S&P: Kodiak Oil B, notes B-

Standard & Poor's said it assigned a B corporate credit rating to Kodiak Oil & Gas, along with a B- issue rating to Kodiak's proposed $550 million senior unsecured notes due 2019.

The recovery rating is 5, indicating 10% to 30% expected recovery in a default.

The outlook is stable.

The proceeds from the debt and equity offerings will be used to finance the acquisition of the Williston Basin assets, as well as to refinance Kodiak's existing debt, S&P said.

The ratings reflect the company's relatively small asset base and production levels, lack of geographical diversification and high spending levels in excess of projected operating cash flows, the agency said.

The ratings also consider the company's significant exposure to robust crude oil prices, favorable cost structure and solid acreage position, S&P said.

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