Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the
“Company”) today announced third quarter 2020 results.
Third Quarter 2020 Highlights
- Revenue was $184 million for the quarter ending September 30,
2020
- Net income was $278 million, or $7.30 per diluted share for the
quarter ending September 30, 2020
- Adjusted EBITDAX was $100 million for the quarter ending
September 30, 2020 (see further discussion regarding the
presentation of adjusted EBITDAX in "About Non-GAAP Financial
Measures" below)
- Emerged from bankruptcy with a strong balance sheet and
liquidity position
On September 1, 2020 (the “Emergence Date”) the Company emerged
from voluntary bankruptcy under Chapter 11 of the Bankruptcy Code.
Beginning on the Emergence Date, the Company applied fresh start
accounting, which resulted in a new basis of accounting, and became
a new entity for financial reporting purposes. As a result of the
application of fresh start accounting and the effects of the
implementation of the Company’s chapter 11 plan of reorganization,
the consolidated financial statements after September 1, 2020 are
not comparable with the consolidated financial statements on or
prior to that date. References to “Successor” refer to the Whiting
entity after emergence from bankruptcy on the Emergence Date.
References to “Predecessor” refer to the Whiting entity prior to
emergence from bankruptcy. References to “Successor Period” refer
to the period from September 1, 2020 through September 30, 2020.
References to “Current Predecessor Quarter” and “Current
Predecessor YTD Period” refer to the periods from July 1, 2020
through August 31, 2020 and January 1, 2020 through August 31,
2020, respectively. References to “Prior Predecessor Quarter” and
“Prior Predecessor YTD Period” refer to the three and nine months
ended September 30, 2019, respectively.
Although GAAP requires that we report on results for the
Successor Period and the Current Predecessor Quarter and Current
Predecessor YTD Period separately, our operating results are
discussed below for the three and nine months ended September 30,
2020 by combining the results of the applicable Predecessor and
Successor periods in order to provide the most meaningful
comparison of our current results to prior periods. Accordingly,
references to “Combined Current Quarter” and “Combined Current YTD
Period” refer to the three and nine months ended September 30,
2020, respectively.
Revenue for the Combined Current Quarter decreased $192 million
to $184 million when comparing to the quarter ending September 30,
2019. A decrease in total production accounted for approximately
$111 million of the change in revenue and decreases in commodity
prices realized accounted for approximately $81 million of the
change in revenue between periods.
Net income for the Combined Current Quarter was $278 million, or
$7.30 per share, as compared to a net loss of $19 million, or $0.21
per share, in the quarter ended September 30, 2019. Adjusted net
loss for the Combined Current Quarter was $13 million or $0.34 per
share.
Adjusted EBITDAX for the Combined Current Quarter was $100
million compared to $236 million for the quarter ended September
30, 2019.
Non-GAAP
Predecessor
Combined Three Months Ended
September 30, 2020
Three Months Ended September
30, 2019
Selected operating statistics:
Production
Oil (MBbl)
5,209
7,441
NGLs (MBbl)
1,641
1,830
Natural gas (MMcf)
10,737
12,536
Total production (MBOE)
8,639
11,361
Average prices
Oil (per Bbl):
Price received
$
34.05
$
49.71
Effect of crude oil hedging (1)
0.01
1.41
Realized price (3)
$
34.06
$
51.12
Weighted average NYMEX price (per Bbl)
(4)
$
40.92
$
56.43
NGLs (per Bbl):
Realized price
$
6.48
$
3.07
Natural gas (per Mcf):
Price received
$
(0.41
)
$
0.03
Effect of natural gas hedging (2)
0.03
-
Realized price
$
(0.38
)
$
0.03
Weighted average NYMEX price (per MMBtu)
(4)
$
1.90
$
2.29
Selected operating metrics
Sales price, net of hedging ($ per
BOE)
$
21.29
$
34.01
Lease operating ($ per BOE)
5.92
7.51
Transportation, gathering, compression and
other ($ per BOE)
0.72
0.98
Depreciation, depletion and amortization
($ per BOE)
10.57
18.58
General and administrative ($ per BOE)
3.11
2.63
Production and ad valorem taxes (% of
sales revenue)
9
%
9
%
_________________________________
(1)
Whiting received $0.04 million and $10 million in pre-tax cash
settlements on crude oil hedges during the three months ended
September 30, 2020 and 2019, respectively. A summary of Whiting’s
outstanding hedges is included in “Commodity Price Hedging” later
in this release.
(2)
Whiting received $0.3 million in pre-tax cash settlements on
natural gas hedges during the three months ended September 30,
2020. A summary of Whiting’s outstanding hedges is included in
“Commodity Price Hedging” later in this release.
(3)
Whiting’s realized prices were reduced by $2.38 per Bbl during the
three months ended September 30, 2019 due deficiency payments under
a contract in our Redtail field. This contract ended in April 2020.
(4)
Average NYMEX prices weighted for monthly production volumes.
Liquidity
Since emergence, the Company paid down approximately $25 million
on its revolver. As of September 30, 2020, the Company had $400
million outstanding on its revolver and $14 million in cash
resulting in total liquidity of $364 million. Whiting expects to
fund its operations fully within operating cash flow through at
least 2021.
Commodity Price Hedging
Whiting uses commodity hedges in order to reduce the effects of
commodity price volatility and to adhere to the requirements of its
credit facility. As of October 30, 2020, the Company has
approximately 1.9 million Bbls of oil hedged at a weighted-average
floor price of approximately $39 per Bbl in 2020, approximately 8.8
million Bbls of oil hedged at a weighted-average floor price of
approximately $39 per Bbl in 2021 and approximately 3.5 million
Bbls of oil hedged at a weighted-average floor price of
approximately $38 per Bbl in 2022. Additionally, the Company has
approximately 2.2 billion British thermal units (“Bbtu”) of natural
gas hedged at a weighted-average floor price of $2.36 per million
British thermal units (“MMbtu”) in 2020, approximately 23.5 Bbtu of
natural gas hedged at a weighted-average floor price of $2.65 per
MMbtu in 2021 and approximately 12.1 Bbtu of natural gas hedged at
a weighted-average floor price of $2.38 per MMbtu in 2022. These
floor prices are the weighted-average of swaps and the floors of
collared transactions.
G & A
G&A expenses decreased to $27 million in the Combined
Current Quarter, which includes $15 million of specific costs
related to restructuring. This compares to $28 million in the
second quarter 2020 and $30 million in the third quarter 2019,
which included $11 million and $8 million of non-recurring items,
respectively.
Operations
During the second quarter, the Company filed for bankruptcy, at
which time all operations were suspended, except for workover
operations. This suspension of operations clearly resulted in a
steep decline in production over the past two quarters. During the
third quarter of 2020, total production averaged 93.9 thousand
barrels of oil equivalent per day (“MBOE/d”), of which 60% was
crude oil, a decrease of 5% from the second quarter of 2020.
Production for the same period of 2019 was 123 MBOE/d.
During the third quarter the Company turned seven wells to
production in the Williston Basin. In the fourth quarter of 2020,
Whiting expects to turn five additional wells to production as well
as commence completion operations on another five wells at year end
that will impact 2021 production. The Company expects capital
expenditures of $27 million during the fourth quarter, bringing
full year capital expenditures to the midpoint of guidance. Due to
the timing of wells put on production during the third and fourth
quarters, combined with completion work being done near the end of
the year, we anticipate fourth quarter production will decline from
the third quarter.
LOE declined to $51 million in the Combined Current Quarter from
$53 million in the second quarter of 2020. This 4% decrease is
primarily due to the company’s focus on saltwater disposal
optimization, lower non-op spending and improved rental agreements.
This also marked a 40% decrease from the same period in 2019.
Whiting continues to focus on costs to improve margins during the
current price environment.
Whiting has consistently outperformed the NDIC requirement for
gas capture since the regulatory requirement began. In September,
Whiting captured 96% of its gas and continues to explore new
technologies to reduce overall emissions.
Outlook for Full-Year
2020
The following table provides guidance for the full-year 2020
based on current forecasts.
Full-Year Guidance
2020
Production (MBOE/d)
98 - 99
Percent Oil
60%
Capital Expenditures (MM)
$ 213 - $ 218
Lease operating expense (MM)
$ 238 - $ 242
Management Comment
Lynn A. Peterson, President and CEO of WLL commented, "The past
quarter saw the Company complete its restructuring work and emerge
from bankruptcy in September. The Whiting team remained extremely
focused during the process and I commend all of our staff for their
efforts.”
Peterson added, “We are in a challenging and volatile commodity
price environment and we will continue to prioritize cash flow
generation. As we look ahead at consensus commodity prices in 2021,
our goals will be 1) to maintain production levels near our 2020
exit rate, and 2) operate within internally generated cash flow,
which in combination should produce an attractive free cash flow
yield. We anticipate holding 2021 spending levels in the same range
as our 2020 capital expenditures to achieve these goals. We believe
this strategy will create value for the Company's stakeholders
while always operating in a safe environment."
Conference Call
WLL will host a conference call on Friday, November 6, 2020 at
11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the
results. The call will be conducted by President and CEO Lynn A.
Peterson, CFO James Henderson, COO Charles J. Rimer and IR Manager
Brandon Day. A Q&A session will immediately follow the
discussion of the results for the quarter.
To participate in this call please
dial: Domestic Dial-in Number: (877) 328-5506
International Dial-in Number: (412) 317-5422 Webcast URL:
https://dpregister.com/sreg/10149456/dc153f7610
Replay Information:
Conference ID #: 10149456 Replay Dial-In (Toll Free US &
Canada): (877) 344-7529 (U.S.), (855) 669-9658 (Canada) Replay
Dial-In (International): (412) 317-0088 Expiration Date: Friday,
November 13, 2020
Selected
Operating and Financial Statistics
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Nine Months Ended September
30, 2019
Selected operating statistics:
Production
Oil (MBbl)
1,746
15,273
17,020
22,435
NGLs (MBbl)
559
4,522
5,081
5,709
Natural gas (MMcf)
3,631
29,667
33,299
38,167
Total production (MBOE)
2,910
24,740
27,650
34,506
Average prices
Oil (per Bbl):
Price received
$
34.58
$
28.86
$
29.45
$
50.51
Effect of crude oil hedging (1)
0.28
3.00
2.72
0.66
Realized price (3)
$
34.86
$
31.86
$
32.17
$
51.17
Weighted average NYMEX price (per Bbl)
(4)
$
39.63
$
38.23
$
38.37
$
56.99
NGLs (per Bbl):
Realized price
$
3.19
$
4.45
$
4.31
$
6.09
Natural gas (per Mcf):
Price received
$
(0.30
)
$
(0.06
)
$
(0.09
)
$
0.62
Effect of natural gas hedging (2)
0.15
(0.01
)
0.01
-
Realized price
$
(0.15
)
$
(0.07
)
$
(0.08
)
$
0.62
Weighted average NYMEX price (per MMBtu)
(4)
$
2.24
$
1.76
$
1.81
$
2.62
Selected operating metrics
Sales price, net of hedging ($ per
BOE)
$
21.34
$
20.39
$
20.49
$
34.96
Lease operating ($ per BOE)
6.37
6.40
6.39
7.43
Transportation, gathering, compression and
other ($ per BOE)
0.68
0.90
0.88
0.93
Depreciation, depletion and amortization
($ per BOE)
6.91
13.69
12.98
17.74
General and administrative ($ per BOE)
3.55
3.71
3.69
2.82
Production and ad valorem taxes (% of
sales revenue)
10
%
9
%
9
%
9
%
_________________________________
(1)
Whiting received $46 million and $15 million in pre-tax cash
settlements on crude oil hedges during the nine months ended
September 30, 2020 and 2019, respectively. A summary of Whiting’s
outstanding hedges is included in “Commodity Price Hedging” earlier
in this release.
(2)
Whiting received $0.3 million in pre-tax cash settlements on
natural gas hedges during the nine months ended September 30, 2020.
A summary of Whiting’s outstanding hedges is included in “Commodity
Price Hedging” earlier in this release.
(3)
Whiting’s realized prices were reduced by $1.42 and $2.05 per Bbl
during the nine months ended September 30, 2020 and 2019,
respectively, due to the Redtail deficiency payments. This contract
ended in April 2020.
(4)
Average NYMEX prices weighted for monthly production volumes.
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Two Months Ended August 31,
2020
Combined Three Months Ended
September 30, 2020
Three Months Ended September
30, 2019
Selected financial data:
(In thousands, except per share data)
Total operating revenues
$
61,084
$
122,558
$
183,642
$
375,891
Total operating expenses
30,877
188,471
219,348
351,253
Total other (income) expense, net
2,122
(247,992
)
(245,870
)
43,705
Net income (loss)
40,270
237,425
277,695
(19,067
)
Per basic share (1)
1.06
2.60
7.30
(0.21
)
Per diluted share (1)
1.06
2.60
7.30
(0.21
)
Adjusted net income (loss) (2)
8,250
(21,130
)
(12,880
)
(35,148
)
Per basic share (1)
0.22
(0.23
)
(0.34
)
(0.38
)
Per diluted share (1)
0.22
(0.23
)
(0.34
)
(0.38
)
Adjusted EBITDAX (2)
34,689
64,838
99,527
235,663
_________________________________
(1)
For the combined three months ended September 30, 2020, the Company
used the Successor’s basic and diluted weighted average share count
to calculate per share amounts.
(2)
Reconciliations of net income (loss) to adjusted net income (loss)
and adjusted EBITDAX are included later in this news release.
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Nine Months Ended September
30, 2019
Selected financial data:
(In thousands, except per share data)
Total operating revenues
$
61,084
$
459,004
$
520,088
$
1,191,644
Total operating expenses
30,877
4,651,298
4,682,175
1,147,122
Total other (income) expense, net
2,122
(170,459
)
(168,337
)
139,574
Net income (loss)
40,270
(3,965,461
)
(3,925,191
)
(93,679
)
Per basic share (1)
1.06
(43.37
)
(103.16
)
(1.03
)
Per diluted share (1)
1.06
(43.37
)
(103.16
)
(1.03
)
Adjusted net income (loss) (2)
8,250
(209,656
)
(201,406
)
(57,821
)
Per basic share (1)
0.22
(2.29
)
(5.29
)
(0.63
)
Per diluted share (1)
0.22
(2.29
)
(5.29
)
(0.63
)
Adjusted EBITDAX (2)
34,689
227,580
262,269
738,176
_________________________________
(1)
For the combined nine months ended September 30, 2020, the Company
used the Successor’s basic and diluted weighted average share count
to calculate per share amounts.
(2)
Reconciliations of net income (loss) to adjusted net income (loss)
and adjusted EBITDAX are included later in this news release.
Third
Quarter and First Nine Month 2020 Costs and Margins
A summary of cash revenues and cash costs on a per BOE basis is
as follows:
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Two Months Ended August 31,
2020
Combined Three Months
Ended September 30, 2020
Three Months Ended September
30, 2019
Sales price, net of hedging
$
20.99
$
21.39
$
21.26
$
34.01
Gain (loss) on hedging activities
0.35
(0.13
)
0.03
-
Lease operating expense
6.37
5.70
5.92
7.51
Transportation, gathering, compression and
other
0.68
0.74
0.72
0.98
Production and ad valorem tax
2.03
1.81
1.88
3.10
Cash general & administrative
3.55
2.74
3.02
2.94
Exploration
1.45
0.47
0.80
0.73
Cash interest expense
0.60
1.33
1.09
3.56
Cash income tax expense
0.80
-
0.27
-
Cash reorganization items
-
5.32
3.53
-
$
5.86
$
3.15
$
4.06
$
15.19
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Nine Months Ended September
30, 2019
Sales price, net of hedging
$
20.99
$
18.55
$
18.81
$
34.96
Gain (loss) on hedging activities
0.35
1.84
1.68
-
Lease operating expense
6.37
6.40
6.39
7.43
Transportation, gathering, compression and
other
0.68
0.90
0.88
0.93
Production and ad valorem tax
2.03
1.67
1.70
2.98
Cash general & administrative
3.55
3.56
3.56
2.68
Exploration
1.45
0.93
0.98
0.82
Cash interest expense
0.60
2.41
2.22
3.52
Cash income tax expense
0.80
0.11
0.18
-
Cash reorganization items
-
2.31
2.07
-
$
5.86
$
2.10
$
2.51
$
16.60
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 September 30,
2020 to be filed with the Securities and Exchange Commission.
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands)
Successor
Predecessor
September 30,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
13,702
$
8,652
Restricted cash
13,233
-
Accounts receivable trade, net
128,577
308,249
Prepaid expenses and other
22,056
14,082
Total current assets
177,568
330,983
Property and equipment:
Oil and gas properties, successful efforts
method
1,829,472
12,812,007
Other property and equipment
72,856
178,689
Total property and equipment
1,902,328
12,990,696
Less accumulated depreciation, depletion
and amortization
(19,447
)
(5,735,239
)
Total property and equipment, net
1,882,881
7,255,457
Other long-term assets
38,007
50,281
TOTAL ASSETS
$
2,098,456
$
7,636,721
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands)
Successor
Predecessor
September 30,
December 31,
2020
2019
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable trade
$
44,171
$
80,100
Revenues and royalties payable
146,767
202,010
Accrued capital expenditures
14,809
64,263
Accrued liabilities and other
63,987
85,007
Accrued lease operating expenses
23,757
38,262
Accrued interest
1,432
53,928
Taxes payable
16,985
26,844
Total current liabilities
311,908
550,414
Long-term debt
400,328
2,799,885
Asset retirement obligations
119,262
131,208
Operating lease obligations
17,749
31,722
Deferred income taxes
-
73,593
Other long-term liabilities
19,723
24,928
Total liabilities
868,970
3,611,750
Commitments and contingencies
Equity:
Predecessor common stock, $0.001 par
value, 225,000,000 shares authorized; 91,743,571 issued and
91,326,469 outstanding as of December 31, 2019
-
92
Successor common stock, $0.001 par value,
500,000,000 shares authorized; 38,051,210 issued and outstanding as
of September 30, 2020
38
-
Additional paid-in capital
1,189,178
6,409,991
Accumulated earnings (deficit)
40,270
(2,385,112
)
Total equity
1,229,486
4,024,971
TOTAL LIABILITIES AND EQUITY
$
2,098,456
$
7,636,721
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per
share data)
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Two Months Ended August 31,
2020
Combined Three Months Ended
September 30, 2020
Three Months Ended September
30, 2019
OPERATING REVENUES
Oil, NGL and natural gas sales
$
61,084
$
122,558
$
183,642
$
375,891
OPERATING EXPENSES
Lease operating expenses
18,526
32,646
51,172
85,320
Transportation, gathering, compression and
other
1,980
4,259
6,239
11,176
Production and ad valorem taxes
5,908
10,362
16,270
35,220
Depreciation, depletion and
amortization
20,110
71,240
91,350
211,025
Exploration and impairment
4,207
10,217
14,424
10,890
General and administrative
10,345
16,513
26,858
29,890
Derivative (gain) loss, net
(30,594
)
43,125
12,531
(30,597
)
Loss on sale of properties
395
1,280
1,675
595
Amortization of deferred gain on sale
-
(1,171
)
(1,171
)
(2,266
)
Total operating expenses
30,877
188,471
219,348
351,253
INCOME FROM OPERATIONS
30,207
(65,913
)
(35,706
)
24,638
OTHER INCOME (EXPENSE)
Interest expense
(2,128
)
(11,379
)
(13,507
)
(48,447
)
Gain (loss) on extinguishment of debt
-
-
-
4,598
Interest income and other
6
139
145
144
Reorganization items
-
259,232
259,232
-
Total other income (expense)
(2,122
)
247,992
245,870
(43,705
)
INCOME (LOSS) BEFORE INCOME
TAXES
28,085
182,079
210,164
(19,067
)
INCOME TAX EXPENSE (BENEFIT)
Current
2,316
-
2,316
-
Deferred
(14,501
)
(55,346
)
(69,847
)
-
Total income tax benefit
(12,185
)
(55,346
)
(67,531
)
-
NET INCOME (LOSS)
$
40,270
$
237,425
$
277,695
$
(19,067
)
INCOME (LOSS) PER COMMON SHARE
Basic
$
1.06
$
2.60
$
7.30
$
(0.21
)
Diluted
$
1.06
$
2.60
$
7.30
$
(0.21
)
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
38,051
91,464
38,051
91,299
Diluted
38,051
91,464
38,051
91,299
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per
share data)
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Nine Months Ended September
30, 2019
OPERATING REVENUES
Oil, NGL and natural gas sales
$
61,084
$
459,004
$
520,088
$
1,191,644
OPERATING EXPENSES
Lease operating expenses
18,526
158,228
176,754
256,384
Transportation, gathering, compression and
other
1,980
22,266
24,246
32,145
Production and ad valorem taxes
5,908
41,204
47,112
102,796
Depreciation, depletion and
amortization
20,110
338,757
358,867
612,166
Exploration and impairment
4,207
4,184,830
4,189,037
44,045
General and administrative
10,345
91,816
102,161
97,437
Derivative (gain) loss, net
(30,594
)
(181,614
)
(212,208
)
7,431
Loss on sale of properties
395
927
1,322
1,681
Amortization of deferred gain on sale
-
(5,116
)
(5,116
)
(6,963
)
Total operating expenses
30,877
4,651,298
4,682,175
1,147,122
INCOME FROM OPERATIONS
30,207
(4,192,294
)
(4,162,087
)
44,522
OTHER INCOME (EXPENSE)
Interest expense
(2,128
)
(73,054
)
(75,182
)
(145,274
)
Gain (loss) on extinguishment of debt
-
25,883
25,883
4,598
Interest income and other
6
211
217
1,102
Reorganization items
-
217,419
217,419
-
Total other income (expense)
(2,122
)
170,459
168,337
(139,574
)
INCOME (LOSS) BEFORE INCOME
TAXES
28,085
(4,021,835
)
(3,993,750
)
(95,052
)
INCOME TAX EXPENSE (BENEFIT)
Current
2,316
2,718
5,034
-
Deferred
(14,501
)
(59,092
)
(73,593
)
(1,373
)
Total income tax benefit
(12,185
)
(56,374
)
(68,559
)
(1,373
)
NET INCOME (LOSS)
$
40,270
$
(3,965,461
)
$
(3,925,191
)
$
(93,679
)
INCOME (LOSS) PER COMMON SHARE
Basic
$
1.06
$
(43.37
)
$
(103.16
)
$
(1.03
)
Diluted
$
1.06
$
(43.37
)
$
(103.16
)
$
(1.03
)
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
38,051
91,423
38,051
91,274
Diluted
38,051
91,423
38,051
91,274
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted Net Income (Loss)
(in thousands, except per
share data)
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Two Months Ended August 31,
2020
Combined Three Months Ended
September 30, 2020
Three Months Ended September
30, 2019
Net income (loss)
$
40,270
$
237,425
$
277,695
$
(19,067
)
Adjustments:
Amortization of deferred gain on sale
-
(1,171
)
(1,171
)
(2,266
)
Loss on sale of properties
395
1,280
1,675
595
Impairment expense
-
7,516
7,516
2,550
(Gain) loss on extinguishment of debt
-
-
-
(4,598
)
Total measure of derivative (gain) loss
reported under U.S. GAAP
(30,594
)
43,125
12,531
(30,597
)
Total net cash settlements received (paid)
on commodity derivatives during the period
1,031
(731
)
300
10,454
Reorganization items, net
-
(259,232
)
(259,232
)
-
Restructuring and other one-time costs
(1)
9,333
6,004
15,337
7,781
Tax impact of basis difference for Whiting
Canadian Holding Company ULC
(12,185
)
(55,346
)
(67,531
)
-
Adjusted net income (loss) (2)
$
8,250
$
(21,130
)
$
(12,880
)
$
(35,148
)
Adjusted net income (loss) per share,
basic (3)
$
0.22
$
(0.23
)
$
(0.34
)
$
(0.38
)
Adjusted net income (loss) per share,
diluted (3)
$
0.22
$
(0.23
)
$
(0.34
)
$
(0.38
)
_________________________________
(1)
Includes severance and restructuring charges incurred during two
separate company restructurings in August 2019 and September 2020,
cash retention incentives paid to Predecessor executives and
directors in 2020 and third-party advisory and legal fees incurred
after emerging from chapter 11 bankruptcy.
(2)
Adjusted net income (loss) and adjusted net income (loss) per share
are non-GAAP measures. 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 income (loss) 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 income (loss) and adjusted net
income (loss) per share 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.
(3)
For the combined three months ended September 30, 2020, the Company
used the Successor’s basic and diluted weighted average share count
to calculate per share amounts.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted Net Income (Loss)
(in thousands, except per
share data)
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Nine Months Ended September
30, 2019
Net income (loss)
$
40,270
$
(3,965,461
)
$
(3,925,191
)
$
(93,679
)
Adjustments:
Amortization of deferred gain on sale
-
(5,116
)
(5,116
)
(6,963
)
Loss on sale of properties
395
927
1,322
1,681
Impairment expense
-
4,161,885
4,161,885
15,729
(Gain) loss on extinguishment of debt
-
(25,883
)
(25,883
)
(4,598
)
Total measure of derivative (gain) loss
reported under U.S. GAAP
(30,594
)
(181,614
)
(212,208
)
7,431
Total net cash settlements received (paid)
on commodity derivatives during the period
1,031
45,483
46,514
14,797
Reorganization items, net
-
(217,419
)
(217,419
)
-
Restructuring and other one-time costs
(1)
9,333
32,888
42,221
7,781
Tax impact of basis difference for Whiting
Canadian Holding Company ULC
(12,185
)
(55,346
)
(67,531
)
-
Adjusted net income (loss) (2)
$
8,250
$
(209,656
)
$
(201,406
)
$
(57,821
)
Adjusted net income (loss) per share,
basic (3)
$
0.22
$
(2.29
)
$
(5.29
)
$
(0.63
)
Adjusted net income (loss) per share,
diluted (3)
$
0.22
$
(2.29
)
$
(5.29
)
$
(0.63
)
_________________________________
(1)
Includes severance and restructuring charges incurred during
two separate company restructurings in August 2019 and September
2020, cash retention incentives paid to Predecessor executives and
directors in 2020, third-party advisory and legal fees incurred
prior to filing for and after emerging from chapter 11 bankruptcy
and a litigation settlement.
(2)
Adjusted net income (loss) and adjusted net income (loss)
per share are non-GAAP measures. 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 income (loss) 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 income (loss) and adjusted net
income (loss) per share 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.
(3)
For the combined nine months ended September 30, 2020, the
Company used the Successor’s basic and diluted weighted average
share count to calculate per share amounts.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted EBITDA and Adjusted EBITDAX
(in thousands)
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Two Months Ended August 31,
2020
Combined Three Months Ended
September 30, 2020
Three Months Ended September
30, 2019
Net income (loss)
$
40,270
$
237,425
$
277,695
$
(19,067
)
Interest expense
2,128
11,379
13,507
48,447
Interest income
(6
)
(139
)
(145
)
-
Income tax expense (benefit)
(12,185
)
(55,346
)
(67,531
)
-
Depreciation, depletion and
amortization
20,110
71,240
91,350
211,025
Amortization of deferred gain on sale
-
(1,171
)
(1,171
)
(2,266
)
Total measure of derivative (gain) loss
reported under U.S. GAAP
(30,594
)
43,125
12,531
(30,597
)
Total cash settlements received (paid) on
commodity derivatives during the period, net of premiums/costs
1,031
(731
)
300
10,454
Non-cash stock-based compensation
-
787
787
(3,531
)
(Gain) loss on extinguishment of debt
-
-
-
(4,598
)
Loss on sale of properties
395
1,280
1,675
595
Reorganization items, net
-
(259,232
)
(259,232
)
-
Restructuring and other one-time costs
(1)
9,333
6,004
15,337
14,311
Adjusted EBITDA (2)
30,482
54,621
85,103
224,773
Exploration and impairment expense
4,207
10,217
14,424
10,890
Adjusted EBITDAX (2)
$
34,689
$
64,838
$
99,527
$
235,663
_________________________________
(1)
Includes severance and restructuring charges incurred during two
separate company restructurings in August 2019 and September 2020,
cash retention incentives paid to Predecessor executives and
directors in 2020 and directors and third-party advisory and legal
fees incurred after emerging from chapter 11 bankruptcy. The
restructuring charges for the three months ended September 30, 2019
exclude forfeitures of $7 million related to non-cash stock-based
compensation which are reflected in “non-cash stock-based
compensation.”
(2)
Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. Such
measures are presented because management believes they provide
useful information to investors for analysis of the Company’s
ability to internally fund debt service, working capital
requirements, acquisitions and exploration and development.
Adjusted EBITDA and Adjusted EBITDAX 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 Income
(Loss) to Adjusted EBITDA and Adjusted EBITDAX
(in thousands)
Successor
Predecessor
Non-GAAP
Predecessor
Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Nine Months Ended September
30, 2019
Net income (loss)
$
40,270
$
(3,965,461
)
$
(3,925,191
)
$
(93,679
)
Interest expense
2,128
73,054
75,182
145,274
Interest income
(6
)
(211
)
(217
)
(2
)
Income tax expense (benefit)
(12,185
)
(56,374
)
(68,559
)
(1,373
)
Depreciation, depletion and
amortization
20,110
338,757
358,867
612,166
Amortization of deferred gain on sale
-
(5,116
)
(5,116
)
(6,963
)
Total measure of derivative (gain) loss
reported under U.S. GAAP
(30,594
)
(181,614
)
(212,208
)
7,431
Total cash settlements received (paid) on
commodity derivatives during the period, net of premiums/costs
1,031
45,483
46,514
14,797
Non-cash stock-based compensation
-
3,719
3,719
5,086
(Gain) loss on extinguishment of debt
-
(25,883
)
(25,883
)
(4,598
)
Loss on sale of properties
395
927
1,322
1,681
Reorganization items, net
-
(217,419
)
(217,419
)
-
Restructuring and other one-time costs
(1)
9,333
32,888
42,221
14,311
Adjusted EBITDA (2)
30,482
(3,957,250
)
(3,926,768
)
694,131
Exploration and impairment expense
4,207
4,184,830
4,189,037
44,045
Adjusted EBITDAX (2)
$
34,689
$
227,580
$
262,269
$
738,176
_________________________________
(1)
Includes severance and restructuring charges incurred during two
separate company restructurings in August 2019 and September 2020,
cash retention incentives paid to Predecessor executives and
directors in 2020, third-party advisory and legal fees incurred
prior to filing for and after emerging from chapter 11 bankruptcy
and a litigation settlement. The restructuring charges for the
three months ended September 30, 2019 exclude forfeitures of $7
million related to non-cash stock-based compensation which are
reflected in “non-cash stock-based compensation.”
(2)
Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. Such
measures are presented because management believes they provide
useful information to investors for analysis of the Company’s
ability to internally fund debt service, working capital
requirements, acquisitions and exploration and development.
Adjusted EBITDA and Adjusted EBITDAX 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.
About
Whiting Petroleum Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an
independent oil and gas company engaged in the development,
production and acquisition of crude oil, NGLs and natural gas
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:
risks associated with our emergence from the chapter 11 bankruptcy;
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,
our ability to comply with debt covenants, periodic
redeterminations of the borrowing base under the Exit Credit
Agreement and our ability to generate sufficient cash flows from
operations to service our indebtedness; 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;
negative impacts from outbreaks of communicable diseases, including
the COVID-19 pandemic; our inability to access oil and gas markets
due to market conditions or operational impediments, including any
court rulings which may result in the inability to transport oil on
the Dakota Access Pipeline; negative impacts from litigation and
legal proceedings, including ongoing claims in connection with the
chapter 11 bankruptcy; the impact of negative shifts in investor
sentiment towards the oil and gas industry; impacts resulting from
the allocation of resources among our strategic opportunities; the
geographic concentration of our operations; impacts to financial
statements as a result of impairment write-downs and other cash and
noncash charges; federal and state initiatives relating to the
regulation of hydraulic fracturing and air emissions; revisions to
reserve estimates as a result of changes in commodity prices,
regulation and other factors; inaccuracies of our reserve estimates
or our assumptions underlying them; the timing of our exploration
and development expenditures; risks relating to decreases in our
credit rating; market availability of, and risks associated with,
transport of oil and gas; our ability to successfully complete
asset dispositions and the risks related thereto; 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;
weakened differentials impacting the price we receive for oil and
natural gas; risks relating to any unforeseen liabilities of ours;
the impacts of hedging on our results of operations; adverse
weather conditions that may negatively impact development or
production activities; uninsured or underinsured losses resulting
from our oil and gas operations; lack of control over non-operated
properties; failure of our properties to yield oil or gas in
commercially viable quantities; the impact and costs of compliance
with laws and regulations governing our oil and gas operations; the
potential impact of changes in laws that could have a negative
effect on the oil and gas industry; impacts of local regulations,
climate change issues, negative public perception of our industry
and corporate governance standards; our ability to replace our oil
and natural gas reserves; unforeseen underperformance of or
liabilities associated with acquired properties or other strategic
partnerships or investments; competition in the oil and gas
industry; any loss of our senior management or technical personnel;
cybersecurity attacks or failures of our telecommunication and
other information technology infrastructure; and other risks
described under the caption “Risk Factors” in Item 1A of our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2020 and our Annual Report on Form 10‑K for the period ended
December 31, 2019. We assume no obligation, and disclaim any duty,
to update the forward-looking statements in this news release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105006163/en/
Company Contact: Brandon Day Title: Investor Relations Manager
Phone: 303‑837‑1661 Email: Brandond@whiting.com
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