Independent energy company,
Kodiak Oil & Gas Corp.
) provided a sneak-peak into its 2014 capex and operational
activities. The company announced a capital budget of $940
million for 2014 against the $1.0 billion capital expenditure in
2013. The 2014 capex budget is dedicated wholly to the Williston
Basin oil and gas acreage.
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Of the total budget, $890 million is allocated for drilling
activities, with the expectation of completing about 100 net
wells. The remaining $50 million is reserved for infrastructure
development and minor acquisitions.
The 2014 capital budget will be financed by the current working
capital, operating cash flows and the company's revolving credit
facility. However, Kodiak believes that the 2014 operating cash
flow should reach close to the capex budget level.
The company anticipates that the budget will lead to a 45%
year-over-year increase in production volumes, reaching about
42,000 to 44,000 barrels of oil equivalent per day (Boe/d) in
full-year 2014. Kodiak expects full-year 2013 production around
29,200 Boe/d, keeping in view the severe winter conditions that
The company also provided an update on its downspacing activities
which seem on track. The 12 wells in each of the Polar and Smokey
areas meet Kodiak's expectations. Kodiak is in the process of
completing the first of the four, four-well pads in a drilling
and spacing unit to the east of the downspacing pilot program in
the Polar area. The company expects all four pads to be online in
Earlier in the month, the company increased its borrowing base
from $1.1 billion to $1.35 billion. Under the revolving credit
facility, the company's current borrowing stands at around $700
Headquartered in Denver, the oil and gas exploration and
production company currently carries a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile one can consider better-ranked energy sector stocks
Abraxas Petroleum Corp.
Harvest Natural Resources Inc.
Clayton Williams Energy, Inc.
). All these currently sport a Zacks Rank #1 (Strong Buy).