KOG's Earnings Are Out

Updates

February 29, 2012: Motley Fool's first note after the 4Q11 KOG earnings debacle. 

Talk about your fast growth rates. Kodiak Oil & Gas generated 10 times the revenue in 2011 that it did just two years ago, buoyed by rising oil prices and a hard-charging expansion strategy that's starting to pay off. Although it missed analyst estimates, Kodiak has been growing so quickly that it should be expected to keep smashing through prior high-water marks throughout 2012 and beyond.

Let's look at the reported numbers, including future estimates, to figure out just how much potential is left for a stock that's jumped more than 3,000% since the end of 2008.

Tale of the tape 

Kodiak's grown tremendously since those dark days, and a lot of it's been fueled by stock issuance, as shares outstanding almost have doubled over that time frame. That's something to keep an eye on as the company continues to drill new wells in the Bakken, but growth has a great way of making dilutive offerings seem less important.

Click on the link to see the numbers that impress Motley Fool.

Later, later: just before earnings were released, The Street picked KOG as one of five companies to "soar" after earnings release. Very, very interesting. 

Later, same evening: for investors only -- Reuters is reporting that most analysts expected a 9-cent profit; instead the company reports a 15-cent loss.  If folks see this as "seed corn" -- growing fast; additional rigs, fine, but a basic tenet on Wall Street is not to surprise the analysts. If KOG had an idea that their report would be significantly different than what analysts were expecting, the company needed to provide more information to the analysts.

Original Post

Press release here.

Some data points:

• 2011 sales, $120 million vs $31 million in 2010
• 2011 avg production of 3,922 boepd vs 1,259 ave boepd in 2010
• 2011 net income, 2 cents/share identical to previous calendar year
• And again, the derivative loss resulted in a loss of 8 cents/share

Of note:

The largest component of lease operating expense (LOE) in the Williston Basin operations is the disposal of water used in the well completion operations, the majority of which has been transported by truck to third-party disposal facilities.  The Company is actively addressing water disposal costs by connecting wells to third-party pipelines, drilling water disposal wells in producing areas and constructing water gathering systems where appropriate.  As existing and future wells are connected to water gathering systems, LOE is projected to decrease on a per-unit basis.

Earnings conference call tomorrow.