Strong Quarter for This Overlooked Oil Stock; Special Report by Leading Financial Web Site Penny Stock Detectives
In a recent Penny Stock Detectives article, editor Sasha Cekerevac states that with the recent oversold condition in oil prices ending with a strong rebound.
(prHWY.com) July 17, 2012 - New York, NY -- In a recent Penny Stock Detectives article, editor Sasha Cekerevac states that with the recent oversold condition in oil prices ending with a strong rebound over the past few days, many investors have stepped back into oil stocks. Cekerevac notes that one such oil stock had a spectacular quarter.
"Kodiak Oil & Gas is involved in the exploration and production of both oil and natural gas," reports Cekerevac. "The company is based out of Denver and is exploring for oil and natural gas in the U.S."
For the first quarter, which ended March 31, 2012, the company reported an increase in revenue of 499% to $79.9 million, as compared to $13.3 million in last year's first quarter. According to Cekerevac, this was primarily due to the massive 474% increase in production from last year's first quarter, as Kodiak produced and sold 10,578 barrels of oil (BOE) per day, compared to only 1,864 BOE per day in 2011. While the company does have some natural gas production, approximately 96% of the revenue was from crude oil, he comments.
The Penny Stock Detectives editor reports this positive production resulted in a massive swing to profitability, as the company earned $1.7 million, or $0.01 per diluted share, in the first quarter, compared to a loss of $7.2 million, or $0.04 per diluted share, in last year's first quarter. Without adjustments, on a non-Generally Accepted Accounting Principles (GAAP) calculation, the company earned $53.7 million in its first quarter, up over 600% from the prior year's quarter when the firm earned $7.6 million, notes Cekerevac.
Kodiak has an interesting combination that not all small- to medium-sized oil stocks have in that it both produces and still has extensive exploratory possibilities, Cekerevac points out.
"As oil stocks drill to determine the full extent of their reserves, this leaves the possibility of significant upside potential. With production able to generate sufficient income, the company can continue its operations without the need for share dilution. While oil prices do play a significant role in the value of oil stocks, how the firm is able to manage its exploration and production is extremely crucial to its success," argues Cekerevac.
Now that Kodiak has broken the downtrend resistance level that started in March, a re-test of the highs of the year is possible, observes Cekerevac. While oil prices are an important determinant for oil stocks, the increases in overall production for small- to medium-sized firms, as well as new discoveries are just as important, he says.
Cekerevac concludes by suggesting that investors keep Kodiak on their watch lists, noting, though, that he does not advocate buying the stock right now.
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