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Surging Production Fueled Earnings Growth at Kodiak Oil & Gas

Kodiak Oil & Gas (NYSE: KOG  ) reported its fourth-quarter and full-year financial results after the market closed today. The company reported net income of $26.6 million or $0.17 per share, which missed analysts' estimates by a penny. That was still 40% higher than the $33.3 million, or $0.12 per share the company earned in last year's fourth quarter.

Operating cash flow was also strong at Kodiak Oil & Gas. The company's net cash flow from operating activities was $168.1 million in the quarter. That was well above the $69.4 million the company reported in the fourth quarter of 2012.

Fueling earnings and cash flow growth was the company's surging production. Production volumes increased 98% from the fourth quarter of 2012 to 3.3 million barrels of oil equivalent this past quarter. However, the company's growth rate did slow sequentially, as production was up just 2% over the prior quarter. 

Slowing sequential production wasn't the only headwind that Kodiak Oil & Gas faced in the quarter. The price it realized for its oil slipped 13% from just the prior quarter, though its average realized oil price is up 9% year over year. In addition to lower oil prices, Kodiak's lease operating expenses rose in the quarter by 4% over the prior quarter and is up 9% over the past year.

Despite the headwinds, Kodiak Oil & Gas reported a pretty strong quarter. Looking ahead, the company sees strong production growth again in 2014, though the rate will slow to 45%. The company remains well positioned to grow as it continues drilling in the oil-rich Bakken Shale.


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  • Report this Comment On February 27, 2014, at 10:25 PM, diesel5 wrote:

    You totally missed the higher tax rate $34.2 million this Q4 vs. $4.9 million inlast year's Q4, just to mention one thing.

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Matt DiLallo
TMFmd19

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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