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8-K - 8-K - Whiting Canadian Holding Co ULCa8-k08x01x2013q22013pressr.htm


EXHIBIT 99.1
Kodiak Oil & Gas Corp. Announces
Second Quarter 2013 Results

Highlights Include:
Q2-13 Oil & Gas Sales of $173.5 Million, 102% Increase from Q2-12 and a 5% Increase from Q1-13
Q2-13 Adjusted EBITDA of $131.1 Million, 94% Growth from Q2-12 and a 5% Increase from Q1-13

DENVER - August 1, 2013 /PRNewswire-FirstCall/ -- Kodiak Oil & Gas Corp. (NYSE: KOG), an oil and gas exploration and production company with primary assets in the Williston Basin of North Dakota, today reported financial results for the second quarter 2013 ended June 30, 2013. The Company furnished an operations update and reported sales volumes in a news release on July 23, 2013.

Financial Results

For the second quarter-ended June 30, 2013, the Company reported oil and gas sales of $173.5 million, as compared to $85.8 million during the same period in 2012 and $165.1 million in the first quarter 2013, representing increases of 102% and 5%, respectively. Kodiak reported an overall 8% increase in quarter-over-quarter equivalent sales volumes with 2.1 million barrels of oil equivalent (MMBOE) sold, or an average of 23,200 BOE per day (BOE/d) during the second quarter 2013, as compared to 1.9 million BOE, or an average of 21,700 BOE/d in the first quarter of 2013. Crude oil revenue accounted for approximately 94% of oil and gas sales recorded during the second quarter 2013.

Adjusted EBITDA, a non-GAAP measure, was $131.1 million for the second quarter 2013, as compared to $67.7 million in the same period in 2012, reflecting a 94% increase. Kodiak defines Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depletion, depreciation, amortization, and accretion, (iv) amortization of deferred financing costs and debt premium, (v) impairment, (vi) non-cash expenses relating to share based payments recognized under ASC Topic 718, and (vii) pre-tax unrealized gains and losses on commodity price risk management activities.

Kodiak reported net cash provided by operating activities during the second quarter 2013 of $118.3 million, as compared to $44.7 million during the same period in 2012, an increase of 165%. Kodiak reported net cash provided by operating activities during the six-month period ended June 30, 2013 of $232.9 million, as compared to $113.8 million in 2012.
  
For the second quarter 2013, the Company reported net income of $44.3 million, or $0.17 per diluted share, compared to net income of $93.1 million, or $0.35 per diluted share, for the same period in 2012. Net income for the second quarter 2013 includes an unrealized gain of $20.9 million related to the mark-to-market of derivative instruments used for commodity hedging. The net effect, after-tax, of the non-cash hedging activities increased Kodiak's reported net income for the second quarter 2013 by $0.05 per basic and diluted share. Detailed disclosure of the Company's derivative contracts is available in its filing on Form 10-Q for the second quarter ended June 30, 2013. By way of comparison, the net income for the second quarter 2012 included unrealized derivative gains of $91.7 million attributed to the mark-to-market of derivative instruments, which increased Kodiak's reported net income for the quarter by $0.25 per basic and diluted share.

General and administrative expenses (G&A) for the second quarter 2013 totaled $10.3 million, or $4.89 per BOE, compared to $8.1 million, or $7.05 per BOE, in the second quarter 2012.  The increase in total G&A expense for the second quarter 2013, as compared






to the same period in 2012, is attributed primarily to the hiring of new personnel as the Company continues to expand its oil and gas operations. G&A expense on a per unit basis improved sequentially from $5.28/BOE in the first quarter of 2013 to $4.89/BOE in the second quarter primarily attributable to increased production. As of June 30, 2013, Kodiak had 134 employees, as compared to 100 employees as of June 30, 2012.

Lease operating expenses (LOE) for the second quarter 2013 totaled $13.4 million or $6.33 per BOE, a 13% increase per BOE over the second quarter 2012 and a decrease of 8% over the first quarter of 2013.  The Company continued its efforts to decrease operating costs by addressing its water disposal costs, the largest component of LOE. While most of the projected disposal wells have been drilled through the first half of 2013, gathering and connection work continues which should help further reduce these costs. These projects are expected to reduce the Company's dependence on third-party services and minimize trucking requirements.
       
During the second quarter ended June 30, 2013, Kodiak recognized total interest expense related to its outstanding senior notes and credit facility of approximately $15.8 million. The Company capitalized interest costs of $7.4 million for the second quarter 2013.
The following table summarizes the Company's costs on a per-unit basis for the periods shown:
Kodiak Oil & Gas Corp.
 
 
 
 
% Change
Unit Cost Analysis
Q2-13
Q1-13
Q2-12
 
Sequential
Q-o-Q
Sales Volumes in Barrels of Oil Equivalent (MBOE)
2,112
1,953
1,155
 
8%
83%
Average Price Received Oil ($/Bbl)
$88.88
$90.80
$78.93
 
(2)%
13%
Average Price Received Gas ($/Mcf)
6.16
6.48
5.05
 
(5)%
22%
Average Price Received BOE ($/BOE)
$82.15
$84.51
$74.23
 
(3)%
11%
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
Lease Operating Expense ($/BOE)
$6.33
$6.90
$5.60
 
(8)%
13%
Production Tax ($/BOE)
8.77
9.08
7.80
 
(3)%
12%
DD&A Expense ($/BOE)
29.56
29.38
29.59
 
1%
—%
Gathering, Transportation & Marketing Expense ($/BOE)
2.67
2.45
1.49
 
9%
79%
Total G&A Expense ($/BOE)
4.89
5.28
7.05
 
(7)%
(31)%
Non-cash Stock-based Compensation Expense ($/BOE)
$1.66
$1.91
$2.30
 
(13)%
(28)%

Second Quarter 2013 Capital Expenditures

During the second quarter 2013, Kodiak invested approximately $248.7 million related to its oilfield operations and leasehold acquisitions. The Company expended $204.1 million on its operated properties, $35.3 million on non-operated wells and $9.3 million was invested in infrastructure and acreage acquisitions.

Following the July 2013 acquisition, Kodiak operates seven rigs and continues to experience increased drilling and completion efficiencies resulting in faster spud-to-sales times and improving well costs.

2






 
 
 
 
Six Months
 
Full Year
Kodiak Oil & Gas Corp.
Quarter Ended
 
Ended
 
2,013
Capital Expenditures ($MM)
June 30, 2013
March 31, 2013
 
June 30, 2013
 
Revised Budget
Operated drilling and completion costs
$
204.1

$
210.5

 
$
414.6

 
$
825.0

Non-operated drilling and completion costs
35.3

38.5

 
73.8

 
140.0

Salt water disposal wells and facilities
7.6

5.2

 
12.8

 
23.0

Leasehold acquisitions
1.7

1.9

 
3.6

 
12.0

Total Capital Expenditures
$
248.7

$
256.1

 
$
504.8

 
$
1,000.0

 
 
 
 
 
 
 
Asset retirement obligations
$
1.1

$
0.5

 
$
1.6

 
 
Capitalized interest
7.4

8.5

 
15.9

 
 
Total Capitalized Costs
$
257.2

$
265.1

 
$
522.3

 
 

Interim Operations Update

Williston Basin Drilling and Completion Update

Pro forma for the recently closed July 2013 acquisition, Kodiak operated, or had an interest in, a total of 530 gross (195.3 net) Williston Basin producing wells, owned approximately 196,000 net leasehold acres and operated seven drilling rigs along with one 24-hour dedicated completion crew, and two additional completion crews working on an as-needed basis. The Company expects 25 net operated wells to be completed during the third quarter of 2013.

Kodiak's program to test 12 wells within a 1,280-acre drilling spacing unit (DSU) continues on schedule in the Polar and Smokey operating areas. All wells in the Polar project area in southern Williams County have been completed and are on production.

The following table summarizes well completion results for the Polar downspacing pilot wells recently completed:
Recent Operated Well Completions
 
 
WI/
 
IP 24-hour Test (BOE/d)
Choke
 
Well Name
County
NRI (%)
Formation
 BOPD
MMcf/d
BOE/d
Size "
PSI
P Wood 154-98-2-27-34-15H
Williams
99 / 79
Bakken
2,017
4.06
2,693
40/64
1,492
P Wood 154-98-2-27-34-16H
Williams
99 / 79
Bakken
2,197
4.29
2,912
37/64
1,884
P Wood 154-98-2-27-34-16H3A
Williams
99 / 79
Three Forks
1,806
2.39
2,205
33/64
2,224
P Wood 154-98-2-27-34-16H3B
Williams
99 / 79
Three Forks
1,890
3.81
2,525
36/64
1,807
P Wood 154-98-3-27-34-14H
Williams
99 / 79
Bakken
1,824
3.48
2,403
34/64
1,958
P Wood 154-98-3-27-34-14H3
Williams
99 / 79
Three Forks
1,860
3.58
2,457
41/64
2,071
P Wood 154-98-3-27-34-15H
Williams
99 / 79
Bakken
2,085
3.48
2,666
36/64
2,108
P Wood 154-98-3-27-34-15H3M**
Williams
99 / 79
Three Forks
915
1.53
1,204
36/64
1,857
P Wood 154-98-4-27-34-13H3
Williams
99 / 79
Three Forks
2,556
5.55
3,482
37/64
2,150
P Wood 154-98-4-27-34-14H3
Williams
99 / 79
Three Forks
1,622
4.00
2,289
38/64
2,254
P Wood 154-98-4-27-34-13HA
Williams
99 / 79
Bakken
2,118
3.92
2,771
35/64
1,946
P Wood 154-98-4-27-34-13HB
Williams
99 / 79
Bakken
2,272
4.26
2,982
36/64
2,118
Average
 
 
 
1,990
3.70
2,549
 
1,989
** Restricted surface facilities during initial flow period
 
 
 
 
 

Management Comment

Commenting on recent developments, Kodiak's Chairman and CEO Lynn Peterson said:  "While we are providing the initial production rates from our Polar downspacing project, it is still too early to project the ultimate outcome of our study. We are encouraged that we did not see significant communication between wells during the stimulation procedures which should bode well for tighter spacing, but caution that we need additional production data and information from our micro seismic and core evaluation work. We intend to update our shareholders as we gain sufficient data. We believe the work
3





being performed by our entire team should result in continued growth in production, cash flow and reserves for our shareholders and we are very excited for the second half of 2013.

“We are pleased with the progress that we achieved during the second quarter. We are on course to deliver accelerating production growth in the second half of the year and into 2014.   Our team has demonstrated great dedication with the recent July 2013 acquisition of properties and is working diligently to integrate them into our operations. Our land group has made significant progress in a short period to improve our working interests in the acquired lands through trades and acquisitions as well as divesting of properties not associated with our core operational areas. Our drilling program continues to see efficiency gains with fewer drilling days which, when combined with improved third-party service costs, is helping to drive down our well costs below $10 million. 

“As Kodiak continues to grow its asset base it also continues to add qualified people to its staff, both in the corporate office and in the field. We try to identify individuals that can make a difference at our Company. To the financial community, the Company is pleased to announce the addition of two new members of our finance team. Aaron Gaydosik recently joined the Company as Vice President - Finance. Aaron most recently served as a Director in the Oil & Gas group at Credit Suisse where he spent the past six years focused on capital markets and advisory transactions primarily for exploration and production companies.  He will assume much of the banking and capital markets responsibilities at Kodiak. Trevor Seelye has also joined the Company as Director of Financial Planning & Investor Relations. Trevor most recently served as an Associate Research Analyst at Wells Fargo. His primary responsibilities will be budgeting, forecasting and investor relations. We welcome all of our new staff members as we continue to build out a great team.”

Q2-13 Results Teleconference Call

In conjunction with Kodiak's release of its financial and operating results, investors, analysts and other interested parties are invited to participate in a conference call with management on Friday, August 2, 2013 at 11:00 a.m. Eastern Daylight Time.
Kodiak Oil & Gas Corp. Q2-13 Financial and Operating Results Conference Call
Date:
August 2, 2013
Time:
11:00 a.m. EDT
10:00 a.m. CDT
  9:00 a.m. MDT
  8:00 a.m. PDT
Call:
(888) 647-1602 (US/Canada) and (706) 902-2175 (International); Passcode: 14851535
Internet:
Live and rebroadcast over the Internet: http://us.meeting-stream.com/kodiakoilgascorp_080213  
Replay:
Available through Tuesday, August 20, 2013 at (855) 859-2056 (US/Canada)
and (404) 537-3406 (International) using passcode: 14851535 and for 30 days at www.kodiakog.com or http://us.meeting-stream.com/kodiakoilgascorp_080213 

Upcoming Investor Conferences

Kodiak also today announced management's participation in upcoming investor conferences.
Conference
City
Date
Time
Webcast Link
Tuohy Brothers 4th Annual Energy Conference
New York
Aug. 5, 2013
8:00 AM EDT
No Webcast
Barclay's CEO Energy Conference
New York
Sept. 11, 2013
3:05 PM EDT
TBD
Credit Suisse SMID Conference
New York
Sept. 18, 2013
TBD
TBD
Imperial Capital Global Opportunities Conference
New York
Sept. 19, 2013
TBD
TBD
Deutsche Bank SMID Conference
Boston
Sept. 24, 2013
TBD
TBD
Johnson Rice Energy Conference
New Orleans
Oct. 1, 2013
TBD
TBD
Deutsche Bank Leveraged Finance Conference
Phoenix
Oct. 2, 2013
TBD
TBD

4







Presentation times and webcasting are subject to change at the discretion of the conference organizer.  Please reference Kodiak's Presentations & Events page for further details regarding conferences and other events in which the Company may elect to participate.

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 primarily in the Williston Basin in the U.S. Rocky Mountains. For further information, please visit www.kodiakog.com. The Company's common shares are listed for trading on the New York Stock 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 expectations as to its growth and development including trends in production, cash flow and reserves, the Company's expectations regarding potential improvements in LOE, the Company's drilling and completion program, including timing and improvements in per-well costs, and trends in the availability and cost of oil field services. 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.
 
For further information, please contact:

Mr. Lynn A. Peterson, CEO and President, Kodiak Oil & Gas Corp. +1-303-592-8075
Mr. Trevor P. Seelye, CFA, Director of Financial Planning & Investor Relations +1-720-399-3282
Mr. David P. Charles, Sierra Partners LLC +1-303-757-2510 x11

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 quarter-ended June 30, 2013.

5







KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
 
June 30, 2013
 
December 31, 2012
ASSETS
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
14,072

 
$
24,060

Accounts receivable
 
 
 
 
Trade
 
37,821

 
35,565

Accrued sales revenues
 
66,910

 
59,875

Commodity price risk management asset
 
4,162

 
10,864

Inventory, prepaid expenses and other
 
20,020

 
17,210

Total Current Assets   
 
142,985

 
147,574

 
 
 
 
 
Oil and gas properties (full cost method), at cost:
 
 
 
 
Proved oil and gas properties
 
2,575,580

 
2,007,442

Unproved oil and gas properties
 
412,035

 
457,888

Equipment and facilities
 
27,190

 
20,954

Less-accumulated depletion, depreciation, amortization, and accretion
 
(409,105
)
 
(290,094
)
Net oil and gas properties   
 
2,605,700

 
2,196,190

 
 
 
 
 
Cash held in escrow
 
51,000

 

Commodity price risk management asset
 
10,025

 
2,850

Property and equipment, net of accumulated depreciation of $1,456 at June 30, 2013 and $1,113 at December 31, 2012
 
2,288

 
1,846

Deferred financing costs, net of amortization of $20,058 at June 30, 2013 and $17,995 at December 31, 2012
 
31,347

 
25,176

 
 
 
 
 
Total Assets   
 
$
2,843,345

 
$
2,373,636

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current Liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
198,042

 
$
190,596

Accrued interest payable
 
14,670

 
6,090

Commodity price risk management liability
 
1,337

 
304

Total Current Liabilities   
 
214,049

 
196,990

 
 
 
 
 
Noncurrent Liabilities:
 
 
 
 
Credit facility
 
291,000

 
295,000

Senior notes, net of accumulated amortization of bond premium of $695 at June 30, 2013 and $378 at December 31, 2012
 
1,155,305

 
805,622

Commodity price risk management liability
 

 
4,288

Deferred tax liability, net
 
65,700

 
26,800

Asset retirement obligations
 
11,122

 
9,064

Total Noncurrent Liabilities   
 
1,523,127

 
1,140,774

 
 
 
 
 
Total Liabilities   
 
1,737,176

 
1,337,764

 
 
 
 
 
Stockholders’ Equity:
 
 
 
 
Common stock—no par value; unlimited authorized
 
 
 
 
Issued and outstanding: 265,566,224 shares as of June 30, 2013 and 265,273,314 shares as of December 31, 2012
 
1,015,281

 
1,008,678

Retained earnings
 
90,888

 
27,194

Total Stockholders’ Equity   
 
1,106,169

 
1,035,872

 
 
 
 
 
Total Liabilities and Stockholders’ Equity   
 
$
2,843,345

 
$
2,373,636


6







KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
2013
 
2012
 
2013
 
2012
Revenues:
 
 
 
 
 
 
 
 
Oil sales
 
$
163,369

 
$
82,390

 
$
319,212

 
$
159,204

Gas sales
 
10,109

 
3,378

 
19,316

 
6,500

Total revenues
 
173,478

 
85,768

 
338,528

 
165,704

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Oil and gas production
 
37,531

 
17,200

 
73,522

 
34,500

Depletion, depreciation, amortization and accretion
 
62,409

 
34,189

 
119,794

 
60,484

General and administrative
 
10,326

 
8,142

 
20,628

 
16,040

Total operating expenses
 
110,266

 
59,531

 
213,944

 
111,024

 
 
 
 
 
 
 
 
 
Operating income
 
63,212

 
26,237

 
124,584

 
54,680

 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
Gain on commodity price risk management activities
 
22,667

 
95,572

 
6,923

 
72,232

Interest income (expense), net
 
(15,785
)
 
(3,541
)
 
(29,595
)
 
(8,168
)
Other income
 
256

 
724

 
682

 
1,992

Total other income (expense)
 
7,138

 
92,755

 
(21,990
)
 
66,056

 
 
 
 
 
 
 
 
 
Income before income taxes
 
70,350

 
118,992

 
102,594

 
120,736

 
 
 
 
 
 
 
 
 
Income tax expense
 
26,100

 
25,920

 
38,900

 
25,920

 
 
 
 
 
 
 
 
 
Net income
 
$
44,250

 
$
93,072

 
$
63,694

 
$
94,816

 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.17

 
$
0.35

 
$
0.24

 
$
0.36

Diluted
 
$
0.17

 
$
0.35

 
$
0.24

 
$
0.35

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
265,434,514

 
263,576,093

 
265,381,746

 
263,118,367

Diluted
 
267,906,171

 
267,558,510

 
267,851,680

 
267,419,601


7







KODIAK OIL & GAS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 Three Months Ended June 30,
 
   Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
   Net income
$
44,250

 
$
93,072

 
$
63,694

 
$
94,816

Reconciliation of net income to net cash
 
 
 
 
 
 
 
         provided by operating activities:
 
 
 
 
 
 
 
     Depletion, depreciation, amortization and accretion
62,409

 
34,189

 
119,794

 
60,484

     Amortization of deferred financing costs and debt premium
828

 
617

 
1,746

 
1,257

     Unrealized gain on commodity price risk
 
 
 
 
 
 
 
         management activities, net
(20,910
)
 
(91,700
)
 
(3,728
)
 
(73,084
)
     Stock-based compensation
3,501

 
2,655

 
7,225

 
5,090

     Deferred income taxes
26,100

 
25,920

 
38,900

 
25,920

  Changes in current assets and liabilities:
 
 
 
 
 
 
 
     Accounts receivable-trade
12,859

 
9,094

 
(2,154
)
 
581

     Accounts receivable-accrued sales revenue
2,404

 
(787
)
 
(7,035
)
 
(16,996
)
     Prepaid expenses and other
(320
)
 
2,746

 
(186
)
 
1,822

     Accounts payable and accrued liabilities
(1,425
)
 
(17,647
)
 
6,068

 
11,010

     Accrued interest payable
(11,365
)
 
(13,447
)
 
8,580

 
(480
)
     Cash held in escrow

 

 

 
3,343

 Net cash provided by operating activities
118,331

 
44,712

 
232,904

 
113,763

 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
     Acquired oil and gas properties and facilities

 

 

 
(588,420
)
     Oil and gas properties
(245,170
)
 
(197,449
)
 
(520,312
)
 
(332,311
)
     Equipment, facilities and other
(2,955
)
 
(2,883
)
 
(7,020
)
 
(6,774
)
     Tubular goods
(1,635
)
 
(7,576
)
 
(2,298
)
 
(7,576
)
     Cash held in escrow
(51,000
)
 

 
(51,000
)
 
30,000

Net cash used in investing activities
(300,760
)
 
(207,908
)
 
(580,630
)
 
(905,081
)
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
     Borrowings under credit facilities
191,000

 
85,000

 
354,875

 
85,000

     Repayments under credit facilities

 
(85,000
)
 
(358,875
)
 
(185,000
)
     Proceeds from the issuance of senior notes

 
156,000

 
350,000

 
156,000

     Proceeds from the issuance of common shares
230

 
137

 
490

 
1,245

     Purchase of common shares

 

 
(518
)
 

     Cash held in escrow

 

 

 
670,615

     Debt and share issuance costs
(1,314
)
 
(4,350
)
 
(8,234
)
 
(4,650
)
Net cash provided by financing activities
189,916

 
151,787

 
337,738

 
723,210

 
 
 
 
 
 
 
 
Increase (decrease) in cash and cash equivalents
7,487

 
(11,409
)
 
(9,988
)
 
(68,108
)
 
 
 

 
 
 
 
Cash and cash equivalents at beginning of the period
6,585

 
24,905

 
24,060

 
81,604

 
 
 
 
 
 
 
 
Cash and cash equivalents at end of the period
$
14,072

 
$
13,496

 
$
14,072

 
$
13,496

 
 
 
 
 
 
 
 
Supplemental cash flow information:
 
 
 
 
 
 
 
  Oil & gas property accrual included in
 
 
 
 
 
 
 
       accounts payable and accrued liabilities
$
155,032

 
$
71,097

 
$
155,032

 
$
71,097

  Oil & gas property acquired through common stock

 

 

 
$
49,798

  Cash paid for interest
$
33,732

 
$
34,274

 
$
35,190

 
$
37,810

  Cash paid for income taxes

 

 

 


8







In evaluating its business, Kodiak considers earnings before interest, income taxes, depletion, depreciation, amortization, and accretion, amortization of deferred financing costs and debt premium, impairment, gains or losses on foreign currency, gains or losses on commodity price risk management activities, and stock‑based compensation expense, (“Adjusted EBITDA”) as a key indicator of financial operating performance and as a measure of the ability to generate cash for operational activities, future capital expenditures and an indication of our potential borrowing base under our credit facility. Adjusted EBITDA is not a Generally Accepted Accounting Principle (“GAAP”) measure of performance. The Company uses this non-GAAP measure to compare its performance with other companies in the industry that make a similar disclosure, as a measure of its current liquidity, in developing our capital expenditure budget, to evaluate our compliance with covenants under our credit facility and as a component of the corporate objectives to which we tie the vesting of equity-based awards made to senior executives. 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, and that disclosure of this measure provides investors with visibility as to the corporate objectives that affect our executive compensation program. Investors should not consider this measure, or other non-GAAP measures such as net income excluding the effect of unrealized derivative losses, 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 Adjusted EBITDA is not a GAAP measure, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of Adjusted EBITDA and net income for the three and six months ended June 30, 2013 and 2012 is provided in the table below:

KODIAK OIL & GAS CORP.
RECONCILIATION OF ADJUSTED EBITDA
 
 
 Three Months Ended June 30,
 
   Six Months Ended June 30,
Reconciliation of Adjusted EBITDA:
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
 
Net income
 
$
44,250

 
$
93,072

 
$
63,694

 
$
94,816

  Add back:
 
 
 
 
 
 
 
 
     Depreciation, depletion, amortization
     and accretion
 
62,409

 
34,189

 
119,794

 
60,484

     Amortization of deferred financing costs
     and debt premium
 
828

 
617

 
1,746

 
1,257

     Unrealized gain on commodity
 
 
 
 
 
 
 
 
        price risk management activities
 
(20,910
)
 
(91,700
)
 
(3,728
)
 
(73,084
)
     Stock based compensation expense
 
3,501

 
2,655

 
7,225

 
5,090

     Income tax expense
 
26,100

 
25,920

 
38,900

 
25,920

     Interest expense
 
14,970

 
2,937

 
27,872

 
6,937

Adjusted EBITDA
 
$
131,148

 
$
67,690

 
$
255,503

 
$
121,420


9