Moody's: Kodiak notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to Kodiak Oil & Gas Corp.'s offering of $550 million senior unsecured notes due 2019.

The proceeds will be used for acquisition financing, to fund capital spending, debt refinancing and general corporate purposes.

This notes offering, together with a concurrent 37.5 million issuance of common equity, will provide the funding to enable Kodiak to move its Williston Basin presence forward as it builds scale, said Andrew Brooks, a Moody's analyst.

The company has largely financed its initial acreage acquisitions and production with equity, the agency said, and this debt issue will layer in an incremental source of capital to fund its growing operations.

Kodiak's B3 corporate family rating reflects its small scale, limited historical operating record and limited financial flexibility, Moody's said.

These negatives are offset to some extent by its attractive land holdings in the prolific Williston Basin and the extensive oil weighting of its growing production, the agency said.

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