Kodiak Oil & Gas (KOG) is engaged in oil and gas operations along the Williston Basin of North Dakota and the Green River Basin of Wyoming. The company has historically used a very conservative financial strategy. In a presentation in late March, the company outlined its goal to maintain a conservative balance sheet and, in so doing preserve its financial flexibility. Just as Kodiak tries to hedge its finances, it also tries to hedge its commodities, balancing its oil and gas operations.

Kodiak’s share price was flat through the first quarter this year, returning less than 1%. It is down over 8% year to date. Right now, the stock is trading around $9 a share with a mean one-year target estimate of $11.36, putting its expected upside at roughly 26%. It does not offer a dividend.

Looking at the same quarter last year, Kodiak enjoyed a massive jump in revenue, increasing its numbers by 250.2% versus 25.4% for its industry. The company also enjoyed a massive net operating cash flow increase of 530.35% when compared to the same quarter last year, surpassing the industry’s average of 3% significantly. Kodiak has a fairly low debt to equity ratio of 0.89, but as low as that figure is when compared to the market in general, it is higher than that of the company’s peers. While the debt to equity ratio is somewhat mediocre, Kodiak’s quick ratio of 1.50 is high and demonstrates the ability to cover it short-term capital needs easily.

Kodiak has enjoyed an increase in its return on equity over the same quarter last year, moving from -0.80% at the end of the fourth quarter 2010 to 0.46% at the end of the fourth quarter 2011. To continue reading, click here.