After Kodiak’s (NYSE: KOG) first-quarter earnings release three months ago, I had mentioned that the company’s progress was not really a surprise. My opinion has not changed after its latest earnings release.

Solid performance
Operations grew phenomenally in the second quarter. Reflected by record production and sales, adjusted EBITDA rose a whopping 377% to $13.7 million when compared to the year-ago quarter. This metric, though a non-GAAP measure, gives an indication of how core operations fared during this period. Obviously, they look good.

Revenues for the quarter rose to $22.1 million -- again, a massive 261% improvement over last year’s second quarter. While higher oil price realizations did play a part, higher sales and higher production were responsible for this impressive show.

Solid growth
Total production grew 147%, while sales volumes grew by an equivalent 149%. This is what Foolish investors should be looking for. Despite volatile market conditions, and even more volatile energy prices, a growth in fundamentals should see the company through during difficult times. The huge potential that Kodiak has been holding out for so long is finally bearing fruit.

Not surprisingly, the Bakken is definitely proving to be the place to dig for resources. Now, here’s the interesting part. Kodiak is yet to develop 84% of its acreage position in the Williston Basin. The potential for further growth is immense. Continental Resources (NYSE: CLR) and EOG Resources (NYSE: EOG), with their large holdings in the Bakken, have already showed why they are ahead of the game.

What the future holds
Kodiak plans to add a fifth rig in the Williston Basin for the third quarter. Additionally, two rigs operated by a joint venture partner will also make way into the region which should ensure further growth during the rest of the year. Also, the $86 million in acquisitions closed on June 30 has yet to bear fruit. There is a long way to go for increasing production.

Capital expenditures for 2011 are estimated to be around $230 million, of which around $77 million have already been spent. Kodiak’s balance sheet looks pretty healthy with cash balances of $50 million and a debt-to-equity at a respectable 35%.

Foolish bottom line
In all, Fools should stand to gain from this stock. The short term might not look too attractive, thanks to falling crude oil prices. However, the stock’s intrinsic value should be determined by its production and sales growth, and I believe Kodiak is capable of delivering on both counts.

Click here to add Kodiak to My Watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.