DENVER--(BUSINESS WIRE)--Nov 5, 2019--

Whiting Petroleum Corporation (NYSE: WLL) today announced its financial and operating results for the third quarter of 2019.

In the third quarter, Whiting delivered oil production of 80,880 barrels per day, despite adverse weather conditions and ongoing gas and natural gas liquid (NGL) infrastructure and processing constraints. The Company maintained strong capital spending discipline, with capital expenditures in the third quarter below the Company’s previously announced guidance range.

Bradley J. Holly, Whiting’s Chairman, President and CEO commented, “Today, Whiting is more energized than ever as we continue our hard work to position the Company for near- and long-term success. As part of our value-based strategy – and following significant organizational changes – we are a more focused company committed to operational efficiency and disciplined capital allocation to improve returns for investors.”

Holly added, “In the third quarter, we took decisive steps to streamline operations, improve cash flow and strengthen our financial position. From an operations standpoint, we have increased communication and efficiency throughout the organization, which contributed to solid production results despite challenging operating conditions. Improved planning processes and enhanced technology enabled us to deliver on our commitments while controlling capital spending. We remain on track to achieve our full-year 2019 production targets while reducing lease operating expenses over the coming quarters and intend to build on our results to drive further performance improvement and generate free cash flow. In addition, we are tightening the range for our full-year capital expenditure guidance to recognize the benefits of more efficient execution of our capital plan. This reflects enhanced drilling and completion efficiency in the field driven by new technologies and design optimization.”

Operations Update

During the third quarter, heavy rain and flooding across Whiting’s properties resulted in road closures and restricted activity. Whiting’s field operations took preemptive steps to prepare well sites, allowing for uninterrupted operations at some locations and expedited recovery at others, which resulted in the Company achieving its quarterly production goal. Consistent with its plan, Whiting put on production 39 wells during the third quarter and remains on track to put on production 31 wells in the fourth quarter.

Whiting continued to deliver strong incremental project results during the quarter that set the stage for multi-year drilling programs with attractive and stable returns.

  • Sanish Field: Whiting re-entered the Sanish field in 2017 based on extensive technical evaluation that indicated the potential for higher levels of resource recovery. Its initial project, the McNamara infill pilot validated this analysis. Results confirmed that with the application of new technology, it was possible to double the recovery of oil in place. Subsequent to the McNamara project, which is located in southeastern Sanish, Whiting delivered successful infill tests at its Sprague project in southwestern Sanish and Pod 8 infill pilots in northern Sanish. Results have been consistently strong, characterized by a significant increase in oil recovery, positive parent to child well interactions and attractive project level returns.
    • During the third quarter, Whiting brought on the Pod 9 infill pilot located in the northwest portion of the field. At Pod 9, Whiting drilled nine Bakken wells in an area that had eleven parent Bakken wells. Results have been strong with the average well producing 760 barrels of oil equivalent per day (BOE/d) over the first 90 days and continuing to produce with little to no decline. The new wells are producing above the parent wells, and the parent wells are producing above their prior trend due to positive stimulation from child wells. With Pod 9, Whiting has completed four successful infill pilots that span the field and demonstrate the potential for a full-scale redevelopment program.
  • Foreman Butte: Whiting acquired the Forman Butte property in 2018. The Company has completed its delineation program and established production from its first 17 wells in the field. These wells have produced at an average per well rate of 695 BOE/d over the first 70 days, 2.5x above the early generation wells drilled in the area. Whiting is currently working with third-parties to install gathering infrastructure in preparation for full field development.

In the third quarter, Whiting introduced multiple cost-saving initiatives focused on lease operating expense (LOE) reduction. Among the most impactful are cost optimization of chemical and freshwater programs, renegotiation of saltwater disposal contracts and an enhanced focus on cost effective utilization of rental equipment. Whiting intends to fully realize the savings from these programs throughout 2020 and estimates it could reduce absolute LOE by 10% to 15% compared to 2019 levels.

Financial Update

During the third quarter, Whiting executed on multiple initiatives to enhance its financial flexibility. The Company successfully completed a cash tender offer for $300 million of its 2020 convertible notes using proceeds from its credit facility. It also recently repurchased $100 million of debt in the open market at an average discount of 4.7%. In addition, Whiting maintained $1.75 billion of commitments under its credit facility following redetermination by the lenders of a $2.05 billion borrowing base.

Capital Expenditure Summary and Outlook for Full-Year 2019

During the third quarter, Whiting’s capital expenditures totaled $225 million. This includes $22.6 million for non-operated drilling and completions. Looking to the fourth quarter, Whiting forecasts a decline in capital spending to $134 - $154 million as a significant portion of the capital for wells being put on production during the fourth quarter was incurred in the third quarter and as activity declines seasonally. The Company also forecasts a reduction in LOE per barrel of oil (BOE) as it continues to realize the benefits of its reorganization and ongoing field initiatives. The Company expects to generate free cash flow at current strip commodity prices in the fourth quarter of 2019.

The following table provides guidance for the full-year 2019 based on current forecasts, including Whiting’s revised full-year capital budget of $810 to $830 million.

 

 

 

 

 

 

 

 

Full-Year Guidance 2019

Production (MMBOE) (1)

 

45.0 - 46.5

Capital Expenditures (MM)

 

$ 810 - $ 830

Lease operating expense per BOE

 

$ 7.15 - $ 7.55

Transportation, gathering, compression and other per BOE

 

$ 0.80 - $ 1.05

General and administrative expense per BOE (2)

 

$ 2.55 - $ 2.85

Interest expense per BOE

 

$ 4.00 - $ 4.40

Depreciation, depletion and amortization per BOE

 

$17.50 - $18.50

Production and ad valorem taxes (% of sales revenue)

 

8.5% - 9.0%

Oil price differential to NYMEX per Bbl (3)

 

($7.00) - ($7.75)

Gas price differential to NYMEX per Mcf

 

($1.75) - ($2.25)

——————————————————————

(1)

 

Adjusted for announced asset sales of 703 BOE/d.

(2)

 

Includes a one-time reorganization charge of approximately $8 million, which the Company realized in the third quarter of 2019.

(3)

 

Does not include the effects of NGLs.

Selected Operating and Financial Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Selected operating statistics:

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

 

 

 

 

 

Oil (MBbl)

 

 

7,441

 

 

 

7,911

 

 

 

22,435

 

 

 

23,362

 

NGLs (MBbl)

 

 

1,830

 

 

 

1,912

 

 

 

5,709

 

 

 

5,610

 

Natural gas (MMcf)

 

 

12,536

 

 

 

12,093

 

 

 

38,167

 

 

 

34,703

 

Total production (MBOE)

 

 

11,361

 

 

 

11,839

 

 

 

34,506

 

 

 

34,756

 

Average prices

 

 

 

 

 

 

 

 

 

 

 

 

Oil (per Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

49.71

 

 

$

64.70

 

 

$

50.51

 

 

$

61.99

 

Effect of crude oil hedging (1)

 

 

1.41

 

 

 

(7.88

)

 

 

0.66

 

 

 

(6.01

)

Realized price (2)

 

$

51.12

 

 

$

56.82

 

 

$

51.17

 

 

$

55.98

 

Weighted average NYMEX price (per Bbl) (3)

 

$

56.43

 

 

$

69.52

 

 

$

56.99

 

 

$

66.80

 

NGLs (per Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

Realized price

 

$

3.07

 

 

$

22.22

 

 

$

6.09

 

 

$

20.32

 

Natural gas (per Mcf):

 

 

 

 

 

 

 

 

 

 

 

 

Realized price

 

$

0.03

 

 

$

1.02

 

 

$

0.62

 

 

$

1.32

 

Weighted average NYMEX price (per MMBtu) (3)

 

$

2.29

 

 

$

2.88

 

 

$

2.62

 

 

$

2.93

 

Selected operating metrics

 

 

 

 

 

 

 

 

 

 

 

 

Sales price, net of hedging ($ per BOE)

 

$

34.01

 

 

$

42.60

 

 

$

34.96

 

 

$

42.22

 

Lease operating ($ per BOE)

 

 

7.51

 

 

 

6.31

 

 

 

7.43

 

 

 

6.63

 

Transportation, gathering, compression and other ($ per BOE)

 

 

0.98

 

 

 

1.08

 

 

 

0.93

 

 

 

1.02

 

Depreciation, depletion and amortization ($ per BOE)

 

 

18.58

 

 

 

16.64

 

 

 

17.74

 

 

 

16.81

 

General and administrative ($ per BOE)

 

 

2.63

 

 

 

2.69

 

 

 

2.82

 

 

 

2.73

 

Production and ad valorem taxes (% of sales revenue)

 

 

9

%

 

 

9

%

 

 

9

%

 

 

8

%

—————————————————————

(1)

 

Whiting received $10 million and paid $62 million in pre-tax cash settlements on crude oil hedges during the three months ended September 30, 2019 and 2018, respectively, and received $15 million and paid $141 million in pre-tax cash settlements on crude oil hedges during the nine months ended September 30, 2019 and 2018, respectively. A summary of Whiting’s outstanding hedges is included later in this news release.

(2)

 

Whiting’s realized prices were reduced by $2.38 and $1.30 per Bbl during the three months ended September 30, 2019 and 2018, respectively, and $2.05 and $1.17 per Bbl during the nine months ended September 30, 2019 and 2018, respectively, due to the Redtail deficiency payments. This contract ends in April 2020.

(3)

 

Average NYMEX prices weighted for monthly production volumes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Selected financial data:

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues

 

$

375,891

 

 

$

566,695

 

 

$

1,191,644

 

 

$

1,608,181

 

Total operating expenses

 

 

351,253

 

 

 

397,330

 

 

 

1,147,122

 

 

 

1,290,855

 

Total other expense, net

 

 

43,705

 

 

 

47,965

 

 

 

139,574

 

 

 

178,794

 

Net income (loss)

 

 

(19,067

)

 

 

121,400

 

 

 

(93,679

)

 

 

138,532

 

Per basic share

 

 

(0.21

)

 

 

1.33

 

 

 

(1.03

)

 

 

1.52

 

Per diluted share

 

 

(0.21

)

 

 

1.32

 

 

 

(1.03

)

 

 

1.51

 

Adjusted net income (loss) (1)

 

 

(35,148

)

 

 

84,716

 

 

 

(57,821

)

 

 

225,714

 

Per basic share

 

 

(0.38

)

 

 

0.93

 

 

 

(0.63

)

 

 

2.48

 

Per diluted share

 

 

(0.38

)

 

 

0.92

 

 

 

(0.63

)

 

 

2.46

 

Net cash provided by operating activities

 

 

138,992

 

 

 

263,756

 

 

 

520,925

 

 

 

807,036

 

Net cash used in investing activities

 

 

(148,804

)

 

 

(315,132

)

 

 

(571,449

)

 

 

(717,432

)

Net cash provided by (used in) financing activities

 

 

3,132

 

 

 

48,950

 

 

 

36,917

 

 

 

(954,796

)

Discretionary cash flow (2)

 

 

178,527

 

 

 

298,390

 

 

 

603,441

 

 

 

858,990

 

Adjusted EBITDAX (1)

 

 

229,133

 

 

 

337,919

 

 

 

731,646

 

 

 

982,397

 

————————————————————

(1)

 

Reconciliations of net income (loss) to adjusted net income (loss) and adjusted EBITDAX are included later in this news release.

(2)

 

A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.

Third Quarter and First Nine Months 2019 Costs and Margins

A summary of cash revenues and cash costs on a per BOE basis is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Sales price, net of hedging

 

$

34.01

 

$

42.60

 

$

34.96

 

$

42.22

Lease operating expense

 

 

7.51

 

 

6.31

 

 

7.43

 

 

6.63

Transportation, gathering, compression and other

 

 

0.98

 

 

1.08

 

 

0.93

 

 

1.02

Production and ad valorem tax

 

 

3.10

 

 

4.22

 

 

2.98

 

 

3.86

Cash general & administrative

 

 

2.94

 

 

2.34

 

 

2.68

 

 

2.44

Exploration

 

 

0.73

 

 

0.44

 

 

0.82

 

 

0.46

Cash interest expense

 

 

3.56

 

 

3.44

 

 

3.52

 

 

3.64

 

 

$

15.19

 

$

24.77

 

$

16.60

 

$

24.17

Commodity Derivative Contracts

Whiting is 67% hedged for the remainder of 2019 and 59% hedged for the first half of 2020 as a percentage of September 2019 production.

The following summarizes Whiting’s crude oil hedges as of September 30, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracted Crude

 

Weighted Average

 

As a Percentage of

Derivative

 

Hedge

 

(Average Bbls

 

NYMEX Price

 

September 2019

Instrument

 

Period

 

per Month)

 

(Per Bbl)

 

Oil Production

Swaps

 

 

 

 

 

Fixed Price

 

 

 

 

Oct - Dec 2019

 

737,000

 

$61.02

 

30.3%

 

 

Jan - Mar 2020

 

469,667

 

$58.27

 

19.3%

 

 

Apr - Jun 2020

 

424,667

 

$58.37

 

17.5%

 

 

Jul - Sep 2020

 

61,333

 

$55.33

 

2.5%

 

 

Oct - Dec 2020

 

61,333

 

$55.33

 

2.5%

 

 

 

 

 

 

 

 

 

Collars

 

 

 

 

 

Floor/Ceiling

 

 

 

 

Oct - Dec 2019

 

900,000

 

$52.56 - $75.17

 

37.0%

 

 

Jan - Mar 2020

 

121,333

 

$55.00 - $67.33

 

5.0%

 

 

Apr - Jun 2020

 

121,333

 

$55.00 - $67.33

 

5.0%

 

 

 

 

 

 

 

 

 

Three-way collars(1)

 

 

 

 

 

Sub-Floor/Floor/Ceiling

 

 

 

 

Jan - Mar 2020

 

151,667

 

$45.00 - $55.00 - $65.00

 

6.2%

 

 

Apr - Jun 2020

 

151,667

 

$45.00 - $55.00 - $65.00

 

6.2%

 

 

Jul - Sep 2020

 

153,333

 

$45.00 - $55.00 - $65.00

 

6.3%

 

 

Oct - Dec 2020

 

153,333

 

$45.00 - $55.00 - $65.00

 

6.3%

 

 

 

 

 

 

 

 

 

Call option (2)

 

 

 

 

 

Strike Price

 

 

 

 

Jan - Mar 2021

 

30,000

 

$65.00

 

1.2%

 

 

Apr - Jun 2021

 

30,333

 

$65.00

 

1.2%

 

 

Jul - Sep 2021

 

30,667

 

$65.00

 

1.3%

 

 

Oct - Dec 2021

 

30,667

 

$65.00

 

1.3%

——————————————————

(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. Whiting is contracted to pay deferred premiums related to certain three-way collars at each settlement date. The weighted average premium for all three-way collars was $1.84 per Bbl as of September 30, 2019.

(2)

 

This derivative instrument is a sold call option.

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Quarterly Report on Form 10‑Q for the quarter ended September 30, 2019 to be filed with the Securities and Exchange Commission.

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2019

 

2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

-

 

 

$

13,607

 

Accounts receivable trade, net

 

 

294,422

 

 

 

294,468

 

Derivative assets

 

 

45,038

 

 

 

68,342

 

Prepaid expenses and other

 

 

15,854

 

 

 

22,009

 

Total current assets

 

 

355,314

 

 

 

398,426

 

Property and equipment:

 

 

 

 

 

 

Oil and gas properties, successful efforts method

 

 

12,717,762

 

 

 

12,195,659

 

Other property and equipment

 

 

176,705

 

 

 

134,212

 

Total property and equipment

 

 

12,894,467

 

 

 

12,329,871

 

Less accumulated depreciation, depletion and amortization

 

 

(5,528,511

)

 

 

(5,003,509

)

Total property and equipment, net

 

 

7,365,956

 

 

 

7,326,362

 

Other long-term assets

 

 

53,611

 

 

 

34,785

 

TOTAL ASSETS

 

$

7,774,881

 

 

$

7,759,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Continued)

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2019

 

2018

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

256,018

 

 

$

-

 

Accounts payable trade

 

 

52,054

 

 

 

42,520

 

Revenues and royalties payable

 

 

200,174

 

 

 

228,284

 

Accrued capital expenditures

 

 

130,017

 

 

 

73,178

 

Accrued liabilities and other

 

 

65,048

 

 

 

69,013

 

Accrued interest

 

 

33,383

 

 

 

55,080

 

Accrued lease operating expenses

 

 

47,077

 

 

 

37,499

 

Taxes payable

 

 

22,742

 

 

 

31,357

 

Total current liabilities

 

 

806,513

 

 

 

536,931

 

Long-term debt

 

 

2,605,023

 

 

 

2,792,321

 

Asset retirement obligations

 

 

132,381

 

 

 

131,544

 

Operating lease obligations

 

 

33,596

 

 

 

-

 

Deferred income taxes

 

 

-

 

 

 

1,373

 

Other long-term liabilities

 

 

27,411

 

 

 

27,088

 

Total liabilities

 

 

3,604,924

 

 

 

3,489,257

 

Commitments and contingencies

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock, $0.001 par value, 225,000,000 shares authorized; 91,761,220 issued and 91,299,706 outstanding as of September 30, 2019 and 92,067,216 issued and 91,018,692 outstanding as of December 31, 2018

 

 

92

 

 

 

92

 

Additional paid-in capital

 

 

6,407,490

 

 

 

6,414,170

 

Accumulated deficit

 

 

(2,237,625

)

 

 

(2,143,946

)

Total equity

 

 

4,169,957

 

 

 

4,270,316

 

TOTAL LIABILITIES AND EQUITY

 

$

7,774,881

 

 

$

7,759,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Concluded)

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Oil, NGL and natural gas sales

 

$

375,891

 

 

$

566,695

 

 

$

1,191,644

 

 

$

1,608,181

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

85,320

 

 

 

74,690

 

 

 

256,384

 

 

 

230,434

 

Transportation, gathering, compression and other

 

 

11,176

 

 

 

12,842

 

 

 

32,145

 

 

 

35,450

 

Production and ad valorem taxes

 

 

35,220

 

 

 

49,989

 

 

 

102,796

 

 

 

133,991

 

Depreciation, depletion and amortization

 

 

211,025

 

 

 

197,006

 

 

 

612,166

 

 

 

584,219

 

Exploration and impairment

 

 

10,890

 

 

 

12,479

 

 

 

44,045

 

 

 

41,552

 

General and administrative

 

 

29,890

 

 

 

31,901

 

 

 

97,437

 

 

 

94,982

 

Derivative (gain) loss, net

 

 

(30,597

)

 

 

21,063

 

 

 

7,431

 

 

 

177,210

 

Loss on sale of properties

 

 

595

 

 

 

230

 

 

 

1,681

 

 

 

1,716

 

Amortization of deferred gain on sale

 

 

(2,266

)

 

 

(2,870

)

 

 

(6,963

)

 

 

(8,699

)

Total operating expenses

 

 

351,253

 

 

 

397,330

 

 

 

1,147,122

 

 

 

1,290,855

 

 

INCOME FROM OPERATIONS

 

 

24,638

 

 

 

169,365

 

 

 

44,522

 

 

 

317,326

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(48,447

)

 

 

(48,328

)

 

 

(145,274

)

 

 

(149,558

)

Gain (loss) on extinguishment of debt

 

 

4,598

 

 

 

-

 

 

 

4,598

 

 

 

(31,968

)

Interest income and other

 

 

144

 

 

 

363

 

 

 

1,102

 

 

 

2,732

 

Total other expense

 

 

(43,705

)

 

 

(47,965

)

 

 

(139,574

)

 

 

(178,794

)

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

(19,067

)

 

 

121,400

 

 

 

(95,052

)

 

 

138,532

 

 

INCOME TAX BENEFIT

 

 

 

 

 

 

 

 

 

 

 

 

Total income tax benefit

 

 

-

 

 

 

-

 

 

 

(1,373

)

 

 

-

 

NET INCOME (LOSS)

 

$

(19,067

)

 

$

121,400

 

 

$

(93,679

)

 

$

138,532

 

 

INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.21

)

 

$

1.33

 

 

$

(1.03

)

 

$

1.52

 

Diluted

 

$

(0.21

)

 

$

1.32

 

 

$

(1.03

)

 

$

1.51

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

91,299

 

 

 

90,967

 

 

 

91,274

 

 

 

90,934

 

Diluted

 

 

91,299

 

 

 

91,823

 

 

 

91,274

 

 

 

91,862

 

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income (loss)

 

$

(19,067

)

 

$

121,400

 

 

$

(93,679

)

 

$

138,532

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred gain on sale

 

 

(2,266

)

 

 

(2,870

)

 

 

(6,963

)

 

 

(8,699

)

Loss on sale of properties

 

 

595

 

 

 

230

 

 

 

1,681

 

 

 

1,716

 

Impairment expense

 

 

2,550

 

 

 

7,302

 

 

 

15,729

 

 

 

25,612

 

(Gain) loss on extinguishment of debt

 

 

(4,598

)

 

 

-

 

 

 

(4,598

)

 

 

31,968

 

Total measure of derivative (gain) loss reported under U.S. GAAP

 

 

(30,597

)

 

 

21,063

 

 

 

7,431

 

 

 

177,210

 

Total net cash settlements received (paid) on commodity derivatives during the period

 

 

10,454

 

 

 

(62,409

)

 

 

14,797

 

 

 

(140,625

)

Restructuring charges

 

 

7,781

 

 

 

-

 

 

 

7,781

 

 

 

-

 

Tax impact of adjustments above

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted net income (loss) (1)

 

$

(35,148

)

 

$

84,716

 

 

$

(57,821

)

 

$

225,714

 

 

Adjusted net income (loss) per share, basic

 

$

(0.38

)

 

$

0.93

 

 

$

(0.63

)

 

$

2.48

 

Adjusted net income (loss) per share, diluted

 

$

(0.38

)

 

$

0.92

 

 

$

(0.63

)

 

$

2.46

 

————————————————————

(1)

 

Adjusted Net Income (Loss) 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) 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) 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 Discretionary Cash Flow

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net cash provided by operating activities

 

$

138,992

 

$

263,756

 

$

520,925

 

$

807,036

 

Operating cash outflow for settlement of commodity derivative contract

 

 

-

 

 

-

 

 

-

 

 

61,036

 

Exploration

 

 

8,340

 

 

5,177

 

 

28,316

 

 

15,940

 

Changes in working capital

 

 

31,195

 

 

29,457

 

 

54,200

 

 

(25,022

)

Discretionary cash flow (1)

 

$

178,527

 

$

298,390

 

$

603,441

 

$

858,990

 

——————————————————————

(1)

 

Discretionary 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, 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.

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDAX

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net income (loss)

 

$

(19,067

)

 

$

121,400

 

 

$

(93,679

)

 

$

138,532

 

Interest expense

 

 

48,447

 

 

 

48,328

 

 

 

145,274

 

 

 

149,558

 

Interest income

 

 

-

 

 

 

(6

)

 

 

(2

)

 

 

(737

)

Income tax benefit

 

 

-

 

 

 

-

 

 

 

(1,373

)

 

 

-

 

Depreciation, depletion and amortization

 

 

211,025

 

 

 

197,006

 

 

 

612,166

 

 

 

584,219

 

Amortization of deferred gain on sale

 

 

(2,266

)

 

 

(2,870

)

 

 

(6,963

)

 

 

(8,699

)

Total measure of derivative (gain) loss reported under U.S. GAAP

 

 

(30,597

)

 

 

21,063

 

 

 

7,431

 

 

 

177,210

 

Total cash settlements received (paid) on commodity derivatives during the period, net of premiums/costs

 

 

10,454

 

 

 

(62,409

)

 

 

14,797

 

 

 

(140,625

)

Non-cash stock-based compensation

 

 

(3,531

)

 

 

4,147

 

 

 

5,086

 

 

 

10,243

 

(Gain) loss on extinguishment of debt

 

 

(4,598

)

 

 

-

 

 

 

(4,598

)

 

 

31,968

 

Loss on sale of properties

 

 

595

 

 

 

230

 

 

 

1,681

 

 

 

1,716

 

Restructuring charges (1)

 

 

14,311

 

 

 

-

 

 

 

14,311

 

 

 

-

 

Adjusted EBITDA (2)

 

 

224,773

 

 

 

326,889

 

 

 

694,131

 

 

 

943,385

 

Exploration and impairment expense

 

 

10,890

 

 

 

11,030

 

 

 

44,045

 

 

 

39,012

 

Adjusted EBITDAX (2)

 

$

235,663

 

 

$

337,919

 

 

$

738,176

 

 

$

982,397

 

—————————————————————————

(1)  

 

The restructuring charges for the three and nine months ended September 30, 2019 exclude forfeitures of $7 million related to non-cash stock-based compensation which are reflected in “non-cash stock-based compensation.”

(2)

 

Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures.  Such measures are presented because management believes they provide useful information to investors for analysis of the Company’s ability to internally fund debt service, working capital requirements, acquisitions and exploration and development.  Adjusted EBITDA and Adjusted EBITDAX should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

Conference Call

The Company’s management will host a conference call with investors, analysts and other interested parties on Wednesday, November 6, 2019 at 11:00 a.m. ET (10:00 a.m. CT, 9:00 a.m. MT) to discuss Whiting’s third quarter 2019 financial and operating results. Participants are encouraged to pre-register for the conference call by clicking on the following link: http://dpregister.com/10136088. 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, November 6, 2019 and continuing through Wednesday, November 13, 2019. You may access this replay at (877) 344-7529 (U.S.), (855) 669-9658 (Canada) or (412) 317-0088 (International) and enter the replay access code 10136088. 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; the geographic concentration of our operations; the ability to achieve the benefits of our organizational redesign and cost reduction strategy; impacts to financial statements as a result of impairment write-downs; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors; 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; our ability to successfully complete asset dispositions and the risks related thereto; 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 that could have a negative effect on the oil and gas industry; our ability to replace our oil and natural gas reserves; negative impacts from litigation and legal proceedings; 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 Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2018. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.

Readers are cautioned that initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels. In particular, production from horizontal drilling in shale oil and natural gas resource plays and tight natural gas plays that are stimulated with extensive pressure fracturing are typically characterized by significant early declines in production rates.

CONTACT: Eric K. Hagen

Vice President, Corporate Affairs

303‑837‑1661

KEYWORD: COLORADO UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: OIL/GAS ENERGY

SOURCE: Whiting Petroleum Corporation

Copyright Business Wire 2019.

PUB: 11/05/2019 04:01 PM/DISC: 11/05/2019 04:01 PM

Copyright Business Wire 2019.