Whiting Petroleum agreed to purchase Kodiak for $6 billion in stock and debt, creating the largest producer in the Bakken shale oil formations in North Dakota.
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Shares of Kodiak Oil are up 0.74% to $15.02 in pre-market trading today. Separately, TheStreet Ratings team rates KODIAK OIL & GAS CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation: "We rate KODIAK OIL & GAS CORP (KOG) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KOG's very impressive revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues leaped by 55.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KODIAK OIL & GAS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KODIAK OIL & GAS CORP increased its bottom line by earning $0.53 versus $0.49 in the prior year. This year, the market expects an improvement in earnings ($0.76 versus $0.53).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 49.7% when compared to the same quarter one year prior, rising from $19.44 million to $29.11 million.
- Net operating cash flow has increased to $163.53 million or 42.72% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.51%.
- Powered by its strong earnings growth of 57.14% and other important driving factors, this stock has surged by 58.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: KOG Ratings Report