UPDATE 2-Kodiak Oil profit soars but misses expectations
By Ernest Scheyder
Oct 31 (Reuters) - Kodiak Oil & Gas Corp, which drills for oil and natural gas in North Dakota's Bakken shale formation, said on Thursday its quarterly profit jumped nearly nine times due to a surge in production.
But the results narrowly missed Wall Street's expectations, and its shares fell 1.2 percent to $12.82 in after-hours trading. The stock has gained 47 percent so far this year.
The company posted net income of $31.2 million, or 12 cents per share, compared with $3.5 million, or a penny per share, in the year-ago period.
Excluding one-time items, the company earned 22 cents per share. By that measure, analysts expected earnings of 23 cents per share, according to Thomson Reuters I/B/E/S.
Revenue more than doubled to $299.6 million. Analysts expected $282.6 million in revenue.
Kodiak said earlier this month that its third-quarter average sales volumes jumped 54 percent.
Part of the company's jump in oil production can be attributed to its use of ceramic proppant, rather than sand, during hydraulic fracturing, the process commonly known as fracking.
Kodiak uses small grains of ceramic material to hold open underground cracks during the fracking process. Though more expensive than sand, the industry standard, ceramic is stronger and more resilient, keeping cracks open longer than sand and allowing more oil to be extracted.
"It absolutely worth it" to pay more for ceramic proppant, Kodiak CEO Lynn Peterson said in an interview with Reuters last month. "Our production speaks for itself."
Kodiak's largest shareholders include hedge funds Paulson & Co and Citadel Investment Group LLC.
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