|
Whiting Petroleum Corporation Announces Second Quarter 2018 Financial and Operating Results DENVER
-
Q2 2018 Average Production of 126,180 BOE/d at High End of Guidance
-
Q2 2018 Net Cash Provided by Operating Activities of $310 Million
Exceeded Capital Expenditures by $107 Million
-
Q2 2018 Diluted Earnings per Share of $0.02 and Adjusted Earnings
per Share of $0.62
-
Lease Operating Expense per BOE below Low End of Guidance
-
Bolt-On Acquisition Adds 55,000 Net Acres and 1,300 BOE/d for $130
Million
Whiting’s (NYSE: WLL) production in the second quarter 2018
totaled 11.5 million barrels of oil equivalent (MMBOE), comprised of 84%
crude oil/natural gas liquids (NGLs). Second quarter 2018 production
averaged 126,180 barrels of oil equivalent per day (BOE/d) and came in
at the high end of guidance. Capital expenditures for the second quarter
2018 were $203 million. Second quarter 2018 net cash provided by
operating activities of $310 million exceeded capital expenditures by
$107 million. Lease operating expense (LOE) of $7.81 per BOE came in
below the low end of guidance which called for $8.20 per BOE at the
midpoint.
During the second quarter 2018, the Company added to its hedges and is
now 72% hedged for 2018 and 23% hedged for the first half of 2019 as a
percentage of June 2018 production as detailed later in the press
release.
Operating and Financial Results
The following table summarizes the operating and financial results for
the second quarter of 2018 and 2017, including non-cash charges recorded
during those periods:
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
Production (MBOE/d) (1)
|
|
|
|
|
|
126.18
|
|
|
|
112.66
|
|
|
Net cash provided by operating activities-MM
|
|
|
|
|
$
|
310.4
|
|
|
$
|
111.0
|
|
|
Discretionary cash flow-MM (2)
|
|
|
|
|
$
|
269.0
|
|
|
$
|
139.3
|
|
|
Realized price ($/BOE)
|
|
|
|
|
$
|
41.20
|
|
|
$
|
30.83
|
|
|
Total operating revenues-MM
|
|
|
|
|
$
|
526.4
|
|
|
$
|
311.5
|
|
|
Net income (loss) attributable to common shareholders-MM (3)
|
|
|
|
|
$
|
2.1
|
|
|
$
|
(66.0
|
)
|
|
Per basic share (4)
|
|
|
|
|
$
|
0.02
|
|
|
$
|
(0.73
|
)
|
|
Per diluted share (4)
|
|
|
|
|
$
|
0.02
|
|
|
$
|
(0.73
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to common shareholders-MM (5)
|
|
|
|
|
$
|
57.3
|
|
|
$
|
(65.3
|
)
|
|
Per basic share (4)
|
|
|
|
|
$
|
0.63
|
|
|
$
|
(0.72
|
)
|
|
Per diluted share (4)
|
|
|
|
|
$
|
0.62
|
|
|
$
|
(0.72
|
)
|
|
(1)
|
|
Second quarter 2017 includes 7,855 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 $50
million of pre-tax, non-cash derivative losses and $16 million of
pre-tax, non-cash derivative gains for the three months ended June
30, 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.
|
|
|
|
|
|
|
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|
The following table summarizes the first six months operating and
financial results for 2018 and 2017, including non-cash charges recorded
during those periods:
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|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
Production (MBOE/d) (1)
|
|
|
|
|
|
126.61
|
|
|
|
115.00
|
|
|
Net cash provided by operating activities-MM
|
|
|
|
|
$
|
543.3
|
|
|
$
|
191.1
|
|
|
Discretionary cash flow-MM (2)
|
|
|
|
|
$
|
559.5
|
|
|
$
|
321.9
|
|
|
Realized price ($/BOE)
|
|
|
|
|
$
|
42.03
|
|
|
$
|
33.10
|
|
|
Total operating revenues-MM
|
|
|
|
|
$
|
1,041.5
|
|
|
$
|
682.8
|
|
|
Net income (loss) attributable to common shareholders-MM (3)
|
|
|
|
|
$
|
17.1
|
|
|
$
|
(152.9
|
)
|
|
Per basic share (4)
|
|
|
|
|
$
|
0.19
|
|
|
$
|
(1.69
|
)
|
|
Per diluted share (4)
|
|
|
|
|
$
|
0.19
|
|
|
$
|
(1.69
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to common shareholders-MM (5)
|
|
|
|
|
$
|
141.0
|
|
|
$
|
(119.5
|
)
|
|
Per basic share (4)
|
|
|
|
|
$
|
1.55
|
|
|
$
|
(1.32
|
)
|
|
Per diluted share (4)
|
|
|
|
|
$
|
1.54
|
|
|
$
|
(1.32
|
)
|
|
(1)
|
|
The six months ended June 30, 2017 includes 8,035 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 $78
million and $22 million of pre-tax, non-cash derivative losses for
the six months ended June 30, 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, Chairman and CEO, commented, “In
the second quarter, Whiting continued its streak of delivering
production results above forecast and generating significant cash flow
above capital expenditures. Since the beginning of the fourth quarter
2017, Whiting has generated a total of $269 million of operating cash
flow above capital expenditures. We are also pleased to announce a
bolt-on acquisition that fits well with our current core acreage
position in the western Williston Basin. We consider this acreage highly
prospective for generation 4.0 completions because it lies geologically
on trend with the prolific Mallow well announced in the first quarter.
This acquisition demonstrates our commitment to the Williston Basin and
builds on our strategy to unlock value in new areas through the
application of an industry leading development process.”
Williston Basin Bolt-On Acquisition Adds 55,000
Net Acres Contiguous to Core Areas
Whiting has completed a $130 million acquisition of Williston Basin
properties contiguous with the East Missouri Breaks and Hidden Bench
areas. The properties encompass 54,833 net acres and have current
production of 1,290 BOE/d and estimated proved reserves of 26 MMBOE.
Operations Update
In the second quarter 2018, total net production for the Company
averaged 126,180 BOE/d. The Bakken/Three Forks plays in the Williston
Basin averaged 103,480 BOE/d. The Redtail Niobrara/Codell plays in the
DJ Basin averaged 22,005 BOE/d. Whiting drilled 33 wells in the
Williston Basin area and no wells in the Redtail area during the
quarter. The Company put 22 wells on production in the Williston Basin
and 16 wells on production at Redtail during the quarter.
North Polar Optimized Completions Enhance Capital Productivity.
During the quarter, the Company completed four noteworthy generation 4.0
north Polar wells in Williams County, North Dakota. The Anna 14-8 /
Nelson 14-8 wells were completed with 6.5 – 7.0 million pounds of
proppant and the latest diversion techniques. Production profiles for
the wells are, on average, stronger than an earlier generation well
completed with 10 million pounds. The generation 4.0 completion approach
enables Whiting to achieve superior results with a 30% smaller
completion, which translates into approximately $400,000 of capex
savings per well. Also, the new completion strategy allows the Company
to better contain the fracture stimulation within the productive zone of
the rock. This results in a lower water cut that is estimated to reduce
LOE by $600,000 over the life of the well.
Second Quarter 2018 Capital Expenditures Summary
During the second quarter 2018, Whiting’s capital expenditures totaled
$203 million. This includes $8 million for non-operated drilling and
completion, $5 million for land and $1 million for facilities.
Other Financial and Operating Results
The following table summarizes the Company’s net production and
commodity price realizations for the quarters ended June 30, 2018 and
2017:
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Change
|
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MMBbl)
|
|
|
|
7.71
|
|
|
|
|
6.91
|
|
|
12
|
%
|
|
NGLs (MMBbl)
|
|
|
|
1.88
|
|
|
|
|
1.65
|
|
|
14
|
%
|
|
Natural gas (Bcf)
|
|
|
|
11.34
|
|
|
|
|
10.17
|
|
|
12
|
%
|
|
Total equivalent (MMBOE) (1)
|
|
|
|
11.48
|
|
|
|
|
10.25
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per Bbl):
|
|
|
|
|
|
|
|
|
|
|
|
|
Price received
|
|
|
$
|
62.61
|
|
|
|
$
|
40.12
|
|
|
56
|
%
|
|
Effect of crude oil hedging (2)
|
|
|
|
(6.92
|
)
|
|
|
|
0.66
|
|
|
|
|
Realized price (3)
|
|
|
$
|
55.69
|
|
|
|
$
|
40.78
|
|
|
37
|
%
|
|
Weighted average NYMEX price (per Bbl) (4)
|
|
|
$
|
67.91
|
|
|
|
$
|
48.32
|
|
|
41
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGLs (per Bbl):
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized price
|
|
|
$
|
15.26
|
|
|
|
$
|
10.41
|
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per Mcf):
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized price
|
|
|
$
|
1.32
|
|
|
|
$
|
1.68
|
|
|
(21
|
%)
|
|
Weighted average NYMEX price (per MMBtu) (4)
|
|
|
$
|
2.77
|
|
|
|
$
|
3.09
|
|
|
(10
|
%)
|
|
(1)
|
|
Second quarter 2017 includes 7,855 BOE/d from properties that have
since been divested.
|
|
(2)
|
|
Whiting paid $53 million and received $5 million in pre-tax cash
settlements on its crude oil hedges during the second 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 $1.10 per Bbl and $2.72 per
Bbl in the second quarter of 2018 and 2017, respectively, due to the
Redtail deficiency payment. The remaining contract ends in April
2020.
|
|
(4)
|
|
Average NYMEX prices weighted for monthly production volumes.
|
|
|
|
|
|
|
|
|
Second Quarter and First Half 2018 Costs and
Margins
A summary of production and cash revenues and cash costs on a per BOE
basis is as follows:
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(per BOE, except production)
|
|
Production (MMBOE)
|
|
|
|
11.48
|
|
|
|
10.25
|
|
|
|
|
22.92
|
|
|
|
20.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price, net of hedging
|
|
|
$
|
41.20
|
|
|
$
|
30.83
|
|
|
|
$
|
42.03
|
|
|
$
|
33.10
|
|
|
Lease operating expense
|
|
|
|
7.81
|
|
|
|
8.41
|
|
|
|
|
7.95
|
|
|
|
8.49
|
|
|
Production tax
|
|
|
|
3.77
|
|
|
|
2.64
|
|
|
|
|
3.54
|
|
|
|
2.84
|
|
|
Cash general & administrative
|
|
|
|
2.62
|
|
|
|
2.45
|
|
|
|
|
2.49
|
|
|
|
2.39
|
|
|
Exploration
|
|
|
|
0.43
|
|
|
|
0.62
|
|
|
|
|
0.42
|
|
|
|
0.60
|
|
|
Cash interest expense
|
|
|
|
3.55
|
|
|
|
3.93
|
|
|
|
|
3.75
|
|
|
|
3.88
|
|
|
Cash income tax benefit
|
|
|
|
-
|
|
|
|
(0.13
|
)
|
|
|
|
-
|
|
|
|
(0.15
|
)
|
|
|
|
|
$
|
23.02
|
|
|
$
|
12.91
|
|
|
|
$
|
23.88
|
|
|
$
|
15.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outlook for Third Quarter and Full-Year 2018
The following table provides guidance for the third quarter and
full-year 2018 based on current forecasts, including Whiting’s full-year
2018 capital budget of $750 million:
|
|
|
|
|
|
Guidance
|
|
|
|
|
|
|
Third Quarter
|
|
|
|
|
Full Year
|
|
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
Production (MMBOE)
|
|
|
|
|
11.7 - 12.2
|
|
|
|
|
47.0 - 47.7
|
|
Lease operating expense per BOE
|
|
|
|
|
$ 7.70 - $ 8.20
|
|
|
|
|
$ 7.70 - $ 8.20
|
|
General and administrative expense per BOE
|
|
|
|
|
$ 2.60 - $ 2.90
|
|
|
|
|
$ 2.60 - $ 2.90
|
|
Interest expense per BOE
|
|
|
|
|
$ 3.80 - $ 4.20
|
|
|
|
|
$ 4.00 - $ 4.40
|
|
Depreciation, depletion and amortization per BOE
|
|
|
|
|
$16.75 - $17.75
|
|
|
|
|
$16.50 - $17.50
|
|
Production taxes (% of sales revenue)
|
|
|
|
|
8.1% - 8.5%
|
|
|
|
|
7.9% - 8.3%
|
|
Oil price differential 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 72% hedged for 2018 as a percentage of June 2018 production.
The following summarizes Whiting’s crude oil hedges as of July 1, 2018:
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
As a Percentage of
|
|
Derivative
|
|
|
Hedge
|
|
|
Contracted Crude
|
|
|
NYMEX Price
|
|
|
June 2018
|
|
Instrument
|
|
|
Period
|
|
|
(Bbls per Month)
|
|
|
(per Bbl)
|
|
|
Oil Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-way collars (1)
|
|
|
2018
|
|
|
|
|
|
Sub-Floor/Floor/Ceiling
|
|
|
|
|
|
|
|
Q3
|
|
|
1,450,000
|
|
|
$37.07 - $47.07 - $57.30
|
|
|
56.6%
|
|
|
|
|
Q4
|
|
|
1,450,000
|
|
|
$37.07 - $47.07 - $57.30
|
|
|
56.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaps
|
|
|
2018
|
|
|
|
|
|
Fixed Price
|
|
|
|
|
|
|
|
Q3
|
|
|
400,000
|
|
|
$61.74
|
|
|
15.6%
|
|
|
|
|
Q4
|
|
|
400,000
|
|
|
$61.74
|
|
|
15.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collars
|
|
|
2019
|
|
|
|
|
|
Floor/Ceiling
|
|
|
|
|
|
|
|
Q1
|
|
|
600,000
|
|
|
$50.00 - $71.80
|
|
|
23.4%
|
|
|
|
|
Q2
|
|
|
600,000
|
|
|
$50.00 - $71.80
|
|
|
23.4%
|
|
(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
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Selected operating statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, MBbl
|
|
|
|
7,711
|
|
|
|
|
6,911
|
|
|
|
|
15,450
|
|
|
|
|
14,209
|
|
|
NGLs, MBbl
|
|
|
|
1,882
|
|
|
|
|
1,647
|
|
|
|
|
3,698
|
|
|
|
|
3,266
|
|
|
Natural gas, MMcf
|
|
|
|
11,337
|
|
|
|
|
10,166
|
|
|
|
|
22,610
|
|
|
|
|
20,039
|
|
|
Oil equivalents, MBOE (1)
|
|
|
|
11,482
|
|
|
|
|
10,252
|
|
|
|
|
22,917
|
|
|
|
|
20,814
|
|
|
Average prices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil per Bbl (excludes hedging)
|
|
|
$
|
62.61
|
|
|
|
$
|
40.12
|
|
|
|
$
|
60.61
|
|
|
|
$
|
42.07
|
|
|
NGLs per Bbl
|
|
|
$
|
15.26
|
|
|
|
$
|
10.41
|
|
|
|
$
|
19.34
|
|
|
|
$
|
14.02
|
|
|
Natural gas per Mcf
|
|
|
$
|
1.32
|
|
|
|
$
|
1.68
|
|
|
|
$
|
1.48
|
|
|
|
$
|
1.96
|
|
|
Per BOE data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales price (including hedging)
|
|
|
$
|
41.20
|
|
|
|
$
|
30.83
|
|
|
|
$
|
42.03
|
|
|
|
$
|
33.10
|
|
|
Lease operating
|
|
|
$
|
7.81
|
|
|
|
$
|
8.41
|
|
|
|
$
|
7.95
|
|
|
|
$
|
8.49
|
|
|
Production taxes
|
|
|
$
|
3.77
|
|
|
|
$
|
2.64
|
|
|
|
$
|
3.54
|
|
|
|
$
|
2.84
|
|
|
Depreciation, depletion and amortization
|
|
|
$
|
17.36
|
|
|
|
$
|
21.46
|
|
|
|
$
|
16.90
|
|
|
|
$
|
22.12
|
|
|
General and administrative
|
|
|
$
|
2.75
|
|
|
|
$
|
3.12
|
|
|
|
$
|
2.75
|
|
|
|
$
|
3.01
|
|
|
Selected financial data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
$
|
526,403
|
|
|
|
$
|
311,515
|
|
|
|
$
|
1,041,486
|
|
|
|
$
|
682,832
|
|
|
Total operating expenses
|
|
|
$
|
476,633
|
|
|
|
$
|
368,229
|
|
|
|
$
|
893,525
|
|
|
|
$
|
817,052
|
|
|
Total other expense, net
|
|
|
$
|
47,650
|
|
|
|
$
|
47,494
|
|
|
|
$
|
130,829
|
|
|
|
$
|
96,435
|
|
|
Net income (loss) attributable to common shareholders
|
|
|
$
|
2,120
|
|
|
|
$
|
(65,981
|
)
|
|
|
$
|
17,132
|
|
|
|
$
|
(152,938
|
)
|
|
Income (loss) per common share, basic (2)
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.73
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
(1.69
|
)
|
|
Income (loss) per common share, diluted (2)
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.73
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
(1.69
|
)
|
|
Weighted average shares outstanding, basic (2)
|
|
|
|
90,940
|
|
|
|
|
90,684
|
|
|
|
|
90,916
|
|
|
|
|
90,668
|
|
|
Weighted average shares outstanding, diluted (2)
|
|
|
|
91,869
|
|
|
|
|
90,684
|
|
|
|
|
91,821
|
|
|
|
|
90,668
|
|
|
Net cash provided by operating activities
|
|
|
$
|
310,413
|
|
|
|
$
|
110,993
|
|
|
|
$
|
543,280
|
|
|
|
$
|
191,063
|
|
|
Net cash provided by (used in) investing activities
|
|
|
$
|
(224,853
|
)
|
|
|
$
|
(204,126
|
)
|
|
|
$
|
(402,300
|
)
|
|
|
$
|
39,014
|
|
|
Net cash provided by (used in) financing activities
|
|
|
$
|
(99,462
|
)
|
|
|
$
|
99,947
|
|
|
|
$
|
(1,003,746
|
)
|
|
|
$
|
(280,059
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected financial data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
Net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
829,983
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(606,503
|
)
|
|
Net cash used in financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(218,039
|
)
|
|
(1)
|
|
The three and six months ended June 30, 2017 include 7,855 BOE/d and
8,035 BOE/d, respectively, from properties that have since been
divested.
|
|
(2)
|
|
All share and per share amounts have been retroactively adjusted for
the 2017 periods 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 June 30, 2018 to be filed with the
Securities and Exchange Commission.
|
WHITING PETROLEUM CORPORATION
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
16,613
|
|
|
|
$
|
879,379
|
|
|
Accounts receivable trade, net
|
|
|
|
|
|
287,494
|
|
|
|
|
284,214
|
|
|
Prepaid expenses and other
|
|
|
|
|
|
38,051
|
|
|
|
|
26,035
|
|
|
Total current assets
|
|
|
|
|
|
342,158
|
|
|
|
|
1,189,628
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas properties, successful efforts method
|
|
|
|
|
|
11,667,902
|
|
|
|
|
11,293,650
|
|
|
Other property and equipment
|
|
|
|
|
|
137,497
|
|
|
|
|
134,524
|
|
|
Total property and equipment
|
|
|
|
|
|
11,805,399
|
|
|
|
|
11,428,174
|
|
|
Less accumulated depreciation, depletion and amortization
|
|
|
|
|
|
(4,620,868
|
)
|
|
|
|
(4,244,735
|
)
|
|
Total property and equipment, net
|
|
|
|
|
|
7,184,531
|
|
|
|
|
7,183,439
|
|
|
Other long-term assets
|
|
|
|
|
|
34,935
|
|
|
|
|
29,967
|
|
|
TOTAL ASSETS
|
|
|
|
|
$
|
7,561,624
|
|
|
|
$
|
8,403,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
$
|
-
|
|
|
|
$
|
958,713
|
|
|
Accounts payable trade
|
|
|
|
|
|
88,233
|
|
|
|
|
32,761
|
|
|
Revenues and royalties payable
|
|
|
|
|
|
180,234
|
|
|
|
|
171,028
|
|
|
Accrued capital expenditures
|
|
|
|
|
|
64,620
|
|
|
|
|
69,744
|
|
|
Accrued interest
|
|
|
|
|
|
59,261
|
|
|
|
|
40,971
|
|
|
Accrued liabilities and other
|
|
|
|
|
|
98,747
|
|
|
|
|
118,815
|
|
|
Taxes payable
|
|
|
|
|
|
33,208
|
|
|
|
|
28,771
|
|
|
Derivative liabilities
|
|
|
|
|
|
149,420
|
|
|
|
|
132,525
|
|
|
Total current liabilities
|
|
|
|
|
|
673,723
|
|
|
|
|
1,553,328
|
|
|
Long-term debt
|
|
|
|
|
|
2,778,232
|
|
|
|
|
2,764,716
|
|
|
Asset retirement obligations
|
|
|
|
|
|
135,514
|
|
|
|
|
129,206
|
|
|
Other long-term liabilities
|
|
|
|
|
|
34,889
|
|
|
|
|
36,642
|
|
|
Total liabilities
|
|
|
|
|
|
3,622,358
|
|
|
|
|
4,483,892
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 225,000,000 shares authorized;
92,185,043 issued and 90,967,365 outstanding as of June 30, 2018 and
92,094,837 issued and 90,698,889 outstanding as of December 31, 2017
|
|
|
|
|
|
92
|
|
|
|
|
92
|
|
|
Additional paid-in capital
|
|
|
|
|
|
6,408,482
|
|
|
|
|
6,405,490
|
|
|
Accumulated deficit
|
|
|
|
|
|
(2,469,308
|
)
|
|
|
|
(2,486,440
|
)
|
|
Total equity
|
|
|
|
|
|
3,939,266
|
|
|
|
|
3,919,142
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
|
|
|
$
|
7,561,624
|
|
|
|
$
|
8,403,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WHITING PETROLEUM CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
|
|
(in thousands, except per share data)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
OPERATING REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, NGL and natural gas sales
|
|
|
$
|
526,403
|
|
|
|
$
|
311,515
|
|
|
|
$
|
1,041,486
|
|
|
|
$
|
682,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses
|
|
|
|
89,730
|
|
|
|
|
86,269
|
|
|
|
|
182,302
|
|
|
|
|
176,662
|
|
|
Production taxes
|
|
|
|
43,306
|
|
|
|
|
27,066
|
|
|
|
|
81,144
|
|
|
|
|
59,122
|
|
|
Depreciation, depletion and amortization
|
|
|
|
199,294
|
|
|
|
|
220,035
|
|
|
|
|
387,213
|
|
|
|
|
460,442
|
|
|
Exploration and impairment
|
|
|
|
13,234
|
|
|
|
|
25,295
|
|
|
|
|
27,981
|
|
|
|
|
46,136
|
|
|
General and administrative
|
|
|
|
31,601
|
|
|
|
|
31,943
|
|
|
|
|
63,081
|
|
|
|
|
62,560
|
|
|
Derivative (gain) loss, net
|
|
|
|
103,483
|
|
|
|
|
(20,163
|
)
|
|
|
|
156,147
|
|
|
|
|
16,414
|
|
|
(Gain) loss on sale of properties
|
|
|
|
(1,090
|
)
|
|
|
|
1,024
|
|
|
|
|
1,486
|
|
|
|
|
2,298
|
|
|
Amortization of deferred gain on sale
|
|
|
|
(2,925
|
)
|
|
|
|
(3,240
|
)
|
|
|
|
(5,829
|
)
|
|
|
|
(6,582
|
)
|
|
Total operating expenses
|
|
|
|
476,633
|
|
|
|
|
368,229
|
|
|
|
|
893,525
|
|
|
|
|
817,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS
|
|
|
|
49,770
|
|
|
|
|
(56,714
|
)
|
|
|
|
147,961
|
|
|
|
|
(134,220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(48,331
|
)
|
|
|
|
(47,937
|
)
|
|
|
|
(101,230
|
)
|
|
|
|
(95,948
|
)
|
|
Loss on extinguishment of debt
|
|
|
|
(808
|
)
|
|
|
|
-
|
|
|
|
|
(31,968
|
)
|
|
|
|
(1,540
|
)
|
|
Interest income and other
|
|
|
|
1,489
|
|
|
|
|
443
|
|
|
|
|
2,369
|
|
|
|
|
1,053
|
|
|
Total other expense
|
|
|
|
(47,650
|
)
|
|
|
|
(47,494
|
)
|
|
|
|
(130,829
|
)
|
|
|
|
(96,435
|
)
|
|
INCOME (LOSS) BEFORE INCOME TAXES
|
|
|
|
2,120
|
|
|
|
|
(104,208
|
)
|
|
|
|
17,132
|
|
|
|
|
(230,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
-
|
|
|
|
|
(1,316
|
)
|
|
|
|
-
|
|
|
|
|
(3,206
|
)
|
|
Deferred
|
|
|
|
-
|
|
|
|
|
(36,911
|
)
|
|
|
|
-
|
|
|
|
|
(74,497
|
)
|
|
Total income tax benefit
|
|
|
|
-
|
|
|
|
|
(38,227
|
)
|
|
|
|
-
|
|
|
|
|
(77,703
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
|
|
2,120
|
|
|
|
|
(65,981
|
)
|
|
|
|
17,132
|
|
|
|
|
(152,952
|
)
|
|
Net loss attributable to noncontrolling interests
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
|
|
$
|
2,120
|
|
|
|
$
|
(65,981
|
)
|
|
|
$
|
17,132
|
|
|
|
$
|
(152,938
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) PER COMMON SHARE (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.73
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
(1.69
|
)
|
|
Diluted
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.73
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
(1.69
|
)
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
90,940
|
|
|
|
|
90,684
|
|
|
|
|
90,916
|
|
|
|
|
90,668
|
|
|
Diluted
|
|
|
|
91,869
|
|
|
|
|
90,684
|
|
|
|
|
91,821
|
|
|
|
|
90,668
|
|
|
(1)
|
|
All share and per share amounts have been retroactively adjusted for
the 2017 periods 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
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Net income (loss) attributable to common shareholders
|
|
|
$
|
2,120
|
|
|
|
$
|
(65,981
|
)
|
|
|
$
|
17,132
|
|
|
|
$
|
(152,938
|
)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred gain on sale
|
|
|
|
(2,925
|
)
|
|
|
|
(3,240
|
)
|
|
|
|
(5,829
|
)
|
|
|
|
(6,582
|
)
|
|
(Gain) loss on sale of properties
|
|
|
|
(1,090
|
)
|
|
|
|
1,024
|
|
|
|
|
1,486
|
|
|
|
|
2,298
|
|
|
Impairment expense
|
|
|
|
8,260
|
|
|
|
|
18,943
|
|
|
|
|
18,310
|
|
|
|
|
33,646
|
|
|
Loss on extinguishment of debt
|
|
|
|
808
|
|
|
|
|
-
|
|
|
|
|
31,968
|
|
|
|
|
1,540
|
|
|
Total measure of derivative (gain) loss reported under U.S. GAAP
|
|
|
|
103,483
|
|
|
|
|
(20,163
|
)
|
|
|
|
156,147
|
|
|
|
|
16,414
|
|
|
Total net cash settlements received (paid) on commodity derivatives
during the period
|
|
|
|
(53,379
|
)
|
|
|
|
4,588
|
|
|
|
|
(78,216
|
)
|
|
|
|
6,058
|
|
|
Tax impact of adjustments above
|
|
|
|
-
|
|
|
|
|
(429
|
)
|
|
|
|
-
|
|
|
|
|
(19,908
|
)
|
|
Adjusted net income (loss) attributable to common shareholders (1)
|
|
|
$
|
57,277
|
|
|
|
$
|
(65,258
|
)
|
|
|
$
|
140,998
|
|
|
|
$
|
(119,472
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) attributable to common shareholders per
share, basic (2)
|
|
|
$
|
0.63
|
|
|
|
$
|
(0.72
|
)
|
|
|
$
|
1.55
|
|
|
|
$
|
(1.32
|
)
|
|
Adjusted net income (loss) attributable to common shareholders per
share, diluted (2)
|
|
|
$
|
0.62
|
|
|
|
$
|
(0.72
|
)
|
|
|
$
|
1.54
|
|
|
|
$
|
(1.32
|
)
|
|
(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
periods 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 and
|
|
Operating Cash Flow in Excess of Capital Expenditures
|
|
(in thousands)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Net cash provided by operating activities
|
|
|
$
|
310,413
|
|
|
|
$
|
110,993
|
|
|
$
|
543,280
|
|
|
|
$
|
191,063
|
|
Operating cash outflow for settlement of commodity derivative
contract
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
61,036
|
|
|
|
|
-
|
|
Exploration
|
|
|
|
4,974
|
|
|
|
|
6,352
|
|
|
|
9,671
|
|
|
|
|
12,490
|
|
Changes in working capital
|
|
|
|
(46,348
|
)
|
|
|
|
22,003
|
|
|
|
(54,479
|
)
|
|
|
|
118,384
|
|
Discretionary cash flow (1)
|
|
|
$
|
269,039
|
|
|
|
$
|
139,348
|
|
|
$
|
559,508
|
|
|
|
$
|
321,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
|
|
June 30, 2018
|
|
Net cash provided by operating activities
|
|
|
|
|
|
|
|
|
$
|
310,413
|
|
|
|
|
|
$
|
829,983
|
|
|
Capital expenditures
|
|
|
|
|
|
|
|
|
|
(203,250
|
)
|
|
|
|
|
|
(561,151
|
)
|
|
Operating cash flow in excess of capital expenditures (1)
|
|
|
|
|
|
|
|
|
$
|
107,163
|
|
|
|
|
|
$
|
268,832
|
|
|
(1)
|
|
Discretionary cash flow and operating cash flow in excess of capital
expenditures 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
acquisitions, exploration and development. Such measures 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 Wednesday, August 1, 2018 at
11:00 a.m. ET (10:00 a.m. CT, 9:00 a.m. MT) to discuss Whiting’s second
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/10122141.
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 Wednesday, August 1, 2018 and continuing through Wednesday,
August 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 10122141. You may also access a web archive at http://www.whiting.com
beginning one to two hours after the conference call.
About Whiting Petroleum Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an independent
oil and gas company that develops, produces, acquires and explores for
crude oil, natural gas and natural gas liquids primarily in the Rocky
Mountains region of the United States. The Company’s largest projects
are in the Bakken and Three Forks plays in North Dakota and Montana and
the Niobrara play in northeast Colorado. The Company trades publicly
under the symbol WLL on the New York Stock Exchange. For further
information, please visit http://www.whiting.com.
Forward-Looking Statements
This news release contains statements that we believe to be
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements other than historical facts, including, without
limitation, statements regarding our future financial position, business
strategy, projected revenues, earnings, costs, capital expenditures and
debt levels, and plans and objectives of management for future
operations, are forward-looking statements. When used in this news
release, words such as we “expect,” “intend,” “plan,” “estimate,”
“anticipate,” “believe” or “should” or the negative thereof or
variations thereon or similar terminology are generally intended to
identify forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to
differ materially from those expressed in, or implied by, such
statements.
These risks and uncertainties include, but are not limited to: declines
in or extended periods of low oil, NGL or natural gas prices; our level
of success in exploration, development and production activities; risks
related to our level of indebtedness, ability to comply with debt
covenants and periodic redeterminations of the borrowing base under our
credit agreement; impacts to financial statements as a result of
impairment write-downs; our ability to successfully complete asset
dispositions and the risks related thereto; revisions to reserve
estimates as a result of changes in commodity prices, regulation and
other factors; adverse weather conditions that may negatively impact
development or production activities; the timing of our exploration and
development expenditures; inaccuracies of our reserve estimates or our
assumptions underlying them; risks relating to any unforeseen
liabilities of ours; our ability to generate sufficient cash flows from
operations to meet the internally funded portion of our capital
expenditures budget; our ability to obtain external capital to finance
exploration and development operations; federal and state initiatives
relating to the regulation of hydraulic fracturing and air emissions;
unforeseen underperformance of or liabilities associated with acquired
properties; the impacts of hedging on our results of operations; failure
of our properties to yield oil or gas in commercially viable quantities;
availability of, and risks associated with, transport of oil and gas;
our ability to drill producing wells on undeveloped acreage prior to its
lease expiration; shortages of or delays in obtaining qualified
personnel or equipment, including drilling rigs and completion services;
uninsured or underinsured losses resulting from our oil and gas
operations; our inability to access oil and gas markets due to market
conditions or operational impediments; the impact and costs of
compliance with laws and regulations governing our oil and gas
operations; the potential impact of changes in laws, including tax
reform, that could have a negative effect on the oil and gas industry;
our ability to replace our oil and natural gas reserves; any loss of our
senior management or technical personnel; competition in the oil and gas
industry; cyber security attacks or failures of our telecommunication
systems; and other risks described under the caption “Risk Factors” in
our Annual Report on Form 10-K for the period ended December 31, 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/20180731005873/en/ Copyright Business Wire 2018
Source: Business Wire
(July 31, 2018 - 4:01 PM EDT)
News by QuoteMedia
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