1322866--3/12/2009--Kodiak_Oil_&_Gas

related topics

{gas, price, oil}

{stock, price, share}

{condition, economic, financial}

{cost, contract, operation}

{control, financial, internal}

{loss, insurance, financial}

{acquisition, growth, future}

{stock, price, operating}

{cost, regulation, environmental}

{provision, law, control}

{loan, real, estate}

{personnel, key, retain}

{system, service, information}

{interest, director, officer}

Risks Relating to the Company We have a recent history of negative reserve revisions. Our working capital will not be sufficient to support all of our planned exploration opportunities in 2009. We may incur termination fees related to two drilling rig contracts that we entered into in 2008 which could impair our working capital. The deterioration of global economic and financial conditions and an extended decline in the price of oil and natural gas could negatively impact our business, financial condition and results of operations. If credit and capital markets worsen, then we may not be able to obtain funding on acceptable terms. The inability to obtain funding could deter or prevent us from meeting our future capital needs to fund our capital expenditure program. We have historically incurred losses and expect to incur additional losses in the future. It is difficult for us to forecast when we will achieve profitability, if ever. We may not be able to successfully drill wells that can produce oil or natural gas in commercially viable quantities. Our focus on exploration activities exposes us to greater risks than are generally encountered in later-stage oil and natural gas property development businesses. The actual quantities and present value of our proved reserves may be lower than we have estimated. The imprecise nature of estimating proved natural gas and oil reserves, future downward revisions of proved reserves and increased drilling expenditures without current additions to proved reserves may lead to write downs in the carrying value of our natural gas and oil properties. Our reserves and production will decline and unless we replace our oil and natural gas reserves, our business, financial condition and results of operations will be adversely affected. We have not insured and cannot fully insure against all risks related to our operations, which could result in substantial claims for which we are underinsured or uninsured. We have limited control over activities in properties we do not operate, which could reduce our production and revenues and affect the timing and amounts of capital requirements. Our operations in North Dakota, Montana and Wyoming could be adversely affected by abnormally poor weather conditions. Market conditions or operational impediments may hinder our access to oil and natural gas markets or delay our production. Pipeline capacity in the Rocky Mountain region may be inadequate, and consequently, a price decrease may be more likely to affect the price received for our Rocky Mountain production more than production in other U.S. regions. We rely on independent experts and technical or operational service providers over whom we may have limited control. Our interests are held in the form of leases that we may be unable to retain and the title to our properties may be defective. Properties that we acquire may not produce oil or natural gas as projected, and we may be unable to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them, which could cause us to incur losses. Our officers and directors may become subject to conflicts of interest. We depend on a number of key personnel who would be difficult to replace. We have made and will continue to make substantial financial and man-power investments in order to assess and maintain our internal controls over financial reporting and our internal controls over financial reporting may be found to be deficient. Risks Relating to Our Industry The oil and natural gas industry is subject to significant competition, which may increase costs or otherwise adversely affect our ability to compete. Oil and natural gas are commodities subject to price volatility based on many factors outside the control of producers, and low prices may make properties uneconomic for future production. Exploration and drilling operations are subject to significant environmental regulation, which may increase costs or limit our ability to develop our properties. A substantial or extended decline in oil and natural gas prices could reduce our future revenue and earnings. Our operations and demand for our products are affected by seasonal factors, which may lead to fluctuations in our operating results. Conducting operations in the oil and natural gas industry subjects us to complex laws and regulations that can have a material adverse effect on the cost, manner and feasibility of doing business. Risks Relating to Our Common Stock Future sales or other issuances of our common stock could depress the market for our common stock. Our common stock has a limited trading history and has experienced price volatility. We have not paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. Our constating documents permit us to issue an unlimited number of shares without shareholder approval.

Full 10-K form ▸

1322866--3/12/2009--Kodiak_Oil_&_Gas_Corp