Bakken-shale focused oil driller Kodiak Oil & Gas (NYSE: KOG) is expected to report first-quarter results today after markets close. Earnings are expected to come in at $0.18 per share, which would represent a nice jump from the $0.11 per share it earned in the year-ago quarter. Beyond those numbers investors should keep an eye on a couple of key areas. 

Any changes to the plan?
Kodiak's current plan is to invest $940 million to drill about 100 wells. That investment should grow production to an average of 42,000-44,000 barrels of oil equivalent per day, as the following slide shows.

Source: Kodiak Oil & Gas Investor Presentation (Link opens a PDF).

While Kodiak's production growth rate is slowing from its torrid triple-digit annual pace, the company still has a long runway of growth ahead. The only reason growth is slowing down, other than the law of large numbers, is the fact that Kodiak slimmed down capital spending plans for 2014 in order to invest within its cash flow.

Investors will want to make sure the plan is working. We'll know that is happening if Kodiak remains on track to hit its guidance for the year, while also keeping its capital spending within cash flow. If Kodiak is not on track to meet or exceed guidance, investors will want to see if the company intends to change its plan, such as bulking up its capital spending program, as it did last year. 

Update on downspacing
Investors will want to watch Kodiak's downspacing tests. The following slide shows that the company's plans call for drilling wells as close as 600 feet apart.

Source: Kodiak Oil & Gas Investor Presentation

Achieving that goal throughout its acreage would significantly grow Kodiak's well count beyond the current inventory of 1,300 wells.

Fellow Bakken drillers such as Enerplus (EFR -0.08%) and Oasis Petroleum (OAS) see downspacing adding a significant number of future drilling locations, which will extend growth. Enerplus, for example, currently sees 145 future drilling locations which give it a drilling inventory that will last about seven years. However, Enerplus sees downspacing potentially adding another 150 drilling locations, which would add another seven years' worth of inventory.

Meanwhile, early performance on Oasis Petroleum's first 16 downspacing tests are encouraging, leaving the company comfortable on including 10 wells per drilling spacing unit in its current inventory. That means Oasis now has about 17 years of drilling inventory.

Extending Kodiak's 11 years' worth of drilling inventory through downspacing would enable the company to continue growing without spending to acquire additional acreage. That will improve its returns over the long term and create even more value for investors. 

Investor takeaway
Kodiak Oil & Gas is shifting from a high-growth company to more of a development-stage energy company, which means that earnings and cash flow growth will become more important in the future. Current cash flow should be enough to cover growth, which is what we want to see from the company at this point. As long as Kodiak is not deviating from that plan, investors shouldn't have much to worry about this quarter.