Kodiak Oil & Gas 2013 Bakken Sales Volumes Up 103% in 2013 from 2012

February 12, 2014 Kirk Eggleston

Kodiak's average daily sales volume in the Bakken went up 98% to 36,100 boe/d in the fourth-quarter of 2013 from 18,200 boe/d in the fourth-quarter of 2012. Crude oil made up most of the company's sales volume at 89% in the fourth-quarter.

Average daily sales volumes increased 103% for the year to 29,200 boe/d in 2013 from 14,400 boe/d in 2012.

Kodiak Bakken Acquisitions and Drilling Operations in 2013

In 2013, Kodiak invested approximately $672 million on acquisitions net of divestitures in the Bakken. In June 2013, Kodiak Oil & Gas signed a purchase and sale agreement with Liberty Resources for 42,000 net acres in the Williston Basin for $660 million.

The acquisition included acreage prospective for the Bakken and Three Forks formations in McKenzie and Williams counties.

For the full year 2013, Kodiak invested ~ $1.0 billion in capital expenditures for drilling and completing new wells, including surface facilities and pipeline connections in the Bakken. In the fourth-quarter of 2013, the company completed 29 gross (21.9 net) operated wells and 40 gross (4.0 net) non-operated wells. Currently, Kodiak has 7 operated rigs in the Williston Basin.

Kodiak Bakken Reserves

Kodiak estimates the value of its proved total reserves increased from $1.9 billion in 2012 to $3.5 billion at the end of the year in 2013. That's an 81% increase.

The company's estimated proved reserves increased 77% to 167.3 million boe from 94.7 million boe in 2012. Total proved crude oil reserves are 138.2 million bbl crude oil and total natural gas reserves of 174 bcf natural gas.

“Lynn Peterson, Chairman and CEO said: “Last year was another exciting year for Kodiak and its shareholders. Our team did a tremendous job of delivering outstanding operating results and reserve growth while, at the same time, we materially expanded our future drilling inventory through downspacing work and an acquisition. In 2014, our focus continues to be on determining the optimum development blueprint for our leasehold while delivering operational excellence.”

Make-up of Kodiak's Proved Reserves at the end of year 2013:

138.2 million bbl crude oil (83%)
174 bcf natural gas (17%)
46% of 2013 proved reserves are developed and producing
54% of 2013 proved reserves are undeveloped

Of the 54% of proved reserves that are undeveloped, Kodiak estimates those properties are a 2.5 year drilling inventory.

Kodiak Increasing Bakken Spending & Production Guidance

July 24, 2013 R.T. Dukes

Kodiak provided a second quarter operations update, along with plans to spend more and produce more from the Bakken in the second half of the year. The increase comes as no surprise. Kodiak acquired Liberty Resources' Bakken acreage earlier in July 2013 for $660 million.

Kodiak's production at the time of the announcement was 34,000 boe/d. 28,500 boe/d from legacy assets and 5,500 boe/d from the recently acquired Liberty assets.

The update included the following 2013 guidance changes:

Production guidance increases from 29,000-31,000 boe/d to 30,000-34,000 boe/d
Capital spending will increase from a planned $775 million to $950 million to $1 billion
The budget includes the completion of ~100 net wells

Kodiak's Second Quarter Bakken Activity

[ic-l]Kodiak participated in the completion of 48 gross (24 net) wells in the second quarter. Kodiak brought on a second full-time completion crew in May and plans to use a third crew temporary on its newly acquired lands. Third quarter activity is expected to include completing 30 gross (25 net) operated wells plus additional non-operated wells.

Kodiak was operating seven rigs in the area, dropped one in June, and then added a rig back through the recent acquisition. The company is running three rigs in the Polar area, two in the Smokey project, one at the Koala project, and one in Dunn County.

Wells on two 12-well units are nearing completion and one pad has eight wells already producing. Kodiak is testing 12 wells within a single 1,280 acre unit in both the Polar (Williams County) and Smokey (McKenzie County) areas. We should hear more in the third quarter.

Kodiak Buying Bakken Assets From Liberty Resources For $660 Million

June 4, 2013 R.T. Dukes

Kodiak Oil & Gas has signed a purchase and sale agreement with Liberty Resources for 42,000 net acres in the Williston Basin for $660 million.

The acquisition includes acreage prospective for the Bakken and Three Forks formations in McKenzie and Williams counties.

In total, a portion of 35 (1,280-acre) spacing units are included in the deal.

14,000 net acres adjacent to the Polar Area
25,000 net acres west of the Koala & Smokey areas

Production from the assets averaged 5,700 b/d in May of 2013. Kodiak will also assume a rig contract that has 14 months remaining.

After closing, Kodiak will control 196,000 net acres in the Bakken.