Updates
Later, 3:25 pm est: I see that KOG is now green for the day. I honestly did not think that borrowing more money would affect the price of KOG in light of all the positive news today.
Original Post
Kodiak Oil & Gas provides interim operations update; Kodiak completion operations in the Williston Basin continue with two full-time, 24-hour-per-day crews, Co's drilling operations continue with seven operated rigs : Co provided an interim corporate update on recent completion and drilling activities.So, is the news good or bad? KOG is down a bit this morning on a day that:
a) the general market is up
b) the price of WTI is up solidly, up a buck
KOG announced $300M senior notes
ReplyDeleteYes, I saw that, but didn't post it. You are correct; that's probably the explanation.
DeleteI know nothing about finances/investing (compared to most other investors) but from following the Bakken for two years, borrowing never seemed to have much adverse effect on shares, compared to when companies raised money by issuing more shares. So, I sort of just ignored the $300 million in senior notes, but I suppose you are correct. Again, I know nothing about this level of finance.
The 300mm in notes came after the initial drop in price. I think when people looked at what happened with the KOG notes, they replaced other bonds that were at 8% plus in interest. New notes are at 5.5%. So they save 10 million a year in in interest expense.
ReplyDeleteThank you. That makes a lot of sense. And, I assume, issuing bonds at 5.5% vs 8% suggests investors feel the company is "safe," that is, "good for their word," and will be around long enough to pay that interest.
DeleteAgain, thank you for taking time to comment.