Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the
“Company”) today issued preliminary fourth quarter 2020 operating
results.
3 Months Ended
12 Months Ended
12/31/2020
12/31/2020
Average Daily
Volumes
Oil Production (MBO/d)
55.5
60.5
Total Production (MBOE/d)
91.7
98.6
Oil %
61%
61%
Product Price
Received (before hedging)
Crude oil ($/Bbl)
$37.89
$31.40
NGL Price ($/Bbl)
$6.88
$4.91
Natural Gas ($/Mcf)
$0.75
$0.11
Differentials
NYMEX WTI ($/Bbl)
($4.70)
($7.95)
Natural Gas Liquids (% of WTI)
18%
16%
NYMEX Henry Hub ($/Mcf)
($1.76)
($1.87)
Expenses
($MM)
Lease Operating Expense
$55
$232
Transportation, Gathering Compression and
other Expense
$6
$30
General and Administrative
$11
$114
Activity
Summary
Capital Expenditures ($MM)
$21
$209
Operated Wells Drilled (Gross/Net)
0 / 0.0
35 / 24.0
Operated Wells Completed (Gross/Net)
4 / 2.6
45 / 29.0
Operated Wells Turned in-line
(Gross/Net)
5 / 3.9
48 / 29.6
For the fourth quarter of 2020, oil production exceeded the high
end of the Company’s guidance as it was positively impacted by a
higher oil percentage from wells turned in line during the quarter,
as well as a slightly lower decline rate on base production. The
Company also benefited from mild weather allowing for continuous
workover activity.
Lease operating expense was lower than guidance primarily due to
less well repair activity, primarily related to extended ESP run
times. Capital expenditures were also slightly lower than expected
due to the timing of some facility expenditures and completion
activity. The Company continues to benefit in both areas from its
cost-cutting measures and renegotiated contract terms.
General and administrative expenses included restructuring and
related non-recurring costs totaling approximately $3 million for
the fourth quarter of 2020 and $45 million for the full year of
2020. Net of this amount, the expenses were in line with the
Company’s expectations and, for the quarter, reflect the lower cost
structure that was implemented during 2020. As reflected in its
guidance, the Company expects G&A to increase from this past
quarterly amount as certain costs are resumed post-bankruptcy and
as the pandemic environment recedes. In addition, the Company will
begin accruing for its redesigned employee and executive
performance incentive plan as described below.
Proved Reserves
As of December 31, 2020, our estimated proved reserves totaled
260 million barrels of oil equivalent (MMBOE). The PV10% was $1,197
million using SEC pricing, as noted below.
The following table summarizes by area, our estimated proved
reserves as of December 31, 2020 with the corresponding pre-tax
PV10% values:
Proved Reserves (1)
Pre-Tax
Natural
PV10%
Oil
NGLs
Gas
Total
%
Value (2)
Area
(MMBbl)
(MMBbl)
(Bcf)
(MMBOE)
Oil
(in millions)
North Dakota & Montana
154.2
44.7
281.1
245.8
63
%
$
1,113
Colorado and Other
9.0
1.7
22.5
14.4
63
%
84
Total
163.2
46.4
303.6
260.2
63
%
$
1,197
(1)
Oil and gas reserve quantities and related discounted future net
cash flows have been derived from a WTI oil price of $39.57 per Bbl
and a Henry Hub gas price of $1.99 per MMBtu, which were calculated
using an average of the first-day-of-the-month price for each month
within the 12 months ended December 31, 2020 as required by current
SEC and FASB guidelines.
(2)
Pre-tax PV10% may be considered a non-GAAP financial measure as
defined by the SEC and is derived from the standardized measure of
discounted future net cash flows (the “Standardized Measure”),
which is the most directly comparable GAAP financial measure. Our
Standardized Measure equaled $1,191 million and reflected a $6
million discounted future income tax expense. Pre-tax PV10% is
computed on the same basis as the Standardized Measure but without
deducting future income taxes. We believe pre-tax PV10% is a useful
measure for investors when evaluating the relative monetary
significance of our oil and natural gas properties. We further
believe investors may utilize our pre-tax PV10% as a basis for
comparison of the relative size and value of our proved reserves to
other companies because many factors that are unique to each
individual company impact the amount of future income taxes to be
paid. Our management uses this measure when assessing the potential
return on investment related to our oil and gas properties and
acquisitions. However, pre-tax PV10% is not a substitute for the
Standardized Measure. Our pre-tax PV10% and Standardized Measure do
not purport to present the fair value of our proved oil, NGL and
natural gas reserves.
Executive Compensation
Whiting also announced recent changes to its executive
compensation program which are designed to implement an
industry-leading compensation structure that aligns earned payments
with shareholder interests. Relative to historical industry
practice, the new structure prioritizes greater alignment with
absolute returns to shareholders and places a greater emphasis on
free cash flow.
Key features of the new compensation structure include:
- Short-term incentive metrics focused on returns and long-term
cash generation;
- Mandatory stock settlement for our CEO, CFO and COO of any
portion of the short-term incentive paid above target;
- Long-term incentives heavily weighted toward performance-based
awards (70% for our CEO, 60% for our CFO and COO);
- Use of absolute total stockholder return as the sole
performance metric for a significant portion of our
performance-based long-term incentives;
- In the event of a change in control, payment of one third of
the CEO severance will be in stock with a mandatory
post-termination holding period.
Management Comment
Lynn A. Peterson, President and CEO of Whiting, commented. “We
remain focused on generating value for our shareholders. As such, a
new compensation plan has been established that further aligns
management with our shareholders. The new plan prioritizes
shareholder returns and cash generation, while keeping continued
focus on sustainability, maintenance of production levels and
achievement of strategic goals.
Reflecting on the recent increase in oil prices Peterson noted,
“Using an oil price of $50 per barrel and a natural gas price of $3
per MMBtu, the Company’s estimated proved reserves increase by
approximately 20% and its estimated PV10% doubles. The increase in
pricing also has a dramatic impact on our drillable inventory as
shown in our latest investor presentation.”
Other Business
On January 26, 2021, Whiting agreed to a settlement with a
general unsecured claimant and certain of its affiliates and
thereafter released 948,897 shares from the bankruptcy claims pool.
These shares have a lock-up feature which prevents the sale of more
than 15% of the shares during any thirty-day period during the
six-month period following the issuance of the shares.
Conference Call
WLL will host a conference call on Thursday, February 25, 2021
at 9:00 a.m. Eastern time (7:00 a.m. Mountain time) to discuss its
fourth quarter 2020 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/10152247/e26abb863d
Replay Information:
Conference ID #: 10152247 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: March 04, 2021
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 bankruptcy; declines in,
or extended periods of low oil, NGL or natural gas prices; the
occurrence of epidemic or pandemic diseases, including the COVID-19
pandemic; actions of OPEC and other oil exporting nations to set
and maintain production levels; the potential shutdown of the
Dakota Access Pipeline; our level of success in development and
production activities; impacts resulting from the allocation of
resources among our strategic opportunities; our ability to replace
our oil and natural gas reserves; the geographic concentration of
our operations; our inability to access oil and gas markets due to
market conditions or operational impediments; market availability
of, and risks associated with, transport of oil and gas; weakened
differentials impacting the price we receive for oil and natural
gas; our ability to successfully complete asset acquisitions and
dispositions and the risks related thereto; shortages of or delays
in obtaining qualified personnel or equipment, including drilling
rigs and completion services; the timing of our development
expenditures; properties that we acquire may not produce as
projected and may have unidentified liabilities; adverse weather
conditions that may negatively impact development or production
activities; we may incur substantial losses and be subject to
liability claims as a result of our oil and gas operations,
including uninsured or underinsured losses resulting from our oil
and gas operations; lack of control over non-operated properties;
unforeseen underperformance of or liabilities associated with
acquired properties or other strategic partnerships or investments;
competition in the oil and gas industry; cybersecurity attacks or
failures of our telecommunication and other information technology
infrastructure; our ability to comply with debt covenants, periodic
redeterminations of the borrowing base under our 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; 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 impacts of hedging on our results of
operations; our ability to use net operating loss carryforwards in
future periods; impacts to financial statements as a result of
impairment write-downs and other cash and noncash charges; the
impact of negative shifts in investor sentiment towards the oil and
gas industry; federal and state initiatives relating to the
regulation of hydraulic fracturing and air emissions; the Biden
administration could enact regulations that impose more onerous
permitting and other costly environmental, health and safety
requirements; 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 perception of our industry and corporate
governance standards; negative impacts from litigation and legal
proceedings; 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/20210216006142/en/
Brandon Day Investor Relations Manager 303-837-1661
Brandond@whiting.com
Whiting Petroleum (NYSE:WLL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Whiting Petroleum (NYSE:WLL)
Historical Stock Chart
From Sep 2023 to Sep 2024