In addition to the regular company presentation I attended the following breakout session where the analysts hit on the presenting company folks with in depth questions and clarifications relating to what was said.
I didn't catch RAME but did get ATPG, KOG and SGY. The first 2 were incrediably positive and reinforce all the upside Dan et al have previously pointed out. Minor clarification is that for ATPG the 7K Boe/d was the preliminary # for the 2 sands (but not to worry).
KOG's couldn't sound better (probably one reason it has gone up several hundred % over the last year or so) and the CEO was asked about buy out rumors and said $20 would work. He sounded very conservative in going over the #s presented.
Under promise and over deliver seemed to be the theme for both but as I found out when I believed "peak oil" something always seems to go wrong.
I felt SGY's pay off is too distant since it is related to deep water stuff that won't happen soon.
GLTA
and that perhaps is why it is still way off the high of a few years ago
IPAA SF update
Re: IPAA SF update
Great work!
Let me point out that KOG's production growth will be stunning over the next two quarters. They drill their wells from multi-well pads and cannot complete them until all wells are drilled. Therefore, they will complete four wells over a very short time once they can move the completion rig in. KOG is definitely a prime takeover target.
KOG has a lot of upside for us.
Don't be too hard on SGY. They should have a good quarter and they have a lot more going for them than the GOM stuff.
Dan
Let me point out that KOG's production growth will be stunning over the next two quarters. They drill their wells from multi-well pads and cannot complete them until all wells are drilled. Therefore, they will complete four wells over a very short time once they can move the completion rig in. KOG is definitely a prime takeover target.
KOG has a lot of upside for us.
Don't be too hard on SGY. They should have a good quarter and they have a lot more going for them than the GOM stuff.
Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: IPAA SF update
Kodiak Oil & Gas Corp. (AMEX: KOG) reported 2nd quarter earnings of $621,147, just 1 cent per share and slightly below our forecast.
On August 18 Kodiak went to the public equity market and sold 28.75 million shares at $2.75 per share. The Company raised approximately $74.1 million in net proceeds from the offering. Obviously, the dilution hurts a bit and it did knock the share price back to just about the issue price of the new shares. The good news is that it keeps the Company out of debt and allows it to aggressively develop their Bakken acreage. During the 2nd half of September the share price move back up to pre-offering levels.
The Company is on track to complete its 2010 Bakken development drilling program before the winter sets in up in North Dakota. That is all we need to focus on. Their earnings will be choppy. Kodiak is drilling their Bakken wells from pads. They drill four wells from each pad, which saves a lot of money. They can test the wells with the drilling rig but they cannot tie the wells into production facilities until all four wells are drilled and a completion rig moves in. We are now expecting a large increase in production going into the 4th quarter.
The Company’s production is now over 1,200 boepd with 85% oil. They will be drilling 15 net wells in the Bakken this year that could more than triple Company production by the 4th quarter. Their 12-31-2010 production exit rate should be near 3,000 boepd.
On June 29 Kodiak announced a significant agreement with a third-party pipeline operator that allows for the gathering and sales of crude oil and natural gas through pipelines in the Company’s core area of operations in Dunn County. This will lower operating costs and increase top line revenues. Natural gas and liquids that are now being flared will be sold. The pipeline agreement also includes water gathering and disposal which can further reduce lease operating expense.
Another plus is that the Company has a large net operating loss carryforward so they won’t be paying any income taxes for the next couple of years. It fact, they won’t be booking any income tax expense until they wipe out the unrecorded tax benefits they’ve accumulated. This can give a real boost to bottom line earnings growth.
See my forecast model for Kodiak under the Sweet 16 tab. My Fair Value estimate for this small-cap is $5.30 per share.
On August 18 Kodiak went to the public equity market and sold 28.75 million shares at $2.75 per share. The Company raised approximately $74.1 million in net proceeds from the offering. Obviously, the dilution hurts a bit and it did knock the share price back to just about the issue price of the new shares. The good news is that it keeps the Company out of debt and allows it to aggressively develop their Bakken acreage. During the 2nd half of September the share price move back up to pre-offering levels.
The Company is on track to complete its 2010 Bakken development drilling program before the winter sets in up in North Dakota. That is all we need to focus on. Their earnings will be choppy. Kodiak is drilling their Bakken wells from pads. They drill four wells from each pad, which saves a lot of money. They can test the wells with the drilling rig but they cannot tie the wells into production facilities until all four wells are drilled and a completion rig moves in. We are now expecting a large increase in production going into the 4th quarter.
The Company’s production is now over 1,200 boepd with 85% oil. They will be drilling 15 net wells in the Bakken this year that could more than triple Company production by the 4th quarter. Their 12-31-2010 production exit rate should be near 3,000 boepd.
On June 29 Kodiak announced a significant agreement with a third-party pipeline operator that allows for the gathering and sales of crude oil and natural gas through pipelines in the Company’s core area of operations in Dunn County. This will lower operating costs and increase top line revenues. Natural gas and liquids that are now being flared will be sold. The pipeline agreement also includes water gathering and disposal which can further reduce lease operating expense.
Another plus is that the Company has a large net operating loss carryforward so they won’t be paying any income taxes for the next couple of years. It fact, they won’t be booking any income tax expense until they wipe out the unrecorded tax benefits they’ve accumulated. This can give a real boost to bottom line earnings growth.
See my forecast model for Kodiak under the Sweet 16 tab. My Fair Value estimate for this small-cap is $5.30 per share.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group