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КОрпорация Кодиак Ойл & Газ Message Board

  • g8trgr8t g8trgr8t Jun 24, 2013 3:06 PM Flag

    SA on KOG Purchase

    Another good article just posted. Good stuff

    The most exciting wells in Tyrone Field are being purchased by Kodiak Oil and Gas (KOG). This purchase was received in both a positive and negative light. The bears believe Kodiak will have to go back to the shareholders this year. This is an issue, as Kodiak seemed to have the cash to operate 2013. The Liberty purchase makes for a cloudy situation, which could pull the stock price back this year. Kodiak believes it can pay for this acquisition through cash flow, and this could be possible. If it can accomplish this, then the deal was a good one.

    I initially did not like the purchase. It seemed Kodiak was in for a big year if it hit company estimates. It was seeing costs decrease, with tight differentials. Going over the purchase, it seemed Kodiak didn't get the acreage cheap, but didn't pay too much either. The question is about motivation. The acreage isn't top notch, and does not produce great IP rates. Going over Liberty's well results, I found out why. Liberty's west Williams County results are the best in the area. The table below provides Kodiak's new wells.

    Kodiak's Wells From Liberty Purchase Well Lateral Ft. Stages Ft. Water Bbls. Proppant Lbs. 30-Day IP Bo/d 90-Day IP Bo/d 180-Day IP Bo/d
    22067 10486 35 256297 4129812 645 493 426
    22495 9986 35 243250 4095724 860 613 499
    22068 9359 35 250327 4108310 431 419 366
    21481 9102 35 241234 4059653 866 656 526
    Avg. 9733 35 247777 4098375 701 545 454

    Kodiak may have made a great deal. Liberty is not well known as its a private company. It has two monster wells in Tyrone Field. The average of its four wells has EURs of 600 to 700 MBo. Liberty has an interesting well design. It uses very large volumes of water. Its water usage is five times the average well. It uses a large amount of proppant. These results are good enough to rival EOG's recent completions. Below is the table of EOG's new completion design from my last article

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