Significant roll of the dice! Dramatically increases leverage in a softening oil price market. Lynn appears to be trying to replace Aubrey as the industry's most swashbuckling land baron.
The added production is nice but not significant. The big upside is the added acreage for more drilling adjacent to existing fields and infrastructure.
It will be interesting to see how the market reacts to the additional debt and the effect on earnings for the next few quarters.
pps will be heading down this Mickey Mouse CEO put this company so far I debt he should step down. Paying top dollar for land when oil is heading for the 80's is just plane stupid. PPS will be in the 7's real soon, what a moron!
Sentiment: Strong Sell
Commenting on the proposed transaction, Kodiak's Chairman and CEO Lynn Peterson said: "The proposed acquisition's characteristics adhere to our stated strategy of identifying and acquiring reduced-risk, contiguous leasehold in our immediate core operating areas. On a per-share basis, the transaction is immediately accretive on all measures.
"The increase to our inventory of future drilling locations provides the Company with a longer runway of sustainable growth. As we continue our down-spacing work in our Koala and Smokey areas, we would expect the number of locations to increase significantly. We also benefit from the addition of the production and its cash flow, as well as proved reserves included in the deal.