--------- Net loss $(56,498,064) $(38,185,890) $(2,786,040)
============ ============ =========== Basic & diluted
weighted-average common shares outstanding 90,739,316 87,742,996
71,425,243 ========== ========== ========== Basic & diluted net
loss per common share $(0.62) $(0.44) $(0.04) ====== ====== ======
KODIAK OIL & GAS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, --------------------------------
2008 2007 2006 ---- ---- ---- Cash flows from operating activities:
Net loss $(56,498,064) $(38,185,890) $(2,786,040) Reconciliation of
net loss to net cash (used in) provided by operating activities:
Depletion, depreciation, amortization and accretion 4,172,077
5,206,631 2,173,918 Asset impairment 47,500,000 34,000,000 - Asset
retirement - (29,893) - Stock based compensation 3,551,433
2,452,291 1,527,361 Changes in current assets and liabilities:
Accounts receivable-trade (560,975) 503,342 (1,429,204) Accounts
receivable-accrued sales revenue 272,782 (122,661) (440,585)
Prepaid expenses and other (767,069) (95,289) (73,076) Accounts
payable and accrued liabilities 155,297 (1,655,119) 4,168,775
------- ---------- --------- Net cash (used in)/provided by
operating activities (2,174,519) 2,073,412 3,141,149 ----------
--------- --------- Cash flows from investing activities: Oil and
gas properties (11,209,258) (47,649,681) (35,426,830) Equipment
(54,850) (229,210) (52,976) Prepaid tubular goods (9,655,915) - -
Restricted investment: designated as restricted - (30,616) (82,052)
Restricted investment: undesignated as restricted 9,000 - 10,600
----- ----------- ------ Net cash (used in) investing activities
(20,911,023) (47,909,507) (35,551,258) ----------- -----------
----------- Cash flows from financing activity: Proceeds from the
issuance of shares 18,935,000 382,150 89,940,060 Issuance costs
(1,283,511) - (6,346,236) ---------- ------- ---------- Net cash
provided by financing activities 17,651,489 382,150 83,593,824
---------- ------- ---------- Net change in cash and cash
equivalents (5,434,053) (45,453,945) 51,183,715 Cash and cash
equivalents at beginning of the period 13,015,318 58,469,263
7,285,548 ---------- ---------- --------- Cash and cash equivalents
at end of the period $7,581,265 $13,015,318 $58,469,263 ==========
=========== =========== Supplemental cash flow information Oil
& gas property accrual included in accounts payable and accrued
liabilities $1,457,189 $1,544,868 $4,605,396 ========== ==========
========== Asset retirement obligation $(65,143) $526,868 $164,503
======== ======== ======== KODIAK OIL & GAS CORP. CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED) For the Quarters Ended
December 31, ---------------------- 2008 2007 ---- ---- Revenues:
Gas production $293,935 $302,740 Oil production 888,807 1,867,940
Interest 37,470 179,042 ------ ------- Total revenue 1,220,212
2,349,722 --------- --------- Cost and expenses: Oil and gas
production 456,613 560,078 Depletion, depreciation, amortization
and accretion 1,067,779 1,144,234 Asset impairment 32,000,000 -
General and administrative 1,686,534 1,953,837 (Gain)/loss on
currency exchange 17,224 (11,491) ------ ------- Total costs and
expenses 35,228,150 3,646,658 ---------- --------- Net loss
$(34,007,938) $(1,296,936) ============ =========== Basic &
diluted weighted-average common shares outstanding 90,739,316
87,742,996 ========== ========== Basic & diluted net loss per
common share $(0.37) $(0.01) ====== ====== Use of Non-GAAP
Financial Matters --------------------------------- In evaluating
its business, Kodiak considers earnings before interest, taxes,
depreciation, 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 its 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
ended Three months ended December 31, December 31, Reconciliation
of Adjusted EBITDA: 2008 2007 ---- ---- Net Loss $(34,007,938)
$(1,296,936) Add back: Depreciation, depletion, amortization and
accretion 1,067,779 1,144,234 Asset impairment 32,000,000 - (Gain)
/ loss on foreign currency exchange 17,224 (11,491) Stock based
compensation expense 809,121 762,914 --------- -------- Adjusted
EBITDA $(113,814) $598,721 ========= ======== Year ended Year ended
December 31, December 31, Reconciliation of Adjusted EBITDA: 2008
2007 ---- ---- Net Loss $(56,498,064) $(38,185,890) Add back:
Depreciation, depletion, amortization and accretion 4,172,077
5,206,631 Asset impairment 47,500,000 34,000,000 (Gain) / loss on
foreign currency exchange 36,725 (792,467) Stock based compensation
expense 3,551,433 2,452,291 ----------- ---------- Adjusted EBITDA
$(1,237,829) $2,680,565 =========== ========== 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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