Jefferies 2012 Global Energy Conference

Transcription

1 Jefferies 2012 Global Energy Conference November 2012 Exploring, developing and producing oil and natural gas in the U.S. Rocky Mountains. l NYSE: KOG

2 Contact Information Kodiak Oil & Gas Corp Broadway, Suite 250 Denver, Colorado P: F: Investor Relations David P. Charles Sierra Partners LLC P: Forward-looking Statement This presentation includes statements that may constitute forward-looking statements, usually containing the words believe, estimate, project, expect or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Forwardlooking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words expects, plans, anticipates, believes, intends, estimates, projects, potential and similar expressions, or that events or conditions will, would, may, could or should occur. Forward-looking statements in this presentation include statements regarding the Company s exploration, drilling and development programs and plans, the Company s expectations regarding the timing and success of such programs, the Company s expectations regarding the future benefits of our completion techniques and infrastructure build-out, the Company s capital plans, the expected benefits therefrom and the timing and availability of financing to satisfy the capital requirements, and the Company s expectations regarding the future production of its oil & gas properties. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the prices of oil and gas, uncertainties inherent in estimating quantities of oil and gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks (including the completion of our proposed January 2012 Acquisition), uncertainties regarding the Company s liquidity and capital requirements and the availability and cost of capital necessary to fund the Company s current plan of operations, the effects of governmental regulation, adverse changes in the market for the Company s oil and gas production, dependence upon third-party vendors, and other risks detailed in the Company s periodic report filings with the Securities and Exchange Commission. 2

3 Corporate Data Symbol /Exchange: KOG / NYSE Market Capitalization: ~$2.4 B 52 Week H/L: $10.75 / $3.59 Shares Outstanding: 263 MM Total Liquidity 1 : ~$260 MM $750 MM Revolver: $450 MM Borrowing Base Unsecured Senior Notes: $ % due Liquidity as of September 30,

4 Rapidly Increasing Production Cash Margin Over Time ($/BOE) 2012 Production Guidance 27,000 Gas Sales $81.68 $80.95 $7.16 $5.67 $8.69 $8.83 $10.08 $7.05 $72.74 $4.75 $7.80 $5.60 $75.11 $4.36 $8.19 $5.77 Oil Sales 10,578 12,696 15,855 15,500-17,500 $55.75 $59.40 $54.59 $ , ,290 4Q11 1Q12 2Q12 3Q12 Cash margin LOE Production taxes Cash G&A Q Q Q BOE/d Avg for Average BOE/d Year BOE/d Exit Rate 4

5 2012E Capex 2012E Capex = $750 MM Capital Expenditures Comparison $726 MM for drilling, completion and related facilities 66 net wells (55 Op, 11 Non-op) $12 MM additional acreage acquisitions ($ in millions) $750 $12 MM salt water disposal wells and facilities Drilling Plan Currently operating seven rigs 1-2 non-operated rigs $261 $82 $ E Capex excludes acquisitions 5

6 Well Economics Overview Projected long lateral wells with EUR of MBO with average $10.5 MM well economics Bakken Long Lateral 750 MBO Well cost WTI Differential midpoint NPV-10 Payout ($/bbl) ($/bbl) ($ millions) ($ millions) IRR (months) $95 $10 $10.5 $ % % % 30 Bakken Long Lateral 850 MBO Well cost WTI Differential midpoint NPV-10 Payout ($/bbl) ($/bbl) ($ millions) ($ millions) IRR (months) $95 $10 $10.5 $ % % % 24 Monthly Rate Oil Gas Water MonthlyRate Oil Gas Water Bakken Long Lateral 650 MBO Well cost WTI Differential midpoint NPV-10 Payout ($/bbl) ($/bbl) ($ millions) ($ millions) IRR (months) $95 $10 $10.5 $ % % % 38 Note: Based on management projections utilizing current cost and differential assumptions. 6

7 Large Operated Acreage Position Williston Basin Williston Basin Acreage Over Time (in acres) 153,000 55,400 72,000 93,000 Aug-10 Dec-10 Jun-11 Sep-12 7

8 Overview: Williston Basin East of Nesson, Dunn County, ND Dunn County Lease Position as of 9/30/2012: 34,000 net acres Estimated long lateral Bakken EURs: MBOE Current Economic Parameters: $10.5 MM drilling and completion costs 82% Net Revenue Interest 8

9 Dunn County, ND Map Well Name WI/NRI (%) Status 1 SC H3 (3) 100/81 Completing MC H (2) 69/55 MC H3 (2) 69/55 SC H (2) 99/81 SC H3 (2) 99/81 MC H (2) 45/37 MC H3 (2) 45/ MC H (2) 60/49 MC H3 (2) 60/49 Drilling MC H (2) 60/49 Drilling With current drilling program, Dunn County acreage will be HBP by end of 2012 (1) Waiting on Completion Tools (2) Two-well Drilling Pad (3) Three-well Drilling Pad (4) Four-well Drilling Pad Approximate Lateral Lengths: 9,000-10,000 * Current activities data as of 11/20/2012 9

10 Overview: Williston Basin West of Nesson, Williams & McKenzie Counties, ND McKenzie & Williams Counties, ND Lease Position as of 9/30/2012: ~119,000 net acres Estimated long lateral Bakken EURs: MBOE Current Economic Parameters: $10.5 MM drilling and completion costs Variable Net Revenue Interest 10

11 Prospect: Koala - McKenzie County Map Well Name WI/NRI (%) Status Koala H (3) 88/70 Flowing Back Koala H3 (3) 94/75 Flowing Back Koala H (3) 88/70 Flowing Back Koala H3 (2) 63/53 Koala H (2) 63/53 Koala H (2) 43/34 Drilling Koala H Koala H3 Koala H Flowing back 1 Koala Polar 3 Koala 2 With current drilling program, Koala will be HBP by end of 2012 (1) Waiting on Completion Tools (2) Two-well Drilling Pad (3) Three-well Drilling Pad (4) Four-well Drilling Pad Approximate Lateral Lengths: 9,000-10,000 * Current activities data as of 11/20/2012 Smokey 11

12 Smokey & Polar Pilot Projects: Reservoir Well Spacing Pattern WELLBORE LOCATION LODGEPOLE 500ˊ UPPER BAKKEN SHALE MIDDLE BAKKEN 800ˊ LOWER BAKKEN SHALE 70ˊ 400ˊ UPPER THREE FORKS MIDDLE THREE FORKS ˊ 800ˊ 800ˊ LOWER THREE FORKS ˊ 12

13 Prospect: Smokey - McKenzie County Koala Polar With current drilling program, Smokey block will be HBP by end of Map 1 2 Well Name WI/NRI (%) Status Smokey H3 (4) 86/67 Completing Smokey H3 (4) 99/78 Completing Smokey H (4) 84/65 Completing Smokey H (4) 99/78 Completing Smokey H3 100/79 Drilling Smokey Approximate Lateral Lengths: 9,000-10,000 * Current activities data as of 11/20/2012 (1) Waiting on Completion Tools (2) Two-well Drilling Pad (3) Three-well Drilling Pad (4) Four-well Drilling Pad Well Spacing Pilot Project (#2 on map) 13

14 Prospect: Polar - Williams County Map Well Name WI/NRI (%) Status P Bibler H (4) 78/60 With current drilling program, Polar will be HBP by end of P Bibler H3 (4) 90/70 P Bibler H3 (4) 78/60 P Bibler H (4) 90/70 Polar Well Spacing Pilot Project P State H3 (2) 100/80 P State H (2) 100/80 P Bibler H (4) 87/68 Drilling P Thomas H (3) 78/62 Drilling Koala P Alice H3 IP: 2,895 BOE P Alice H IP: 3,213 BOE 1 3 P Jorgenson H IP: 3,666 BOE 2 (1) Waiting on Completion Tools (2) Two-well Drilling Pad (3) Three-well Drilling Pad Approximate Lateral Lengths: 9,000-10,000 (4) Four-well Drilling Pad * Current activities data as of 11/20/

15 Prospect: Grizzly - McKenzie County Grizzly Map 1 Well Name WI/NRI (%) Status Grizzly H3 (2) 98/79 Grizzly H (2) 98/79 Smokey 2 Grizzly H3 (2) 100/81 Drilling 2 1 Approximate Lateral Lengths: 9,000-10,000 * Current activities data as of 11/20/

16 Prospect: Wildrose - Williams County Wildrose Schilke H 86/68 IP: 1,007 BOE Polar (1) Waiting on Completion Tools (2) Two-well Drilling Pad (3) Three-well Drilling Pad (4) Four-well Drilling Pad Approximate Lateral Lengths: 9,000-10,000 * Current activities data as of 11/20/

17 Financial Strategy Kodiak Has Historically Employed a Conservative Financial Strategy Swaps bbl/d 12,000 10,000 8,000 6,000 4,000 2,000-10,010 11,105 $91.86 $87.12 $98.38 $ ,800 1,625 Q $ 125 $ 100 $ 75 $ 50 $ 25 $ - $ / bbl/d Strive to maintain conservative balance sheet which preserves financial flexibility Approx. $260 MM liquidity, at September 30, 2012 $450 MM revolver capacity as of October 2012 Term debt outstanding, $800 MM senior notes (8.125%) Target long-term debt / EBITDA of less than 2.0x bbl/d Weighted Average Floor Note: BOPD Swap and Collar Prices are calculated on a weighted average basis. As of Nov Collars bbl/d 1,200 1, ,130 $ $ $ $ $79.69 $85.00 $85.00 $ $ 120 $ 80 $ 40 bbl/d Weighted Average Floor Weighted Average Ceiling $ - $ / bbl/d Maintain active commodity hedging program Maintain active commodity hedging program Designed to protect cash flow / support fixed cost coverage and capital program Hedge greater of 85% of anticipated volumes from proved reserves or 90% from PDP as allowed under revolver Hedge additional volumes as wells are completed and additional production added 17

18 Takeaway Capacity Based on existing and proposed projects, the Williston is expected to continue to have ample infrastructure to transport crude out of the basin 1H12 estimated transportation of 975 MBbl/d (525 by rail, 450 via pipeline), increasing to over 1,400 MBbl/d by year-end 2013 Source: North Dakota Pipeline Authority and other market data. Note: Includes actual and proposed projects. 18

19 US Oil Pipeline System Source: ENBRIDGE 19

20 Key Highlights Drill-bit focused producer with large acreage position in oil-levered Williston Basin ~153,000 net acres in Williston Basin largely de-risked with Bakken/Three Forks potential Proved reserves of 70.1 Mmboe at 6/30/2012 (86% liquids) Q average sales of approximately 16,000 BOE/d Development of low-risk drilling inventory with attractive economics drives rapid producing growth Inventory of ~800 net drilling locations (~1,100 gross) prospective for Bakken and Three Forks Seven operated rigs running; two non-operated rigs drilling (40-50% WI) Under current drilling program, all areas should be HBP by the end of 2013 Asset scale, technical knowledge and infrastructure investments enhance operating results and margins Two full-time 24 hour dedicated frac crews Infrastructure build-out in progress, majority of wells connected and continuing connection in 2012; allows incremental natural gas / NGL sales Conservative financial philosophy and proactive liquidity management September 30, 2012 liquidity of approx $260 MM; expected cash flow and liquidity fund 2012E drilling capex Has historically maintained a disciplined financial approach with low leverage and plan to continue this strategy in the future 20

21 Appendix Historical Completion Activities 21

22 Historical Completion Activities Completions Well Name Completion Date WI/NRI (%) Dunn County Length of Lateral (1) IP 24hr 30 (feet) Test Boe/d Long Laterals (Over 5,000') Daily Production (Boe/d) Gas/Oil Ratio Range SC H Q / 38 9,250 1, FW SC H Q / 80 9,570 2, FW SC H Q / 81 8,460 2, FW SC H Q / 81 8,708 1, FW TSB H Q / 41 9,678 2,775 1, FW TSB H3 Q / 35 9,565 3,008 1, FW SC H3 Q / 82 9,421 1, FW SC H Q / 82 9,697 2, FW SC H Q / 81 9,240 2, FW CE H Q / 49 9,209 2, PW CE H Q / 49 8,695 1, PW SC H3 Q / 38 9,354 2,680 1, FW SC H3 Q / 79 9,459 2, FW SC H Q / 79 9,733 2, FW TSB H Q / 41 10,087 1,752 (3) 1,251 1, FW TSB H3 Q / 41 10,017 3,083 1,398 1,158 1, FW SC H Q / 80 9,618 3,028 1,449 1,196 1, PW CE H3 4Q / 46 8, PW CE H 4Q / 46 8, PW Status (1) Approximate Lateral Length (2) Production curtailed due to weather conditions and limited crude oil transportation (3) 14 Stages completed initially, with remaining stages completed Oct 2011 FW = Flowing Well PW = Pumping Well * Current activities data as of 11/20/

23 Historical Completion Activities Koala Prospect - McKenzie County Well Name Completion Date WI/NRI (%) Length of Lateral (1) (feet) IP 24hr Test Boe/d 30 Daily Production (Boe/d) Gas/Oil Ratio Range Status Long Laterals (Over 5,000') Koala H Q / 71 9, Completing Koala H3 Q / 76 9, Completing Koala H Q / 71 9, Completing 2012 Completions 2011 Koala H Q / 79 9,536 3,035 1, FW Koala H3 Q / 79 9,709 3,124 1, FW Koala H3 Q / 79 9,588 2,528 1, FW Koala H Q / 75 9,177 2,709 1,394 1, ,400 FW Koala H Q / 79 9,629 3,117 1,357 1, ,250 FW Koala H Q / 79 9,460 2,971 1,183 1, ,550 FW Koala H3 Q / 75 7,514 2,844 1, ,650 FW Koala H Q / 43 9,500 3,021 1,144 1, ,200 PW Koala H Q / 42 9,452 3,412 1,337 1,230 1, ,250 PW Koala H Q / 78 8,968 3,042 1,377 1,165 1, ,250 PW Koala H3 Q / 78 9,172 2,327 1,072 1, ,300 PW (1) Approximate Lateral Length (2) Well from October 2011 Acquisition (3) Well from January 2012 Acquisition FW = Flowing Well PW = Pumping Well * Current activities data as of 11/20/

24 Historical Completion Activities Smokey and Grizzly Prospects - McKenzie County Well Name Completion Date WI/NRI (%) Length of Lateral (1) (feet) IP 24hr Test Boe/d 30 Daily Production (Boe/d) Gas/Oil Ratio Range Status Long Laterals (Over 5,000') Smokey Cupcake H3 Q / 76 9, Completing Smokey H Q / 72 9, Completing Smokey H3 Q / 74 9, Completing 2012 Completions Smokey Kinden H Q / 80 9, Completing Smokey Kenny H3 Q / 76 9,284 1, ,000 FW Smokey H Q / 76 10,020 2, ,000 FW Smokey H Q / 76 9,080 2,362 1, ,200 FW Smokey H Q / 63 8,914 2,858 1, ,500 FW Grizzly H Q / 53 8,632 1, PW Grizzly H Q / 71 10, PW Grizzly H Q / 74 9, PW (1) Approximate Lateral Length (2) Well from October 2011 Acquisition (3) Well from January 2012 Acquisition FW = Flowing Well PW = Pumping Well * Current activities data as of 11/20/

25 Historical Completion Activities 2012 Completions 2011 Well Name Completion Date Williams County WI/NRI (%) Length of IP 24hr Lateral (1) Test (feet) Boe/d Long Laterals (Over 5,000') 30 Daily Production (Boe/d) Gas/Oil Ratio Range Schilke H Q / 68 9,122 1, FW P Alice H Q / 46 10,105 3,213 1, FW P Alice H3 Q / 46 9,678 2,895 1, FW P Jorgenson H Q / 74 7,349 3,666 1, FW P Alexander H Q / 57 9,213 2, ,400 FW P Alexander H3 Q / 57 9,449 2, ,200 FW Holland 9-19H Q / 48 7, ,200 FW P Vance H Q / 58 9,490 3,244 1, ,300 FW P Vance H Q / 51 8,732 2,742 1, ,000 FW P Peterson H Q / 56 9,491 2, ,500 FW P Peterson H3 Q / 56 8,977 2,569 1, ,500 FW Thomas H Q / 74 9,277 4,021 1,559 1,279 1, ,000 FW Thomas H3 Q / 77 9,373 3,021 1, ,500 FW Pankowski 4-6H (3) Q / 48 8,860 1, ,800 PW Lind 211 1H (2) Q / 54 9,563 1, ,250 PW King 3-8H (3) Q / 58 7,620 1, ,000 PW Mildred 94 1H (2) Q / 35 10,041 1, PW State H (2) Q / 29 8,926 1, ,050 PW Long 112 1H (2) Q / 56 9,583 1,978 1, ,250 PW Status (1) Approximate Lateral Length (2) Well from October 2011 Acquisition (3) Well from January 2012 Acquisition FW = Flowing Well PW = Pumping Well * Current activities data as of 11/20/

26 Current Estimate of Well Locations Analysis of estimated net well locations below assuming all long-lateral development Kodiak Prospect Area Producing Kodiak Net Assumed Drilling Total Net Formation Acres Acres Well Locations Bakken Dunn County Three Forks 34, (assumes 4 Bakken & 3 Three Forks per 1280) 186 Bakken Koala Three Forks 17, (assumes 4 Bakken & 3 Three Forks per 1280) 93 Bakken Smokey Three Forks 16, (assumes 4 Bakken & 3 Three Forks per 1280) 88 Bakken Polar Three Forks 36, (assumes 4 Bakken & 3 Three Forks per 1280) 197 Bakken Grizzly Three Forks 27, (assumes 4 Bakken & 3 Three Forks per 1280) 148 Bakken Wildrose Three Forks 23, (assumes 3 Bakken & 2 Three Forks per 1280) 90 Bakken Sheridan Co., Montana Three Forks 2, (assumes 2 Bakken & 2 Three Forks per 1280) 6 Company Totals 155, net locations drilled and completed through June 30, 2012 Notes: Acreage amounts and well locations may not total due to rounding. 26

27 Proved Reserve Summary 06/30/2012 Proved Reserves and PV-10 June 30, 2012 reserves audited by NSAI Reserve Category Kodiak Net Proved Reserves as of June 30, 2012 Oil Gas Total SEC PV-10 (Mbbls) (Mmcf) (Mboe) ($MM) Proved Developed Producing 23,750 24,712 27, Proved Undeveloped 36,601 33,739 42, Total Proved Reserves 60,351 58,451 70,093 1,382 Net Proved Reserves Proved Reserve Allocation 1P PV 10% PDP 40% Gas 14% PDP 62% PUD 60% Oil 86% PUD 38% Large Drilling Inventory Reserves 86% Oil Economic PUD Reserves Note: SEC pricing as of 6/30/