WLL Whiting Petroleum Corp

• Q1 2017 Average Production of 117,360 BOE/d at High End of Guidance
• Q1 2017 LOE, G&A and Interest Expense per BOE at Low End of Guidance
• Q1 2017 DD&A per BOE and Oil Differentials below Low End of Guidance
• Enhanced Completion Loomer Wells Tracking 1.5 MMBOE Type Curve
• Raising 2017 Production Forecast and Lowering per BOE Cost Guidance for LOE, G&A, Interest Expense, DD&A and Oil and Gas Differentials

Whiting’s (NYSE: WLL) production in the first quarter 2017 totaled 10.6 million barrels of oil equivalent (MMBOE), comprised of 84% crude oil/natural gas liquids (NGLs). First quarter 2017 production averaged 117,360 barrels of oil equivalent per day (BOE/d), at the high end of guidance. Lease operating expense (LOE) benefited from a comprehensive water-handling plan and a maintenance program that has reduced well downtime across Whiting’s properties. Depreciation, depletion and amortization (DD&A) benefited from enhanced completions and the sale of the Company’s North Dakota midstream assets. Oil differentials benefited from the addition of new pipeline infrastructure in the Williston Basin.

James J. Volker, Whiting’s Chairman, President and CEO, commented, “Whiting continued to deliver strong results while maintaining capital discipline. Our first quarter production came in at the high end of guidance while capex was on target and LOE saw continuing improvements. We have increased our 2017 production guidance and lowered cost guidance to reflect these strong results.”

Mr. Volker continued, “Our enhanced completions continue to exceed expectations across our acreage position. Our Loomer pad in McKenzie County, North Dakota is tracking a 1.5 MMBOE type curve. Additionally, our bank lending group reaffirmed our $2.5 billion borrowing base with no change in terms.”

Operating and Financial Results

The following table summarizes the operating and financial results for the first quarter of 2017 and 2016, including non-cash charges recorded during those periods:

        Three Months Ended March 31, 2017     2016 Production (MBOE/d) (1) 117.36 146.77 Net cash provided by operating activities-MM $ 80.1 $ 45.9 Discretionary cash flow-MM (2) $ 182.6 $ 102.3 Realized price ($/BOE) $ 35.29 $ 25.82 Total operating revenues-MM $ 371.3 $ 289.7 Net loss attributable to common shareholders-MM (3) $ (87.0 ) $ (171.7 ) Per basic share $ (0.24 ) $ (0.84 ) Per diluted share $ (0.24 ) $ (0.84 )   Adjusted net loss attributable to common shareholders-MM (4) $ (54.2 ) $ (174.2 ) Per basic share $ (0.15 ) $ (0.85 ) Per diluted share $ (0.15 ) $ (0.85 ) (1)   First quarter 2016 includes 9,225 BOE/d from properties that have since been divested. (2) A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release. (3) Net loss attributable to common shareholders includes $38 million and $60 million of pre-tax, non-cash derivative losses for the three months ended March 31, 2017 and 2016, respectively. (4) A reconciliation of net loss attributable to common shareholders to adjusted net loss attributable to common shareholders is included later in this news release.  

Raising Production Guidance, Lowering Cost Guidance and Reiterating Capex Guidance

As detailed below, Whiting is raising its full-year production forecast to 45.2 to 46.2 MMBOE and reiterating its $1.1 billion full-year capital budget. The Company is also lowering per BOE cost guidance for LOE, G&A, interest expense, DD&A and oil and gas differentials.

Reaffirmation of $2.5 Billion Borrowing Base

In April 2017, the lenders under Whiting’s revolving credit agreement completed their semi-annual redetermination and reaffirmed a $2.5 billion borrowing base. There were no changes to the covenants, interest rates, fees or repayment terms of the credit line, which matures in December 2019.

Operations Update

Whiting controls 732,819 gross (443,310 net) acres in the Williston Basin and 157,178 gross (132,432 net) acres at its Redtail Niobrara/Codell play in the DJ Basin. In the first quarter 2017, total net production for the Company averaged 117,360 BOE/d. The Bakken/Three Forks play in the Williston Basin averaged 109,125 BOE/d. The Redtail Niobrara/Codell play in the DJ Basin averaged 7,635 BOE/d.

Loomer Wells Tracking 1.5 MMBOE Type Curve. In February 2017, Whiting completed its three-well Loomer pad in McKenzie County, North Dakota. The pad is located significantly west of Whiting’s previously reported enhanced completions in McKenzie County. It was completed with an average of 8.9 million pounds of sand per well. On average, the wells are tracking a 1.5 MMBOE type curve. This further validates the Company’s belief that larger volume completions, which incorporate more frac stages and diverter agents, can be implemented across a significant portion of its acreage. Whiting plans to complete its typical well this year with approximately 9.0 million pounds of sand and has several pilots scheduled to test significantly higher sand volumes per well.

Williston Basin Efficiency Gains Lower Lease Operating Expense. In addition to an increase in capital efficiency through enhanced completions, Whiting believes it has achieved sustainable improvements in operating efficiency that lower LOE per BOE. These include the expansion of water handling systems with lower cost contracts that have reduced saltwater disposal costs by approximately 10%. Also, the Whiting team instituted a comprehensive well maintenance program that minimizes well downtime. Since the beginning of 2015, Whiting has reduced downhole well failure rates by 22% through adopting a robust inspection plan and the use of advanced monitoring and simulation software to improve downhole configurations and material selection.

Redtail Completions on Schedule; Testing New Designs. At its DJ Basin Redtail Field in Weld County, Colorado, Whiting targets the Niobrara “A”, “B” and “C” zones and the Codell/Fort Hays formations. In 2017, the Company plans to complete its entire 105 drilled uncompleted (DUC) well inventory. Whiting currently has two completion crews conducting completion operations in this area. Its first two pads are anticipated to commence production in May and consist of an eight-well pad that will test 50 stages and 5 million pounds of sand per well and a seven-well pad that will test 50 stages and 8 million pounds of sand per well. Consistent with its initial 2017 guidance, Whiting recently added its second completion crew to expedite DUC conversions.

Other Financial and Operating Results

The following table summarizes the Company’s net production and commodity price realizations for the quarters ended March 31, 2017 and 2016:

    Three Months Ended     March 31, 2017     2016 Change

Production

Oil (MMBbl) 7.30 9.96 (27 %) NGLs (MMBbl) 1.62 1.64 (1 %) Natural gas (Bcf) 9.87 10.51 (6 %) Total equivalent (MMBOE) (1) 10.56 13.36 (21 %)  

Average sales price

Oil (per Bbl): Price received $ 43.92 $ 27.07 62 % Effect of crude oil hedging (2)   0.20   5.54 Realized price $ 44.12 $ 32.61 35 % Weighted average NYMEX price (per Bbl) (3) $ 51.87 $ 33.52 55 %  

NGLs (per Bbl):

Realized price $ 17.69 $ 5.48 223 %  

Natural gas (per Mcf):

Realized price $ 2.25 $ 1.05 114 % Weighted average NYMEX price (per MMBtu) (3) $ 3.06 $ 2.05 49 % (1)   First quarter 2016 includes 9,225 BOE/d from properties that have since been divested. (2) Whiting received $1 million and $55 million in pre-tax cash settlements on its crude oil hedges during the first quarter of 2017 and 2016, respectively. A summary of Whiting’s outstanding hedges is included later in this news release. (3) Average NYMEX prices weighted for monthly production volumes.  

First Quarter 2017 Costs and Margins

A summary of production, cash revenues and cash costs on a per BOE basis is as follows:

        Three Months Ended March 31, 2017     2016 (per BOE, except production) Production (MMBOE) 10.56 13.36   Sales price, net of hedging $ 35.29 $ 25.82 Lease operating expense 8.56 8.56 Production tax 3.03 1.94 Cash general & administrative 2.34 2.86 Exploration 0.58 1.54 Cash interest expense 3.83 4.53 Cash income tax expense (benefit)   (0.18 )   - $ 17.13   $ 6.39  

First Quarter 2017 Drilling and Expenditures Summary

The table below summarizes Whiting’s operated and non-operated drilling activity and capital expenditures for the three months ended March 31, 2017.

    Gross/Net Wells Completed             Total New     % Success CAPEX Producing Non-Producing Drilling Rate (in MM) Q1 17 48 / 15.4 0 / 0 48 / 15.4 100% / 100%

$

185.8(1)

(1)   Includes $11 million for non-operated drilling and completion and $2 million for land.  

Outlook for Second Quarter and Full-Year 2017

The following table provides guidance for the second quarter and full-year 2017 based on current forecasts, including Whiting’s full-year 2017 capital budget of $1.1 billion:

            Guidance Second Quarter Full Year 2017 2017 Production (MMBOE) 10.2 - 10.8 45.2 - 46.2 Lease operating expense per BOE $ 8.25 - $ 8.75 $ 8.25 - $ 8.75 General and administrative expense per BOE $ 2.90 - $ 3.30 $ 2.70 - $ 3.10 Interest expense per BOE (1) $ 4.20 - $ 4.80 $ 4.00 - $ 4.60 Depreciation, depletion and amortization per BOE $ 22.25 - $ 23.25 $ 22.00 - $ 23.00 Production taxes (% of sales revenue) 8.6% - 9.0% 8.6% - 9.0% Oil price differentials to NYMEX per Bbl (2) ($ 8.00) - ($ 9.00) ($ 7.50) - ($ 8.50) Gas price differential to NYMEX per Mcf ($ 0.80) - ($ 1.20) ($ 0.80) - ($ 1.20) (1)   Includes non-cash interest expense primarily related to Whiting’s convertible 2020 notes. Full-year 2017 cash interest expense is projected at $3.35 - $3.75 per BOE. (2) Does not include the effects of NGLs.  

Commodity Derivative Contracts

Whiting is 53% hedged for 2017 as a percentage of March 2017 production.

The following summarizes Whiting’s crude oil hedges as of March 31, 2017:

            Weighted Average     As a Percentage of Derivative Hedge Contracted Crude NYMEX Price March 2017 Instrument Period (Bbls per Month) (per Bbl) Oil Production Three-way collars (1) 2017 Q2 1,050,000 $34.76 - $45.00 - $60.26 42.4% Q3 1,050,000 $34.76 - $45.00 - $60.26 42.4% Q4 1,050,000 $34.76 - $45.00 - $60.26 42.4% 2018 Q1 200,000 $40.00 - $50.00 - $61.40 8.1% Q2 200,000 $40.00 - $50.00 - $61.40 8.1% Q3 200,000 $40.00 - $50.00 - $61.40 8.1% Q4 200,000 $40.00 - $50.00 - $61.40 8.1% Collars 2017 Q2 250,000 $53.00 - $70.44 10.1% Q3 250,000 $53.00 - $70.44 10.1% Q4 250,000 $53.00 - $70.44 10.1% (1)   A three-way collar is a combination of options: a sold call, a purchased put and a sold put. The sold call establishes a maximum price (ceiling) we will receive for the volumes under contract. The purchased put establishes a minimum price (floor), unless the market price falls below the sold put (sub-floor), at which point the minimum price would be NYMEX plus the difference between the purchased put and the sold put strike price.  

Selected Operating and Financial Statistics

    Three Months Ended March 31, 2017     2016 Selected operating statistics: Production Oil, MBbl 7,297 9,962 NGLs, MBbl 1,619 1,642 Natural gas, MMcf 9,872 10,514 Oil equivalents, MBOE (1) 10,562 13,356 Average prices Oil per Bbl (excludes hedging) $ 43.92 $ 27.07 NGLs per Bbl $ 17.69 $ 5.48 Natural gas per Mcf $ 2.25 $ 1.05 Per BOE data Sales price (including hedging) $ 35.29 $ 25.82 Lease operating $ 8.56 $ 8.56 Production taxes $ 3.03 $ 1.94 Depreciation, depletion and amortization $ 22.76 $ 23.38 General and administrative $ 2.90 $ 3.35 Selected financial data: (In thousands, except per share data) Total operating revenues $ 371,317 $ 289,697 Total operating expenses $ 448,823 $ 535,728 Total other income (expense), net $ (48,941 ) $ 9,107 Net loss attributable to common shareholders $ (86,957 ) $ (171,748 ) Loss per common share, basic $ (0.24 ) $ (0.84 ) Loss per common share, diluted $ (0.24 ) $ (0.84 )  

Weighted average shares outstanding, basic

362,610 204,367 Weighted average shares outstanding, diluted 362,610 204,367 Net cash provided by operating activities $ 80,070 $ 45,948 Net cash provided by (used in) investing activities $ 243,140 $ (260,263 ) Net cash provided by (used in) financing activities $ (380,006 ) $ 199,323 (1)   First quarter 2016 includes 9,225 BOE/d from properties that have since been divested.  

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, to be filed with the Securities and Exchange Commission.

WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands)       March 31,     December 31, 2017 2016 ASSETS Current assets: Cash and cash equivalents $ 16,429 $ 55,975 Restricted cash - 17,250 Accounts receivable trade, net 184,630 173,919 Prepaid expenses and other 42,963 26,312 Assets held for sale (1)   -     349,146   Total current assets   244,022     622,602   Property and equipment: Oil and gas properties, successful efforts method 13,395,424 13,230,851 Other property and equipment   132,513     134,638   Total property and equipment 13,527,937 13,365,489 Less accumulated depreciation, depletion and amortization   (4,482,880 )   (4,222,071 ) Total property and equipment, net   9,045,057     9,143,418   Other long-term assets   98,628     110,122   TOTAL ASSETS $ 9,387,707   $ 9,876,142   (1)   As of December 31, 2016, “Assets held for sale” is comprised of Whiting’s North Dakota midstream assets. This transaction closed on January 1, 2017.   WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share and per share data)       March 31,     December 31, 2017 2016 LIABILITIES AND EQUITY Current liabilities: Accounts payable trade $ 46,700 $ 32,126 Revenues and royalties payable 141,500 147,226 Accrued capital expenditures 85,087 56,830 Accrued interest 24,392 44,749 Accrued lease operating expenses 49,825 45,015 Accrued liabilities and other 31,970 63,538 Taxes payable 30,547 39,547 Derivative liabilities 23,309 17,628 Accrued employee compensation and benefits 9,999 31,134 Liabilities related to assets held for sale   -     538   Total current liabilities 443,329 478,331 Long-term debt 3,168,259 3,535,303 Deferred income taxes 438,102 475,689 Asset retirement obligations 174,668 168,504 Deferred gain on sale 34,451 35,424 Other long-term liabilities   65,631     33,699   Total liabilities   4,324,440     4,726,950   Commitments and contingencies Equity: Common stock, $0.001 par value, 600,000,000 shares authorized; 368,008,774 issued and 362,698,464 outstanding as of March 31, 2017 and 367,174,542 issued and 362,013,928 outstanding as of December 31, 2016 368 367 Additional paid-in capital 6,390,700 6,389,435 Accumulated deficit   (1,335,749 )   (1,248,572 ) Total Whiting shareholders' equity 5,055,319 5,141,230 Noncontrolling interest   7,948     7,962   Total equity   5,063,267     5,149,192   TOTAL LIABILITIES AND EQUITY $ 9,387,707   $ 9,876,142     WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data)       Three Months Ended March 31, 2017     2016 OPERATING REVENUES Oil, NGL and natural gas sales $ 371,317 $ 289,697   OPERATING EXPENSES Lease operating expenses 90,393 114,376 Production taxes 32,056 25,927 Depreciation, depletion and amortization 240,407 312,292 Exploration and impairment 20,841 35,491 General and administrative 30,617 44,796 Derivative loss, net 36,577 4,761 Loss on sale of properties 1,274 1,934 Amortization of deferred gain on sale   (3,342 )   (3,849 ) Total operating expenses   448,823     535,728     LOSS FROM OPERATIONS (77,506 ) (246,031 )   OTHER INCOME (EXPENSE) Interest expense (48,011 ) (81,907 ) Gain (loss) on extinguishment of debt (1,540 ) 90,619 Interest income and other   610     395   Total other income (expense)   (48,941 )   9,107     LOSS BEFORE INCOME TAXES (126,447 ) (236,924 )   INCOME TAX EXPENSE (BENEFIT): Current (1,890 ) 3 Deferred   (37,586 )   (65,169 ) Total income tax benefit   (39,476 )   (65,166 )   NET LOSS (86,971 ) (171,758 ) Net loss attributable to noncontrolling interests   14     10     NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (86,957 ) $ (171,748 )   LOSS PER COMMON SHARE: Basic $ (0.24 ) $ (0.84 ) Diluted $ (0.24 ) $ (0.84 )   WEIGHTED AVERAGE SHARES OUTSTANDING Basic   362,610     204,367   Diluted   362,610     204,367       WHITING PETROLEUM CORPORATION

Reconciliation of Net Loss Attributable to Common Shareholders to Adjusted Net Loss Attributable to Common Shareholders

(in thousands, except per share data)       Three Months Ended March 31, 2017     2016 Net loss attributable to common shareholders $ (86,957 ) $ (171,748 ) Adjustments: Amortization of deferred gain on sale (3,342 ) (3,849 ) Loss on sale of properties 1,274 1,934 Impairment expense 14,703 14,972 Penalties for early termination of drilling rig contracts - 13,687 (Gain) loss on extinguishment of debt 1,540 (90,619 ) Total measure of derivative loss reported under U.S. GAAP 36,577 4,761 Total net cash settlements received on commodity derivatives during the period 1,470 55,162 Tax impact of adjustments above   (19,478 )   1,470   Adjusted net loss attributable to common shareholders (1) $ (54,213 ) $ (174,230 )   Adjusted net loss attributable to common shareholders per share, basic $ (0.15 ) $ (0.85 ) Adjusted net loss attributable to common shareholders per share, diluted $ (0.15 ) $ (0.85 ) (1)   Adjusted Net Loss Attributable to Common Shareholders is a non-GAAP financial measure. Management believes it provides useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that Adjusted Net Loss Attributable to Common Shareholders is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted Net Loss Attributable for Common Shareholders should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.   WHITING PETROLEUM CORPORATION Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow (in thousands)           Three Months Ended March 31, 2017     2016 Net cash provided by operating activities $ 80,070 $ 45,948 Exploration 6,138 20,519 Changes in working capital   96,381   35,826 Discretionary cash flow (1) $ 182,589 $ 102,293 (1)   Discretionary cash flow is a non-GAAP measure. Discretionary cash flow is presented because management believes it provides useful information to investors for analysis of the Company’s ability to internally fund acquisitions, exploration and development. Discretionary cash flow should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.  

Conference Call

The Company’s management will host a conference call with investors, analysts and other interested parties on Thursday, April 27, 2017 at 11:00 a.m. EDT (10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting’s first quarter 2017 financial and operating results. Participants are encouraged to pre-register for the conference call by clicking on the following link: http://dpregister.com/10105010. Callers who pre-register will be given a unique telephone number and PIN to gain immediate access on the day of the call.

Those without internet access or unable to pre-register may join the live call by dialing: (877) 328-5506 (U.S.); (866) 450-4696 (Canada) or (412) 317-5422 (International) to be connected to the call. Presentation slides will be available at http://www.whiting.com by clicking on the “Investor Relations” box on the menu and then on the link titled "Presentations & Events."

A telephonic replay will be available beginning one to two hours after the call on Thursday, April 27, 2017 and continuing through Thursday, May 4, 2017. You may access this replay at (877) 344-7529 (U.S.); 855-669-9658 (Canada) or (412) 317-0088 (International) and enter the pass code 10105010. You may also access a web archive at http://www.whiting.com beginning one to two hours after the conference call.

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that develops, produces, acquires and explores for crude oil, natural gas and natural gas liquids primarily in the Rocky Mountains region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Montana and the Niobrara play in northeast Colorado. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

Forward-Looking Statements

This news release contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.

These risks and uncertainties include, but are not limited to: declines in or extended periods of low oil, NGL or natural gas prices; our level of success in exploration, development and production activities; risks related to our level of indebtedness, ability to comply with debt covenants and periodic redeterminations of the borrowing base under our credit agreement; impacts to financial statements as a result of impairment write-downs; our ability to successfully complete asset dispositions and the risks related thereto; revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors; adverse weather conditions that may negatively impact development or production activities; the timing of our exploration and development expenditures; inaccuracies of our reserve estimates or our assumptions underlying them; risks relating to any unforeseen liabilities of ours; our ability to generate sufficient cash flows from operations to meet the internally funded portion of our capital expenditures budget; our ability to obtain external capital to finance exploration and development operations; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; unforeseen underperformance of or liabilities associated with acquired properties; the impacts of hedging on our results of operations; failure of our properties to yield oil or gas in commercially viable quantities; availability of, and risks associated with, transport of oil and gas; our ability to drill producing wells on undeveloped acreage prior to its lease expiration; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; uninsured or underinsured losses resulting from our oil and gas operations; our inability to access oil and gas markets due to market conditions or operational impediments; the impact and costs of compliance with laws and regulations governing our oil and gas operations; the potential impact of changes in laws, including tax reform, that could have a negative effect on the oil and gas industry; our ability to replace our oil and natural gas reserves; any loss of our senior management or technical personnel; competition in the oil and gas industry; cyber security attacks or failures of our telecommunication systems; and other risks described under the caption “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2016. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.

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Whiting Petroleum CorporationEric K. Hagen, 303-837-1661Vice President, Investor RelationsEric.Hagen@whiting.com