- 171% Increase in Oil Production - 137% Growth in Equivalent
Production - Vermillion Basin Amended Development Agreement
Announced - Second Drilling Rig Amendment DENVER, Aug. 6
/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 second quarter 2009. Second
Quarter Financial Results The Company reported a net loss for the
quarter ended June 30, 2009, of $538,000, or $0.01 per basic and
diluted share, compared with a net loss of $1.9 million, or $0.02
per basic and diluted share, for the same period in 2008. Oil and
gas sales were also flat quarter-over-quarter at $2.0 million.
Crude oil revenue accounted for approximately 94% of second quarter
2009 oil and gas sales, as compared to 77% in the same period in
2008. The Company grew quarterly production by 137%, but posted
flat revenue for the comparable quarterly periods which is
attributed to a 54% decrease in prices received for oil sales and
an 83% lower price received for sales of the Company's natural gas.
Further discussion is included in the Oil and Gas Sales section
below. For the second quarter 2009, Adjusted EBITDA was $583,000,
as compared to negative $665,000 for the same period in 2008. The
improvement in Adjusted EBITDA during the second quarter 2009 is
attributed primarily to a decrease in workover expense compared to
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 loss
are included in this news release and in the Company's Form 10-Q
for the quarter ended June 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 June 30, 2009. General
and administrative (G&A) expense decreased to $1.7 million for
the second quarter 2009, from $1.8 million for the same period in
2008. Included in the G&A expense for the 2009 period is a
stockbased compensation charge of $583,000 for options issued to
officers, directors and employees, as compared to $449,000 for the
same period in 2008. First Half 2009 For the six months ended June
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 $4.5 million,
or $0.05 per basic and diluted share, for the same period in 2008.
Total revenues for the first half of 2009 were $2.8 million, versus
$4.0 million for the same period in 2008. Oil and gas sales were
$2.8 million for the first half of 2009, as compared to $3.8
million in 2008. Crude oil revenue accounted for approximately 85%
of first-half 2009 oil and gas sales, as compared to 76% in the
same period in 2008. For the first six months of 2009, Adjusted
EBITDA was $91,000, as compared to negative $662,000 for the prior
first-half period. Net cash used in operating was $694,000 in the
first half of 2009, as compared to net cash used in operating
activities of $5.2 million in the prior-year period. Total assets
were $45.9 million at June 30, 2009, as compared to $39.0 million
at December 31, 2008. Stockholders' equity was $39.3 million at
June 30, 2009, as compared to $33.0 million at year-end 2008. The
Company's cash and cash equivalents position at June 30, 2009, was
$3.8 million and it currently has no long-term debt. In addition,
prepaid expenses, including tubular goods and surface equipment,
were $7.7 million and accounts receivable was $4.4 million, both at
June 30, 2009. Kodiak's total current assets at June 30, 2009 were
$15.9 million and its total current liabilities were $5.6 million,
providing working capital of $10.3 million. G&A expense
decreased to $3.6 million for the first half of 2009, from $4.3
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 $1.4 million for options issued to officers, directors
and employees, as compared to $2.0 million for the same period in
2008, a 30% decrease. The 17% G&A reduction for the period is
primarily due to an ongoing effort to reduce G&A costs
Company-wide. Due to Kodiak's ongoing cost-containment efforts, the
Company's G&A costs related to employee costs, travel, legal
and consulting expenses declined by approximately $138,000, or 6%,
during the first half of 2009, as compared to the same period in
2008. Oil and Gas Sales Kodiak's second quarter 2009 oil and gas
sales volumes increased by 137% to 45,000 barrels of oil equivalent
(BOE), as compared to 19,000 BOE in the same period in 2008. Oil
sales volumes improved by 171% to 35,000 barrels for the second
quarter 2009, as compared to 13,000 barrels in the same period in
2008. The growth in oil production is attributed to new Bakken oil
wells being brought on line during the second quarter of 2009. By
commodity in the second quarter of 2009, crude oil constituted 78%
of the production base. For the second quarter 2009, the average
gas price received decreased 83% to $2.20 per thousand cubic feet
of natural gas (Mcf), as compared to the $12.80 per Mcf received in
2008. On a quarter-over-quarter basis, the average price received
for crude oil fell by 54%. The Company sold its oil for $52.69 per
barrel during the second quarter 2009, as compared to the $115.42
per barrel received during the prior-year period. Kodiak currently
does not hedge any of its oil and gas production volumes. During
the first half of 2009, Kodiak invested $11.5 million in oil and
gas activities, of which $7.1 million was invested during the
second quarter 2009, primarily for the drilling and completion of
wells in its Bakken drilling program. During the first half of
2009, Kodiak drilled five wells and completed four wells as
producers. The Company now has working interests in 28 gross (15.74
net) wells, of which 18 gross (11.48. net) are Kodiak operated
wells. For the first half of 2009, oil and gas sales volumes
improved by 70% to 78,000 BOE, as compared to 46,000 BOE in the
same period in 2008. Oil sales volumes grew 79% to 52,000 barrels
for the first half of 2009, as compared to 29,000 barrels in the
same period in 2008. By commodity in the first six months of 2009,
crude oil constituted 66% of the production base, as compared to
63% in the prior-year period. For the first half of 2009, the
average gas price received decreased 71% to $2.60 per Mcf, as
compared to the $9.04 per Mcf received in 2008. The average price
received for crude oil in the first half of 2009 was also sharply
lower netting 55% less that in the same period in 2008. The Company
sold its crude oil for $45.48 per barrel during the first half of
2009, as compared to the $100.97 per barrel received during the
prior-year period. Williston Basin -- Dunn County, North Dakota
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's
Bakken shale leasehold position is located on the Fort Berthold
Indian Reservation (FBIR) in Dunn County, N.D. where all Company
drilling and completion activity has occurred in 2009. At June 30,
2009, Kodiak had approximately 54,000 gross and 37,000 net acres
under lease. Kodiak operates all of its leasehold on the
reservation excepting an approximate 7,000 net acres that are in a
participating area previously established with another operator.
Year-to-date, Kodiak Oil & Gas Corp. has drilled and completed
its first four wells targeting the middle member of the Bakken
Formation. In addition, the Company has one well currently being
completed, one awaiting completion and its seventh Middle Bakken
well, the Charging Eagle #1-22-10H, is drilling in the horizontal
lateral in the Charging Eagle area in the southeastern portion of
its FBIR leasehold. Estimated average daily net production for all
of Kodiak's producing properties for the month of July 2009 was 765
barrels of oil equivalent per day (BOE/d), as compared to the
average daily net production for the second quarter of 2009 of 521
BOE/d. Comparatively, average gross production for the FBIR
producing properties for July 2009 was 1,220 barrels of oil per day
(BO/d) operated and 470 BO/d net to Kodiak. There have been no gas
sales as the wells are not connected to a gas pipeline. The table
below summarizes Kodiak's 2009 activity on the FBIR. Kodiak Oil
& Gas Corp. FBIR Drilling and Completion Activities WI / NRI
Days Lateral Completion Well (%) to TD* Length Date ==== ========
====== ======= ========== MC #16-34-2H 60 /49 41 4,169' 4/23/2009
MC #16-34H 60 /49 36 4,150' 5/4/2009 TSB #16-8-7H 37.5 / 30.5 28
8,995' 6/7/2009 TSB #16-8-16H 50 /41 31 4,465' 6/18/2009 TSB
#14-33-28H 50 /41 31 8,313' 8/3/2009 TSB #14-33-6H 50 /41 26 4,163'
8/24/2009 CE #1-22-10H 55 /45 -- Approx. 9,000' -- CE #1-22-23H 60
/50 -- Approx. 5,000' -- TB #16-15-10H 60 /50 -- Approx. 9,000' --
Number of IP 24- First 30 Frac Hour Test Day Oil Well Stages
(BOE/D) Production Note ==== ========= ========= ========== ==== MC
#16-34-2H 8 711 8,397 Flowing Well MC #16-34H 5 1,394 13,406
Flowing Well TSB #16-8-7H 15 1,856 21,542 Flowing Well TSB
#16-8-16H 5 811 12,288 Flowing Well TSB #14-33-28H 15 -- --
Completing TSB #14-33-6H 6 -- -- Completing CE #1-22-10H -- --
Drilling Ahead CE #1-22-23H -- -- Spud after CE#1-22-10H TB
#16-15-10H -- -- Spud after CE#1-22-23H *Includes running liner in
the hole Second Half 2009 Outlook For the second half of 2009,
Kodiak intends to drill five additional gross wells on the FBIR and
complete five additional gross wells, including the two that are
currently being completed. The Company's working interest (WI)
ranges from 50% to 60% on the five wells. After all drilling and
completion operations are finished on each two-well pad , the
Company intends to provide periodic operations updates to apprise
investors as to the 2009 drilling program's progress. A further
discussion of Kodiak's liquidity and its capital expenditures is
included below. Events Subsequent to the End of the Second Quarter
2009 Vermillion Basin Effective August 1, 2009, the Company amended
an earlier agreement with Devon Energy Production Company, L.P.
("Devon"), a wholly owned subsidiary of Devon Energy Corp., whereby
Kodiak has assigned approximately 50% of its current interest in
its Vermillion Basin prospect area in southwest Wyoming to Devon.
In return, the Company will be carried for its remaining 25% WI in
two horizontal completions on wells that were drilled earlier, one
located in the Coyote Flats Unit and the other located in the
Horseshoe Basin Unit. Furthermore, the Company will be relieved of
all previously recorded indebtedness to Devon for costs associated
with earlier exploration expenditures that exceeded the $30 million
carried interest previously disclosed. Therefore, as of August 1,
2009, neither party will have amounts due to, nor due from, the
other party nor will the Company incur any further costs through
the completion, equipping or tying into sales of the two horizontal
wells mentioned above. Completion work has commenced and the wells
will be evaluated during the second half of 2009. The transaction
effectively eliminates any capital expenditure requirements by
Kodiak in the Vermillion Basin into 2010, while allowing the
Company to continue to control leasehold and to participate in the
play with its revised working interest. "A corporate strategy since
inception is to control an operated portfolio of both crude oil and
natural gas assets to hedge against hydrocarbon price volatility,"
said Lynn A. Peterson, Kodiak's President and CEO. "Commodity
prices command attention to rates of return for our oil and gas
projects. We are allocating our investment to the Bakken play where
oil production currently yields better per-well economics and
allows us to grow cash flow. The agreement with Devon is of
particular importance to Kodiak in that we have minimal financial
exposure, yet maintain our involvement in the Baxter shale play in
a non-operated capacity. We remain optimistic about the Vermillion
Basin's potential, especially given the enormous natural gas
resource the Baxter shale holds. Having a very capable, technically
savvy partner like Devon to advance this project, while we focus on
our Bakken oil projects, is a positive development for Kodiak and
its shareholders. We expect Rockies natural gas prices to improve
in the future and the Company will be positioned to participate in
the product price recovery." Drilling Rig During the second quarter
of 2008, the Company entered into 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 and
specific termination fees if drilling activity is cancelled or
never commenced. Under the terms of the drilling rig contract for
the second rig (the "Second Rig Contract"), Kodiak was initially
scheduled to take delivery of the second rig in February 2009 but,
effective August 2009, the Company and the contractor have agreed
to an amendment to the Second Rig Contract to defer such delivery.
Under the amendment, the Company will make monthly payments until
the earlier of delivery of the second rig or the expiration of 12
months totaling up to an aggregate of $1.9 million ("Delay
Payments"). If the Company takes delivery of the second rig during
this 12-month period, a portion of the Delay Payments may be
applied in the form of a credit against future operating charges
incurred by the Company under the Second Rig Contract, which has a
two-year drilling commitment. The actual amount of the credit will
decrease as time passes creating an incentive for the Company to
take delivery or locate a party to assume the rig commitment. In
the event that Kodiak does not take delivery of the rig before the
expiration of the 12-month period or cancels the Second Rig
Contract after delivery, it may be required to pay a termination
fee. The maximum termination fee payable by the Company would be
$5.6 million, against which, under certain circumstances, some or
all of the Delay Payments may be applied in the form of a credit.
"We appreciate the effort put forth by the drilling contractor to
assist Kodiak through a difficult period," Mr. Peterson continued.
"The rig we are currently running is excellent iron and continues
to exceed our expectations. Commodity prices and capital needs
notwithstanding, it is our goal to put the second rig to work in
the future. This agreement will allow us to satisfy part of the
commitment through operating cash flow and affords us an
opportunity to evaluate our well performance while continuing to
secure additional drilling permits moving into 2010. At the same
time, this arrangement will provide the contractor a manageable
stream of capital to help offset any potential termination fee."
Acreage Sell-Down During July 2009, Kodiak closed on a previously
announced agreement to acquire additional interests in the Tall
Bear prospect area. Separately, the Company entered into a joint
venture arrangement with a private industry partner pursuant to
which Kodiak conveyed certain of its leasehold to the joint venture
partner resulting in a sell-down of 3,300 net acres to Kodiak's
leasehold in the Charging Eagle and Tall Bear prospects,
collectively referred to as the Twin Buttes area. After netting out
the costs to acquire the additional interests in the Tall Bear
prospect area, Kodiak realized $1.85 million in cash from the
sell-down, and will pay 50% of the first five wells drilled in the
Twin Buttes area for its 60% WI, proportionally reduced. "We are
delighted to have our new partner participating with us in drilling
the southeastern block of our FBIR leasehold," said Mr. Peterson.
"As the southern block represents about 30% of our leasehold, these
are important delineation wells. By selling down certain of our
interest, it maintains the Kodiak working interest in the 50%-60%
range, which allows us to operate while adhering to our capital
expenditure budget." Liquidity and Capital Resources During the
first six months of 2009, Kodiak invested approximately $11.5
million in developing its oil and gas properties on the FBIR.
Kodiak initially anticipated total net capital expenditures of up
to $15.3 million in 2009, compared to approximately $11.0 million
incurred in 2008. Kodiak originally estimated that, of the $15.3
million total projected expenditures, $4.0 million would be
allocated to the Vermillion Basin and the remaining $11.3 million
would be allocated to the Williston Basin. However, due to the
previously discussed amended Vermillion Basin agreement, it is now
anticipated that actual 2009 expenditures in the Vermillion Basin
will be minimal. Accordingly, the capital expenditures initially
contemplated for the Vermillion Basin will be reallocated to the
Williston Basin. The Company continues to evaluate and monitor its
capital expenditures in relation to commodity prices and Kodiak's
2009 expenditures are expected to increase from the previously
announced $15.3 million budget in 2009. The Company believes it has
the financial capacity to continue drilling and completion
operations on the FBIR into the first part of 2010, based upon its
June 30, 2009 working capital position, the transactions that have
improved working capital subsequent to the end of the second
quarter, the current costs of drilling and completing wells,
combined with expected growth in cash flow from operations based
upon current commodity prices. Kodiak ended the second quarter of
2009 with cash and cash equivalents of approximately $3.8 million
and total working capital of $10.3 million. As of June 30, 2009,
Kodiak had prepaid $7.5 million towards the cost of tubular goods,
including $6.0 million of tubular goods that are inventoried in
third-party yards and $1.5 million of deposits for tubular goods
that will be delivered later this year. Commenting on liquidity and
capital resources Mr. Peterson said, "We have successfully closed
key transactions subsequent to the end of the second quarter to
improve our working capital position. Through the amended
Vermillion Basin agreement and the acreage sell-down in the Twin
Buttes area, we have improved our working capital position by
approximately $3 million. Furthermore, we have promoted partners
into the project that will help reduce our capital requirements. We
are also pleased with the agreement we have reached with the
drilling contractor in an effort to satisfy our obligation via an
arrangement that is quantifiable to our investors, which we believe
will remove the perceived rig liability overhang. We can now focus
on further improving our capital resources and work to secure
additional drilling permits on the FBIR in the ideal event that we
are capable of taking delivery of the second rig before August
2010." 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,
August 7, 2009 at 11:00 a.m. Eastern Daylight Time. Kodiak Oil
& Gas Corp. Second Quarter 2009 Financial and Operating Results
Conference Call Date: Friday, August 7, 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; Passcode: 19101819 Internet: Live
and rebroadcast over the Internet
http://www.videonewswire.com/event.asp?id=60259 or at
http://www.kodiakog.com/ Replay: Available through Wednesday,
August 12, 2009 at (800) 642-1687 (US/Canada) and (706) 645-9291
(International) using passcode 19101819 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 June 30, 2009 filed with
the Securities and Exchange Commission on August 6, 2009. KODIAK
OIL & GAS CORP. CONSOLIDATED BALANCE SHEETS (Unaudited) June
30, December 31, ASSETS 2009 2008 ------ ---- ---- Current Assets:
Cash and cash equivalents $3,821,907 $7,581,265 Accounts receivable
Trade 2,733,630 1,934,818 Accrued sales revenues 1,637,322 516,870
Prepaid expenses and other 7,722,543 10,621,980 ---------
---------- Total Current Assets 15,915,402 20,654,933 ----------
---------- Oil and gas properties (full cost method), at cost:
Proved oil and gas properties 106,438,597 97,934,058 Unproved oil
and gas properties 12,530,735 11,985,533 Wells in progress
4,369,900 728,093 Less-accumulated depletion, depreciation,
amortization, accretion and asset impairment (93,592,216)
(92,804,911) ----------- ----------- Net oil and gas properties
29,747,016 17,842,773 ---------- ---------- Other property and
equipment, net of accumulated depreciation of $249,998 in 2009 and
$270,620 in 2008 220,371 272,705 Restricted investments - 246,068
--- ------- Total Assets $45,882,789 $39,016,479 ===========
=========== LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------ Current Liabilities: Accounts
payable and accrued liabilities - Note 9 $5,114,238 $4,125,335
Advances from joint interest owners 492,806 1,105,740 -------
--------- Total Current Liabilities 5,607,044 5,231,075 Noncurrent
Liabilities: Asset retirement obligation 976,026 787,180 -------
------- Total Liabilities 6,583,070 6,018,255 --------- ---------
Commitments and Contingencies - Note 5 Stockholders' Equity: Common
stock - no par value; unlimited authorized Issued and outstanding:
104,729,431 shares in 2009 and 95,129,431 shares in 2008
Contributed surplus 144,765,100 136,297,845 Accumulated deficit
(105,465,381) (103,299,621) ------------ ------------ Total
Stockholders' Equity 39,299,719 32,998,224 ---------- ----------
Total Liabilities and Stockholders' Equity $45,882,789 $39,016,479
=========== =========== KODIAK OIL & GAS CORP. CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) Three months For the Six
Months ended June 30, Ended June 30, --------------------
----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues:
Gas production $129,329 $462,218 $411,803 $928,083 Oil production
1,860,808 1,501,588 2,356,066 2,913,894 Interest & other 22,893
36,884 36,520 120,250 ------ ------ ------ ------- Total revenue
2,013,030 2,000,690 2,804,389 3,962,227 --------- ---------
--------- --------- Cost and expenses: Oil and gas production
343,674 1,282,618 492,203 2,265,569 Depletion, depreciation,
amortization and accretion 532,454 786,777 887,794 1,884,076
General and administrative 1,680,344 1,831,508 3,596,295 4,326,551
(Gain)/loss on currency exchange (5,288) (1,772) (6,142) 16,508
------ ------ ------ ------ Total costs and expenses 2,551,184
3,899,131 4,970,150 8,492,704 --------- --------- ---------
--------- Net loss $(538,154) $(1,898,441) $(2,165,761)
$(4,530,477) ========= =========== =========== =========== Basic
& diluted weighted-average common shares outstanding
100,235,806 88,033,107 97,696,724 88,013,019 =========== ==========
========== ========== Basic & diluted net loss per common share
$(0.01) $(0.02) $(0.02) $(0.05) ====== ====== ====== ====== KODIAK
OIL & GAS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Six Months Ended June 30, 2009 2008 ---- ---- Cash
flows from operating activities: Net loss $(2,165,761) $(4,530,477)
Reconciliation of net loss to net cash (used in) provided by
operating activities: Depletion, depreciation, amortization and
accretion 887,794 1,884,076 Stock based compensation 1,375,080
1,967,511 Changes in current assets and liabilities: Accounts
receivable-trade (798,812) (776,323) Accounts receivable-accrued
sales revenue (1,120,452) (53,118) Prepaid expenses and other
1,750,921 (1,941,424) Accounts payable and accrued liabilities
(622,402) (1,720,237) -------- ---------- Net cash (used in)
operating activities (693,632) (5,169,992) -------- ---------- Cash
flows from investing activities: Oil and gas properties (9,407,721)
(9,171,252) Sale of oil and gas properties - 2,437,892 Equipment
8,000 (2,124) Prepaid tubular goods (993,413) - Restricted
investment: undesignated as restricted 235,233 10,835 -------
------ Net cash (used in) investing activities (10,157,901)
(6,724,649) ----------- ---------- Cash flows from financing
activity: Proceeds from the issuance of shares 7,200,000 78,750
Issuance costs (107,825) - -------- --- Net cash provided by
financing activities 7,092,175 78,750 --------- ------ Net change
in cash and cash equivalents (3,759,358) (11,815,891) Cash and cash
equivalents at beginning of the period 7,581,265 13,015,318
--------- ---------- Cash and cash equivalents at end of the period
$3,821,907 $1,199,427 ========== ========== Supplemental cash flow
information Oil & gas property accrual included in Accounts
payable and accrued liabilities $2,455,560 $1,338,899 ==========
========== Asset retirement obligation $139,290 $(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 ended Three months
ended June 30, June 30, Reconciliation of Adjusted EBITDA: 2009
2008 ---- ---- Net Loss $(538,154) $(1,898,441) Add back:
Depreciation, depletion, amortization and accretion 532,454 786,777
(Gain) / loss on foreign currency exchange (5,288) (1,772) Stock
based compensation expense 593,690 448,701 -------- ---------
Adjusted EBITDA $582,702 $(664,735) ======== ========= Year-to-date
Year-to-date June 30, June 30, Reconciliation of Adjusted EBITDA:
2009 2008 ---- ---- Net Loss $(2,165,761) $(4,530,477) Add back:
Depreciation, depletion, amortization and accretion 887,794
1,884,076 (Gain) / loss on foreign currency exchange (6,142) 16,508
Stock based compensation expense 1,375,080 1,967,511 -------
--------- Adjusted EBITDA $90,971 $(662,382) ======= =========
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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