- Q1 2018 Average Production of
127,050 BOE/d above Midpoint of Guidance
- Q1 2018 Diluted Earnings per Share
of $0.16 and Adjusted Earnings per Share of $0.92
- Q1 2018 Net Cash Provided by
Operating Activities Exceeded Capital Expenditures by $46 Million
and Discretionary Cash Flow Exceeded Capital Expenditures by $103
Million
- Q1 2018 DD&A per BOE
Significantly below Low End of Guidance
- Oil Differentials per Bbl and
Natural Gas Differentials per Mcf below Low End of
Guidance
Whiting’s (NYSE: WLL) production in the first quarter
2018 totaled 11.4 million barrels of oil equivalent (MMBOE),
comprised of 84% crude oil/natural gas liquids (NGLs). First
quarter 2018 production averaged 127,050 barrels of oil equivalent
per day (BOE/d) and came in above the midpoint of guidance. Capex
for the first quarter 2018 was $187 million. First quarter 2018 net
cash provided by operating activities of $233 million exceeded
capital expenditures by $46 million and first quarter 2018
discretionary cash flow of $290 million exceeded capital
expenditures by $103 million. Whiting’s depreciation, depletion and
amortization (DD&A) of $16.43 per BOE, oil differentials of
$4.31 per barrel (Bbl) and natural gas differentials of $1.48 per
thousand cubic feet (Mcf) all came in below the low end of
guidance. Guidance at the midpoint for such metrics called for
$17.50 per BOE, $4.50 per Bbl and $1.50 per Mcf, respectively.
During the first quarter 2018 and subsequent to the quarter, the
Company added to its hedges and is now 71% hedged for 2018 and 15%
hedged for 2019 as a percentage of March 2018 production with a mix
of swaps and collars as detailed later in the press release.
Operating and Financial
Results
The following table summarizes the operating and financial
results for the first quarter of 2018 and 2017, including non-cash
charges recorded during those periods:
Three Months Ended March
31, 2018 2017 Production (MBOE/d)
(1) 127.05 117.36 Net cash provided by operating activities-MM $
232.9 $ 80.1 Discretionary cash flow-MM (2) $ 290.5 $ 182.6
Realized price ($/BOE) $ 42.87 $ 35.29 Total operating revenues-MM
$ 515.1 $ 371.3 Net income (loss) attributable to common
shareholders-MM (3) $ 15.0 $ (87.0 ) Per basic share (4) $ 0.17 $
(0.96 ) Per diluted share (4) $ 0.16 $ (0.96 ) Adjusted net
income (loss) attributable to common shareholders-MM (5) $ 83.7 $
(54.2 ) Per basic share (4) $ 0.92 $ (0.60 ) Per diluted share (4)
$ 0.92 $ (0.60 )
(1)
First quarter 2017 includes 8,220 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 income (loss) attributable to common shareholders includes $28
million and $38 million of pre-tax, non-cash derivative losses for
the three months ended March 31, 2018 and 2017, respectively.
(4)
All per share amounts have been retroactively adjusted for the 2017
period to reflect the Company’s one-for-four reverse stock split in
November 2017.
(5)
A reconciliation of net income (loss) attributable to common
shareholders to adjusted net income (loss) attributable to common
shareholders is included later in this news release.
Bradley J. Holly, Whiting’s President and CEO, commented, “I am
pleased we delivered another solid quarter here at Whiting. The
team did a great job managing through a heavy winter, allowing us
to meet our first quarter goals. For the second quarter in a row,
Whiting generated discretionary cash flow that significantly
exceeded its capital expenditures. As we move through the second
quarter into the summer months, we plan to increase our pace of
operations in the Bakken in order to accelerate our growth profile.
We remain on target with our $750 million capex budget as the focus
shifts from Redtail drilled uncompleted wells to Bakken development
in the second half of the year. As you can see in our operational
results, our Company remains a leader in implementing optimized
completions to unlock the full value of its Bakken assets.”
Operations Update
In the first quarter 2018, total net production for the Company
averaged 127,050 BOE/d. The Bakken/Three Forks play in the
Williston Basin averaged 103,115 BOE/d. The Redtail Niobrara/Codell
play in the DJ Basin averaged 23,300 BOE/d.
Whiting Successfully Tests Optimized Completion in Southern
Hidden Bench Area. Subsequent to the quarter, the Company
completed a noteworthy single-well pad in its southern Hidden Bench
area of McKenzie County, North Dakota. The Mallow 34-8H targeted
the Bakken formation and tested at a 24-hour IP rate of 4,837
BOE/d. The well used Whiting’s new optimized completion philosophy
and was fracture-stimulated in 40 stages with 8.7 million pounds of
proppant. This well significantly outperformed the test rates on an
offsetting three-well pad that was completed in 2013. The
offsetting Smokey 2-17-5 pad had an average 24-hour IP rate of
2,647 BOE/d. These wells were completed in the Middle Bakken and
Three Forks formations with an average of 30 stages and
3.8 million pounds of proppant.
Third-Party Gas Processing Outage Impacts Outlook. On
April 19, 2018, a third-party gas plant operator informed Whiting
it plans to conduct unscheduled gas plant maintenance for the
majority of the month of May. The plant processes nearly all of the
natural gas produced at Whiting’s Sanish field. The Company does
not anticipate the plant outage will have an impact on oil sales.
The impact on production is a reduction of 150,000 BOE of gas and
NGL sales. The impact on discretionary cash flow is a reduction of
approximately $2 million. Whiting has reduced its second quarter
2018 outlook to reflect the impact of this unscheduled maintenance.
The Company’s full-year production guidance remains unchanged.
First Quarter 2018 Capital Expenditures
and Activity Summary
During the first quarter 2018, Whiting’s capital expenditures
totaled $187 million. This includes $6 million for non-operated
drilling and completion, $3 million for land and $1 million for
facilities. Whiting drilled 24 wells in its Williston Basin area
and no wells in its Redtail area during the quarter. The Company
put 19 wells on production in the Williston Basin and 6 wells on
production at Redtail during the quarter.
Other Financial and Operating
Results
The following table summarizes the Company’s net production and
commodity price realizations for the quarters ended March 31, 2018
and 2017:
Three Months Ended March
31, 2018 2017 Change
Production
Oil (MMBbl) 7.74 7.30 6 % NGLs (MMBbl) 1.82 1.62 12 % Natural gas
(Bcf) 11.27 9.87 14 % Total equivalent (MMBOE) (1) 11.43 10.56 8 %
Average sales
price
Oil (per Bbl): Price received $ 58.61 $ 43.92 33 % Effect of crude
oil hedging (2) (3.21 ) 0.20 Realized price (3) $
55.40 $ 44.12 26 % Weighted average NYMEX price (per Bbl)
(4) $ 62.92 $ 51.87 21 % NGLs (per Bbl): Realized
price $ 23.57 $ 17.69 33 % Natural gas (per Mcf):
Realized price $ 1.65 $ 2.25 (27 %) Weighted average NYMEX
price (per MMBtu) (4) $ 3.13 $ 3.06 2 %
(1)
First quarter 2017 includes 8,220 BOE/d from properties that
have since been divested.
(2)
Whiting paid $25 million and received $1 million in pre-tax cash
settlements on its crude oil hedges during the first quarter of
2018 and 2017, respectively. A summary of Whiting’s outstanding
hedges is included later in this news release.
(3)
Whiting’s realized price was reduced by $1.09 per Bbl and $2.21 per
Bbl in the first quarter of 2018 and 2017, respectively, due to the
Redtail fixed fee differential deficiency payment. The remaining
contract ends in April 2020.
(4)
Average NYMEX prices weighted for monthly production volumes.
First Quarter 2018 and 2017 Costs and
Margins
A summary of production and cash revenues and cash costs on a
per BOE basis is as follows:
Three Months Ended March
31, 2018 2017 (per BOE, except
production) Production (MMBOE) 11.43 10.56 Sales price,
net of hedging $ 42.87 $ 35.29 Lease operating expense 8.10 8.56
Production tax 3.31 3.03 Cash general & administrative 2.35
2.34 Exploration 0.41 0.58 Cash interest expense 3.94 3.83 Cash
income tax benefit - (0.18 ) $ 24.76 $ 17.13
Outlook for Second Quarter and
Full-Year 2018
The following table provides guidance for the second quarter and
full-year 2018 based on current forecasts, including Whiting’s
full-year 2018 capital budget of $750 million:
Guidance Second Quarter
Full Year 2018 2018 Production (MMBOE) 11.0 -
11.5 46.5 - 47.2 Lease operating expense per BOE $ 7.90 - $ 8.50 $
7.90 - $ 8.30 General and administrative expense per BOE $ 2.70 - $
3.00 $ 2.60 - $ 2.90 Interest expense per BOE $ 4.00 - $ 4.40 $
4.00 - $ 4.40 Depreciation, depletion and amortization per BOE
$16.00 - $17.00 $16.00 - $17.00 Production taxes (% of sales
revenue) 7.7% - 8.3% 7.8% - 8.2% Oil price differentials to NYMEX
per Bbl (1) ($4.50) - ($5.50) ($4.50) - ($5.50) Gas price
differential to NYMEX per Mcf ($1.50) - ($2.00) ($1.50) - ($2.00)
(1) Does not include the effects of
NGLs.
Commodity Derivative
Contracts
Whiting is 71% hedged for 2018 as a percentage of March 2018
production.
The following summarizes Whiting’s crude oil hedges as of April
24, 2018:
Weighted Average
As a Percentage of Derivative
Hedge Contracted Crude NYMEX Price March
2018 Instrument Period (Bbls per Month)
(per Bbl) Oil Production Three-way
collars (1)
2018 Sub-Floor/Floor/Ceiling Q2
1,450,000 $37.07 - $47.07 - $57.30 55.8% Q3 1,450,000 $37.07 -
$47.07 - $57.30 55.8% Q4 1,450,000 $37.07 - $47.07 - $57.30 55.8%
Swaps 2018 Fixed Price Q2 400,000
$61.74 15.4% Q3 400,000 $61.74 15.4% Q4 400,000 $61.74 15.4%
Collars 2019 Floor/Ceiling Q1 400,000 $50.00 -
$68.44 15.4% Q2 400,000 $50.00 - $68.44 15.4%
(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,
2018 2017 Selected operating
statistics: Production Oil, MBbl 7,740 7,297 NGLs, MBbl
1,816 1,619 Natural gas, MMcf 11,273 9,872 Oil equivalents, MBOE
(1) 11,435 10,562
Average prices Oil per Bbl (excludes
hedging) $ 58.61 $ 43.92 NGLs per Bbl $ 23.57 $ 17.69 Natural gas
per Mcf $ 1.65 $ 2.25
Per BOE data Sales price (including
hedging) $ 42.87 $ 35.29 Lease operating $ 8.10 $ 8.56 Production
taxes $ 3.31 $ 3.03 Depreciation, depletion and amortization $
16.43 $ 22.76 General and administrative $ 2.75 $ 2.90
Selected
financial data:
(In thousands, except per share
data)
Total operating revenues $ 515,083 $ 371,317 Total operating
expenses $ 416,892 $ 448,823 Total other expense, net $ (83,179 ) $
(48,941 ) Net income (loss) attributable to common shareholders $
15,012 $ (86,957 ) Income (loss) per common share, basic (2)
$ 0.17 $ (0.96 ) Income (loss) per common share, diluted (2) $
0.16
$ (0.96 ) Weighted average shares outstanding, basic (2)
90,892
90,652 Weighted average shares outstanding, diluted (2)
91,310
90,652 Net cash provided by operating activities $ 232,867 $
80,070 Net cash provided by (used in) investing activities $
(177,447 ) $ 243,140 Net cash used in financing activities $
(904,284 ) $ (380,006 )
(1)
First quarter 2017 includes 8,220 BOE/d from properties that
have since been divested.
(2)
All share and per share amounts have been retroactively adjusted
for the 2017 period to reflect the Company’s one-for-four reverse
stock split in November 2017.
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, 2018
to be filed with the Securities and Exchange Commission.
WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS (unaudited) (in thousands)
March 31, December
31, 2018 2017 ASSETS Current assets: Cash
and cash equivalents $ 30,515 $ 879,379 Accounts receivable trade,
net 270,304 284,214 Prepaid expenses and other 27,710
26,035 Total current assets 328,529
1,189,628 Property and equipment: Oil and gas
properties, successful efforts method 11,473,492 11,293,650 Other
property and equipment 134,790 134,524
Total property and equipment 11,608,282 11,428,174 Less accumulated
depreciation, depletion and amortization (4,429,947 )
(4,244,735 ) Total property and equipment, net 7,178,335
7,183,439 Other long-term assets 25,844
29,967
TOTAL ASSETS $ 7,532,708
$ 8,403,034
LIABILITIES AND EQUITY Current
liabilities: Current portion of long-term debt $ - $ 958,713
Accounts payable trade 86,222 32,761 Revenues and royalties payable
161,704 171,028 Accrued capital expenditures 76,456 69,744 Accrued
interest 38,595 40,971 Accrued liabilities and other 76,033 118,815
Taxes payable 29,954 28,771 Derivative liabilities 99,020
132,525 Total current liabilities 567,984
1,553,328 Long-term debt 2,861,428 2,764,716 Asset retirement
obligations 131,678 129,206 Other long-term liabilities
36,005 36,642 Total liabilities
3,597,095 4,483,892 Commitments and
contingencies Equity: Common stock, $0.001 par value, 225,000,000
shares authorized; 92,326,188 issued and 90,927,193 outstanding as
of March 31, 2018 and 92,094,837 issued and 90,698,889 outstanding
as of December 31, 2017 92 92 Additional paid-in capital 6,406,949
6,405,490 Accumulated deficit (2,471,428 ) (2,486,440
) Total equity 3,935,613 3,919,142
TOTAL LIABILITIES AND EQUITY $ 7,532,708 $ 8,403,034
WHITING PETROLEUM CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in
thousands, except per share data)
Three Months Ended March 31, 2018
2017 OPERATING REVENUES Oil, NGL and
natural gas sales $ 515,083 $ 371,317
OPERATING
EXPENSES Lease operating expenses 92,572 90,393 Production
taxes 37,838 32,056 Depreciation, depletion and amortization
187,919 240,407 Exploration and impairment 14,747 20,841 General
and administrative 31,480 30,617 Derivative loss, net 52,664 36,577
Loss on sale of properties 2,576 1,274 Amortization of deferred
gain on sale (2,904 ) (3,342 ) Total operating
expenses 416,892 448,823
INCOME (LOSS) FROM OPERATIONS 98,191 (77,506 )
OTHER INCOME (EXPENSE) Interest expense (52,899 ) (48,011 )
Loss on extinguishment of debt (31,160 ) (1,540 ) Interest income
and other 880 610 Total other expense
(83,179 ) (48,941 )
INCOME (LOSS) BEFORE
INCOME TAXES 15,012 (126,447 )
INCOME TAX BENEFIT
Current - (1,890 ) Deferred - (37,586 ) Total
income tax expense (benefit) - (39,476 )
NET INCOME (LOSS) 15,012 (86,971 ) Net loss
attributable to noncontrolling interests - 14
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS $ 15,012 $ (86,957 )
INCOME
(LOSS) PER COMMON SHARE (1) Basic $ 0.17 $ (0.96
) Diluted $ 0.16 $ (0.96 )
WEIGHTED AVERAGE SHARES
OUTSTANDING (1) Basic 90,892 90,652
Diluted 91,310 90,652
(1)
All share and per share amounts have been retroactively
adjusted for the 2017 period to reflect the Company’s one-for-four
reverse stock split in November 2017.
WHITING PETROLEUM
CORPORATION Reconciliation of Net Income (Loss) Attributable
to Common Shareholders to Adjusted Net Income (Loss)
Attributable to Common Shareholders (in thousands, except
per share data) Three
Months Ended March 31, 2018
2017 Net income (loss) attributable to common shareholders $
15,012 $ (86,957 ) Adjustments: Amortization of deferred gain on
sale (2,904 ) (3,342 ) Loss on sale of properties 2,576 1,274
Impairment expense 10,050 14,703 Loss on extinguishment of debt
31,160 1,540 Total measure of derivative loss reported under U.S.
GAAP 52,664 36,577 Total net cash settlements received (paid) on
commodity derivatives during the period (24,837 ) 1,470 Tax impact
of adjustments above - (19,478 ) Adjusted net
income (loss) attributable to common shareholders (1) $ 83,721
$ (54,213 ) Adjusted net income (loss) attributable
to common shareholders per share, basic (2) $ 0.92 $ (0.60 )
Adjusted net income (loss) attributable to common shareholders per
share, diluted (2) $ 0.92 $ (0.60 )
(1)
Adjusted Net Income (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 Income (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 Income (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.
(2)
All per share amounts have been retroactively adjusted for the 2017
period to reflect the Company’s one-for-four reverse stock split in
November 2017.
WHITING PETROLEUM CORPORATION
Reconciliation of Net Cash Provided by Operating Activities to
Discretionary Cash Flow (in thousands)
Three Months Ended March
31, 2018 2017 Net cash provided by operating
activities $ 232,867 $ 80,070 Operating cash outflow for settlement
of commodity derivative contract 61,036 - Exploration 4,697 6,138
Changes in working capital (8,131 ) 96,381
Discretionary cash flow (1) $ 290,469 $ 182,589
(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 Tuesday, May 1,
2018 at 11:00 a.m. ET (10:00 a.m. CT, 9:00 a.m. MT) to discuss
Whiting’s first quarter 2018 financial and operating results.
Participants are encouraged to pre-register for the conference call
by clicking on the following link: http://dpregister.com/10118769.
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 Tuesday, May 1, 2018 and continuing through
Tuesday, May 8, 2018. 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 10118769. 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, including the potential disposition of our Redtail
Field assets; 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, 2017. 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/20180430006236/en/
Whiting Petroleum CorporationEric K. Hagen,
303-837-1661Vice President, Investor
RelationsEric.Hagen@whiting.com
Whiting Petroleum (NYSE:WLL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Whiting Petroleum (NYSE:WLL)
Historical Stock Chart
From Apr 2023 to Apr 2024