Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the
“Company”) today announced first quarter 2021 results.
First Quarter 2021 Highlights
- Revenue was $307 million for the quarter ending March 31,
2021
- Net loss (GAAP) was $0.9 million or $0.02 per diluted
share
- Adjusted net income (non-GAAP) was $108 million or $2.79 per
diluted share
- Adjusted EBITDAX (non-GAAP) was $170 million
- March 31, 2021 net debt of $220 million
- $750 million borrowing base reaffirmed
Lynn A. Peterson, President and CEO commented, "Our team
executed and delivered great results during the first quarter, a
quarter which provided its share of challenges through the
continuing pandemic and the difficult working conditions brought on
by the winter. The Company generated over $100 million in adjusted
free cash flow during the first quarter, after reinvesting about a
third of its EBITDA during the same period. The Company continues
to reduce its debt, which was $170 million as of April 30, 2021. In
the current commodity environment, we expect to pay down the
Company’s debt to zero by year-end 2021, putting the Company in an
excellent financial position.
"With one quarter in the books, looking ahead at the full year
while using a $55 WTI oil price, we expect to generate
approximately $550 million in EBITDA and approximately $300 million
of adjusted free cash flow, both after estimated hedge losses of
$130 million.”
First Quarter 2021
Results
Revenue for the first quarter of 2021 increased $95 million to
$307 million when compared to the fourth quarter of 2020, primarily
due to increased commodity prices between periods.
Net loss for the first quarter of 2021 was $0.9 million, or
$0.02 per share, as compared to a net loss of $1.2 million, or
$0.03 per share, for the fourth quarter of 2020. Adjusted net
income (non-GAAP) for the first quarter of 2021 was $108 million,
or $2.79 per share as compared to $55.5 million, or $1.46 per
share, for the fourth quarter of 2020. The primary difference
between net loss and adjusted net income for both periods is
non-cash expense related to the change in value of the Company’s
hedging portfolio.
The Company’s adjusted EBITDAX for the first quarter of 2021 was
$170 million compared to $120 million for the fourth quarter of
2020. This resulted in net cash provided by operating activities of
$153 million and adjusted free cash flow (non-GAAP) of $108
million.
Adjusted net income, adjusted net income per share, adjusted
EBITDAX and adjusted free cash flow are non-GAAP financial
measures. Please refer to the end of this release for disclosures
and reconciliations regarding these measures.
Production averaged 89.9 thousand barrels of oil equivalent per
day (MBOE/d) and oil production averaged 53.5 thousand barrels of
oil per day (MBO/d). As expected, the Company’s production held
consistent with levels at year-end 2020 despite winter conditions
during the first quarter of 2021.
Capital expenditures in the first quarter of 2021 increased to
$56 million compared to the fourth quarter 2020 spend of $21
million, as the Company resumed operations following an improvement
in commodity prices in late 2020. During the quarter, the Company
drilled 6 gross/4.5 net operated wells, completed 15 gross/10.6 net
operated wells and turned in line 14 gross/9.8 net operated wells.
The Company currently has one drilling rig and one completion crew
operating in its Sanish Field in North Dakota.
Lease operating expense (LOE) for the first quarter 2021
increased by $4 million to $59 million when comparing to the fourth
quarter 2020. The increase in LOE was driven by increased
maintenance with additional workover rigs running due to expected
winter conditions. General and administrative expenses of $10
million continued to reflect the effect of previous cost saving
measures.
Selected operating statistics are presented in the following
tables:
Selected Operating and Financial
Statistics
Successor
Three Months Ended
March 31, 2021
December 31, 2020
Selected operating statistics:
Production
Oil (MBbl)
4,822
5,110
NGLs (MBbl)
1,559
1,546
Natural gas (MMcf)
10,249
10,709
Total production (MBOE)
8,090
8,441
Average prices
Oil (per Bbl):
Price received
$
53.24
$
37.89
Effect of crude oil hedging (1)
(8.16
)
(0.55
)
Realized price
$
45.08
$
37.34
Weighted average NYMEX price (per Bbl)
(2)
$
57.83
$
42.59
NGLs (per Bbl):
Realized price
$
17.28
$
6.88
Natural gas (per Mcf):
Price received
$
2.05
$
0.75
Effect of natural gas hedging (3)
0.01
(0.20
)
Realized price
$
2.06
$
0.55
Weighted average NYMEX price (per MMBtu)
(2)
$
2.56
$
2.51
Selected operating metrics
Sales price, net of hedging ($ per
BOE)
$
32.80
$
24.56
Lease operating ($ per BOE)
7.34
6.57
Transportation, gathering, compression and
other ($ per BOE)
0.87
0.72
Depreciation, depletion and amortization
($ per BOE)
6.64
6.80
General and administrative ($ per BOE)
1.27
1.35
Production and ad valorem taxes (% of
sales revenue)
8
%
9
%
____________________________
(1)
Whiting paid $39 million and $3 million in
pre-tax cash settlements on crude oil hedges during the three
months ended March 31, 2021 and December 31, 2020, respectively. A
summary of Whiting’s outstanding hedges is included in “Commodity
Price Hedging” later in this release.
(2)
Average NYMEX prices weighted for monthly
production volumes.
(3)
Whiting paid $2 million in pre-tax cash
settlements on natural gas hedges during the three months ended
December 31, 2020. A summary of Whiting’s outstanding hedges is
included in “Commodity Price Hedging” later in this release.
Borrowing Base Reaffirmation and
Liquidity
On April 7, 2021, the Company’s borrowing base and aggregate
commitments under its revolving credit facility were reaffirmed at
$750 million. As of March 31, 2021, the Company had borrowings of
$245 million and unrestricted cash of $25 million, resulting in
total liquidity of $528 million, net of outstanding letters of
credit. Whiting expects to continue to fund its operations fully
within operating cash flow and to have no outstanding balance on
its credit facility by the end of the year.
Commodity Price Hedging
Whiting currently has approximately 71% of its forecasted crude
oil production and 75% of its forecasted natural gas production
hedged for 2021. The Company uses commodity hedges in order to
reduce the effects of commodity price volatility and to satisfy the
requirements of its credit facility. The following table summarizes
Whiting’s hedging positions as of April 30, 2021:
Weighted Average
Prices
Settlement Period
Index
Derivative Instrument
Total Volumes
Units
Swap Price
Floor
Ceiling
Crude Oil
2021(1)
NYMEX WTI
Fixed Price Swaps
4,723,500
Bbl
$44.44
-
-
2021(1)
NYMEX WTI
Two-way Collars
4,796,000
Bbl
-
$38.95
$47.05
2022
NYMEX WTI
Fixed Price Swaps
630,000
Bbl
$54.30
-
-
2022
NYMEX WTI
Two-way Collars
9,197,000
Bbl
-
$42.61
$52.87
2023(2)
NYMEX WTI
Two-way Collars
2,706,000
Bbl
-
$46.82
$57.75
Total
22,052,500
Crude Oil Differential
2021(1)
UHC Clearbrook to NYMEX
Fixed Price Swaps
107,000
Bbl
-$1.95
-
-
Total
107,000
Natural Gas
2021(1)
NYMEX Henry Hub
Fixed Price Swaps
14,430,000
MMBtu
$2.81
-
-
2021(1)
NYMEX Henry Hub
Two-way Collars
8,250,000
MMBtu
-
$2.60
$2.79
2022
NYMEX Henry Hub
Fixed Price Swaps
4,895,000
MMBtu
$2.67
-
-
2022
NYMEX Henry Hub
Two-way Collars
10,720,000
MMBtu
-
$2.35
$2.85
2023(2)
NYMEX Henry Hub
Two-way Collars
4,065,000
MMBtu
-
$2.42
$2.79
Total
42,360,000
Natural Gas Basis
2021(1)
NNG Ventura to NYMEX
Fixed Price Swaps
5,500,000
MMBtu
-$0.18
-
-
2022
NNG Ventura to NYMEX
Fixed Price Swaps
3,530,000
MMBtu
$0.14
-
-
2023(2)
NNG Ventura to NYMEX
Fixed Price Swaps
4,740,000
MMBtu
$0.07
-
-
Total
13,770,000
NGL - Propane
2021(1)
Mont Belvieu
Fixed Price Swaps
17,325,000
Gallons
$0.76
-
-
Total
17,325,000
_________________________
(1)
Includes settlement periods of April
through December 2021.
(2)
Includes settlement periods of January
through June 2023.
Conference Call
Whiting will host a conference call on Thursday, May 6, 2021 at
11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss these
results. The call will be conducted by President and Chief
Executive Officer Lynn A. Peterson, Executive Vice President
Finance and Chief Financial Officer James Henderson, Executive Vice
President Operations and Chief Operating Officer Charles J. Rimer
and Investor Relations Manager Brandon Day. A question and answer
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/10155734/e7c049863c
Replay Information:
Conference ID #: 10155734 Replay Dial-In (Toll Free U.S. &
Canada): (877) 344-7529 (U.S.), (855) 669-9658 (Canada) Replay
Dial-In (International): (412) 317-0088 Expiration Date: May 13,
2021
Virtual Conference
Participation
Whiting will be hosting virtual 1x1 sessions with investors at
the Wells Fargo Energy Conference on Thursday, June 3, 2021 and the
RBC Capital Markets Energy, Power and Infrastructure Conference on
Wednesday, June 9, 2021.
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, 2021
filed with the Securities and Exchange Commission.
Successor
Three Months Ended
March 31, 2021
December 31, 2020
Selected financial data:
(In thousands, except per share data)
Total operating revenues
$
307,391
$
212,274
Total operating expenses
305,754
207,502
Total other expense, net
2,583
5,822
Net loss
(946
)
(1,197
)
Per basic share
(0.02
)
(0.03
)
Per diluted share
(0.02
)
(0.03
)
Adjusted net income (1)
107,894
55,543
Per basic share
2.79
1.46
Per diluted share
2.79
1.46
Adjusted EBITDAX (1)
170,216
119,825
________________________
(1)
Reconciliations of net loss to adjusted
net income and adjusted EBITDAX are included later in this news
release.
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands, except share
and per share data)
Successor
March 31,
December 31,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
24,704
$
25,607
Restricted cash
2,400
2,760
Accounts receivable trade, net
203,058
142,830
Prepaid expenses and other
15,318
19,224
Total current assets
245,480
190,421
Property and equipment:
Oil and gas properties, successful efforts
method
1,872,469
1,812,601
Other property and equipment
66,613
74,064
Total property and equipment
1,939,082
1,886,665
Less accumulated depreciation, depletion
and amortization
(126,072
)
(73,869
)
Total property and equipment, net
1,813,010
1,812,796
Other long-term assets
38,458
40,723
TOTAL ASSETS
$
2,096,948
$
2,043,940
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable trade
$
53,642
$
23,697
Revenues and royalties payable
171,895
151,196
Accrued capital expenditures
28,832
20,155
Accrued liabilities and other
36,074
42,007
Accrued lease operating expenses
20,594
23,457
Taxes payable
16,201
11,997
Derivative liabilities
134,422
49,485
Total current liabilities
461,660
321,994
Long-term debt
245,000
360,000
Asset retirement obligations
99,271
91,864
Operating lease obligations
16,907
17,415
Other long-term liabilities
45,300
23,863
Total liabilities
868,138
815,136
Commitments and contingencies
Equity:
Successor common stock, $0.001 par value,
500,000,000 shares authorized; 39,054,196 issued and outstanding as
of March 31, 2021 and 38,051,125 issued and outstanding as of
December 31, 2020
39
38
Additional paid-in capital
1,190,644
1,189,693
Accumulated earnings
38,127
39,073
Total equity
1,228,810
1,228,804
TOTAL LIABILITIES AND EQUITY
$
2,096,948
$
2,043,940
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per
share data)
Successor
Three Months Ended
March 31, 2021
December 31, 2020
OPERATING REVENUES
Oil, NGL and natural gas sales
$
304,679
$
212,274
Purchased gas sales
2,712
-
Total operating revenues
307,391
212,274
OPERATING EXPENSES
Lease operating expenses
59,339
55,455
Transportation, gathering, compression and
other
7,028
6,058
Purchased gas expense
1,902
-
Production and ad valorem taxes
24,150
18,242
Depreciation, depletion and
amortization
53,729
57,392
Exploration and impairment
2,622
3,658
General and administrative
10,291
11,389
Derivative loss, net
146,693
55,308
Total operating expenses
305,754
207,502
INCOME FROM OPERATIONS
1,637
4,772
OTHER INCOME (EXPENSE)
Interest expense
(5,103
)
(5,952
)
Other income
2,520
130
Total other expense
(2,583
)
(5,822
)
LOSS BEFORE INCOME TAXES
(946
)
(1,050
)
INCOME TAX EXPENSE
Current
-
147
Total income tax expense
-
147
NET LOSS
$
(946
)
$
(1,197
)
LOSS PER COMMON SHARE
Basic
$
(0.02
)
$
(0.03
)
Diluted
$
(0.02
)
$
(0.03
)
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
38,698
38,090
Diluted
38,698
38,090
About Non-GAAP Financial
Measures
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Loss to
Adjusted Net Income
(in thousands, except per
share data)
Successor
Three Months Ended
March 31, 2021
December 31, 2020
Net loss
$
(946
)
$
(1,197
)
Adjustments:
Impairment expense
1,441
3,233
Total measure of derivative loss reported
under U.S. GAAP
146,693
55,308
Total net cash settlements paid on
commodity derivatives during the period
(39,294
)
(4,973
)
Restructuring and other one-time costs
(1)
-
3,025
Tax impact of basis difference for Whiting
Canadian Holding Company ULC
-
147
Adjusted net income (2)
$
107,894
$
55,543
Adjusted net income per share, basic
$
2.79
$
1.46
Adjusted net income per share, diluted
$
2.79
$
1.46
_________________________
(1)
Includes charges related to a legal
settlement as well as third-party advisory and legal fees incurred
after emerging from chapter 11 bankruptcy.
(2)
Adjusted net income and adjusted net
income per share are non-GAAP measures. Management believes they
provide useful information to investors for analysis of Whiting’s
fundamental business on a recurring basis. In addition, management
believes that adjusted net income 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 and adjusted net income
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.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Loss to
Adjusted EBITDA and Adjusted EBITDAX
(in thousands)
Successor
Three Months Ended
March 31, 2021
December 31, 2020
Net loss
$
(946
)
$
(1,197
)
Interest expense
5,103
5,952
Interest income
-
(2
)
Income tax expense
-
147
Depreciation, depletion and
amortization
53,729
57,392
Total measure of derivative loss reported
under U.S. GAAP
146,693
55,308
Total cash settlements paid on commodity
derivatives during the period
(39,294
)
(4,973
)
Non-cash stock-based compensation
2,309
515
Impairment expense
1,441
3,233
Restructuring and other one-time costs
(1)
-
3,025
Adjusted EBITDA (2)
169,035
119,400
Exploration expense
1,181
425
Adjusted EBITDAX (2)
$
170,216
$
119,825
_________________________
(1)
Includes charges related to a legal
settlement as well as third-party advisory and legal fees incurred
after emerging from chapter 11 bankruptcy.
(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 Cash
Provided by Operating Activities to Adjusted Free Cash Flow
(in thousands)
Successor
Three Months Ended
March 31, 2021
December 31, 2020
Net cash provided by operating
activities
$
153,193
$
70,528
Changes in working capital
10,653
39,314
Capital expenditures
(55,602)
(20,504)
Adjusted free cash flow (1)
$
108,244
$
89,338
_________________________
(1)
Adjusted free cash flow is a non-GAAP
measure. Such measure is presented because management believes it
provides useful information to investors for analysis of the
Company’s ability to internally fund acquisitions and development
activity and reduce its borrowings outstanding under its revolving
credit facility. Such measure 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. The Company is
unable to present a reconciliation of forward-looking adjusted free
cash flow because components of the calculation, including
fluctuations in working capital accounts, are inherently
unpredictable. Moreover, estimating the most directly comparable
GAAP measure with the required precision necessary to provide a
meaningful reconciliation is extremely difficult and could not be
accomplished without unreasonable effort. The Company believes that
forward-looking estimates of adjusted free cash flow are important
to investors because they assist in the analysis of its ability to
generate cash from our operations.
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 production, cash flows, revenues, 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 “guidance,” or 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
coronavirus pandemic; actions of the Organization of Petroleum
Exporting Countries 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 Annual Report on Form 10‑K for the
period ended December 31, 2020. 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/20210505006060/en/
Company Contact: Brandon Day Title: Investor Relations Manager
Phone: 303-837-1661 Email: Brandond@whiting.com
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