Chesapeake Energy Corporation (CHK), SandRidge Energy Inc. (SD), Kodiak Oil & Gas Corp (USA) (KOG): Is This Stock Destined for Greatness?

Matt points to Kodiak’s high cost of drilling a well problem as one problem area preventing stronger cash flows. At roughly $10 million per well, Kodiak’s sinking wells with far less fiscal prudence than fellow Bakken players Whiting Petroleum Corp (NYSE:WLL) or Continental Resources, Inc. (NYSE:CLR) , which both report well costs in the $8 million range. If the company can clamp down on this cost, it should be able to move closer to (or into) positive free cash flow territory. On the other hand, Kodiak’s wells have some of the lowest drilling times in the Bakken — it may simply be able to move toward a less-rushed timetable as its resource base widens, without enacting any major technological changes.

Kodiak hasn’t quite won the market’s respect yet, as more than 10% of its shares were sold short at the end of 2012. That number’s at 12% as of this writing, which points to continued uncertainty over the company’s ability to control costs as it grows. Answering this concern would mark Kodiak as a clear winner in the oil and gas space, but it’s definitely one to keep an eye on right now.

Putting the pieces together
Today, Kodiak has many of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Kodiak Oil & Gas Destined for Greatness? originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.The Motley Fool has options on Chesapeake Energy.

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