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Kodiak Oil & Gas (KOG)

Kodiak Oil & Gas (KOG). Disclaimer: A core position in my portfolio. Overview. Kodiak Oil & Gas (KOG) An oil & gas exploration company that has 100% of its assets in the Bakken region of North Dakota. 192,000 Net Acres Current producing 42,000-44,000 Boe/d

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Kodiak Oil & Gas (KOG)

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  1. Kodiak Oil & Gas (KOG) Disclaimer: A core position in my portfolio

  2. Overview • Kodiak Oil & Gas (KOG) • An oil & gas exploration company that has 100% of its assets in the Bakken region of North Dakota. • 192,000 Net Acres • Current producing 42,000-44,000 Boe/d • 7 Operated Rigs (1-3 on demand rigs on standby)

  3. Overview (cont.) • Proved Reserves 144.0 MMBoe (86% Oil) • Within the 192,000 net acres, KOG has broken the land up into seven major areas of operation. Named after types of bears: Polar, Koala, Dunn, Grizzly, Smokey, Wildrose and Ursid. (Fun fact, Ursid is a mix between a grizzly and a black bear…don’t ask I was bored.) • KOG’s Capital expenditures (CAPEX) for 2014 is $940 million. This is expected to be put towards drilling 100 new wells, completion costs, water disposal and materials.

  4. Debt • Due to their extreme growth, debt had to be used. However, this organization has a very smart balance sheet and never over extends itself. The following is their debt and how it is managed. • $800m 8.125% Senior notes due 2019 • $700m 5.5% Senior Notes due 2021 • $800m 5.5% Senior Notes due 2022 • $1.35b in revolving credit ($700m used/$650m available)

  5. Position of production

  6. Margins • Margins are quite consistent • The overall earnings greatly depend on: • WTI Price • If oil can be moved by Pipeline, Rail or Truck • Taxes

  7. Margins of the Past Five Quarters

  8. Lack of Pipeline

  9. Exciting Future • Oil moving from the region to the refineries is where KOG can improve greatly on margins when more pipelines are built. • Lynn Peterson, Chairman and CEO of KOG is a true oil man. Many oil companies are built by businessmen at only look at the bottom line, which will work in most industries, not in oil. Mr. Peterson has over 30 years of experience in this industry. • In KOG infancy, Lynn Peterson, held the positions of President, VP, CFO, Chairman and CEO. Of course as the organization got larger he had to delegate. This business is in his blood, truly a good sign for any shareholder.

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