Whiting Petroleum Corporation Announces Third Quarter 2018 Financial and Operating Results
October 30, 2018
-
Q3 2018 Net Cash Provided by Operating Activities of $264 Million
Exceeded Capital Expenditures by $56 Million; Q3 2018 Discretionary
Cash Flow Exceeded Capital Expenditures by $90 Million -
Q3 2018 Diluted Earnings per Share of $1.32 and Adjusted Earnings
per Share of $0.92 -
Q3 2018 Production Averaged 128,680 BOE/d, a 13% Increase
Year-over-Year and a 2% Increase over Second Quarter 2018 -
DD&A per BOE below Low End of Guidance, G&A Expense per BOE and LOE
per BOE at Low End of Guidance -
Company Added Crude Oil Hedges and Fixed Differential Crude Oil
Marketing Contracts
DENVER–(BUSINESS WIRE)–Whiting’s (NYSE: WLL) production in the third quarter 2018
totaled 11.8 million barrels of oil equivalent (MMBOE), comprised of 83%
crude oil/natural gas liquids (NGLs). Third quarter 2018 production
averaged 128,680 barrels of oil equivalent per day (BOE/d). Capital
expenditures for the third quarter 2018 totaled $207 million. Third
quarter 2018 net cash provided by operating activities of $264 million
exceeded capital expenditures by $56 million, and third quarter 2018
discretionary cash flow of $297 million exceeded capital expenditures by
$90 million. Depreciation, depletion and amortization (DD&A) of $16.64
per BOE came in below the low end of guidance which called for $17.25
per BOE at the midpoint. General and administrative (G&A) expense of
$2.69 per BOE came in at the low end of guidance which called for $2.75
per BOE at the midpoint. Lease operating expense (LOE) of $7.81 per BOE
came in at the low end of guidance which called for $7.95 per BOE at the
midpoint.
As detailed later in the press release, Whiting entered into crude oil
hedges for 2019 that cover 9.9 million barrels of oil (MMBbl) with
costless collars that have an average weighted NYMEX floor price of
$51.21 per barrel and an average weighted NYMEX ceiling price of $77.14
per barrel. Also, to reduce basis differential risk the Company has
entered into crude oil marketing contracts that cover 10 thousand
barrels per day (MBbl/d) through year-end 2018 at an average price of
NYMEX less $1.75 and 10 MBbl/d through August 2019 at an average price
of NYMEX less $2.00.
Operating and Financial Results
The following table summarizes the operating and financial results for
the third quarter of 2018 and 2017, including non-cash charges recorded
during those periods:
| Three Months Ended | |||||||||||
| September 30, | |||||||||||
| 2018 | 2017 | ||||||||||
| Production (MBOE/d) (1) | 128.68 | 114.35 | |||||||||
| Net cash provided by operating activities-MM | $ | 263.8 | $ | 99.3 | |||||||
| Discretionary cash flow-MM (2) | $ | 296.9 | $ | 147.9 | |||||||
| Realized price ($/BOE) | $ | 42.60 | $ | 31.25 | |||||||
| Total operating revenues-MM | $ | 566.7 | $ | 324.2 | |||||||
| Net income (loss) attributable to common shareholders-MM (3) | $ | 121.4 | $ | (286.4 | ) | ||||||
| Per basic share (4) | $ | 1.33 | $ | (3.16 | ) | ||||||
| Per diluted share (4) | $ | 1.32 | $ | (3.16 | ) | ||||||
|
Adjusted net income (loss) attributable to common shareholders-MM (5) |
$ | 84.7 | $ | (50.1 | ) | ||||||
| Per basic share (4) | $ | 0.93 | $ | (0.55 | ) | ||||||
| Per diluted share (4) | $ | 0.92 | $ | (0.55 | ) | ||||||
|
________________ |
||
|
(1) |
Third quarter 2017 includes 5,915 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 $41 million of pre-tax, non-cash derivative gains and $35 million of pre-tax, non-cash derivative losses for the three months ended September 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. |
|
The following table summarizes the first nine months operating and
financial results for 2018 and 2017, including non-cash charges recorded
during those periods:
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2018 | 2017 | ||||||||||
| Production (MBOE/d) (1) | 127.31 | 114.78 | |||||||||
| Net cash provided by operating activities-MM | $ | 807.0 | $ | 290.4 | |||||||
| Discretionary cash flow-MM (2) | $ | 856.4 | $ | 469.8 | |||||||
| Realized price ($/BOE) | $ | 42.22 | $ | 32.48 | |||||||
| Total operating revenues-MM | $ | 1,608.2 | $ | 1,007.0 | |||||||
|
Net income (loss) attributable to common shareholders-MM (3) |
$ | 138.5 | $ | (439.4 | ) | ||||||
| Per basic share (4) | $ | 1.52 | $ | (4.85 | ) | ||||||
| Per diluted share (4) | $ | 1.51 | $ | (4.85 | ) | ||||||
|
Adjusted net income (loss) attributable to common shareholders-MM (5) |
$ | 225.7 | $ | (169.6 | ) | ||||||
| Per basic share (4) | $ | 2.48 | $ | (1.87 | ) | ||||||
| Per diluted share (4) | $ | 2.46 | $ | (1.87 | ) | ||||||
|
________________ |
||
| (1) |
The nine months ended September 30, 2017 includes 7,320 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 $37 million and $58 million of pre-tax, non-cash derivative losses for the nine months ended September 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, “The
Whiting team generated strong third quarter discretionary cash flow by
maintaining a focus on cost control. LOE and G&A per BOE came in at the
low end of guidance and capital expenditures were in line with
expectations. This resulted in another quarter where operating cash flow
significantly exceeded capex. Over the previous four quarters, operating
cash flows of $1,094 million exceeded capital expenditures by $325
million. Heading into the current quarter, we anticipate strong value
creation as our production is forecast to increase approximately 5%
sequentially and capital expenditures are projected to decrease
significantly from third quarter levels. Also, as detailed in the
operating highlights below, Whiting’s teams continue to lead the
industry in the application of optimized completions. Their efforts have
been a key factor in our ability to expand top-tier results outside the
established core of the Bakken.”
Operations Update
In the third quarter 2018, total net production for the Company averaged
128,680 BOE/d. The Bakken/Three Forks plays in the Williston Basin
averaged 106,835 BOE/d. The Redtail Niobrara/Codell plays in the DJ
Basin averaged 21,240 BOE/d. Whiting drilled 34 wells in the Williston
Basin area and no wells in the Redtail area during the quarter. The
Company put 45 wells on production in the Williston Basin and no wells
on production at Redtail during the quarter.
In the Sanish area, the Bartelson drilling spacing unit (DSU) further
confirms the high productivity achieved by newer generation completions.
Three new Bartelson Bakken wells were completed with Whiting’s latest
generation (Generation 4.0) optimized completion approach and have
produced an average of 51 MBOE per well over the first 45 days. This
represents an 83% increase compared to the legacy Bakken well in the
DSU. Also in the Sanish area, the previously announced six-well McNamara
DSU infill project has reached payout in only 16 months and is projected
to deliver a 108% rate of return at a $65 NYMEX oil price.
In the north Hidden Bench Tarpon area, the 14-well pinwheel pad
demonstrates Whiting’s ability to conduct large scale, Generation 4.0
completions in an area with geographical and regulatory constraints. By
utilizing innovative wellbore planning and extended reach laterals,
reserves of oil and gas are now being produced that would have been
inaccessible with conventional Bakken spacing. The pad was completed
between July and September of 2018 and the average well tested at a
24-hour rate of 2,614 BOE/d.
In the Foreman Butte area, permitting is moving forward on the Company’s
recently acquired acreage. The first wells are scheduled to spud in
early 2019. This acreage has the potential to add over 100 additional
high-productivity wells to Whiting’s development inventory. In July
2018, Whiting completed the Loken wells located in southern Hidden
Bench, which is adjacent to the Foreman Butte area. The wells were
completed in the Middle Bakken formation and have produced an average of
100 MBOE per well over the first 90 days. In September 2018, a
third-party operator tested a well on the eastern boundary of Whiting’s
acreage at a 24-hour oil rate of 2,724 barrels of oil per day. Whiting
holds a 46% working interest in the well. These strong results further
validate the potential for advanced completion approaches to deliver
top-tier results in the Foreman Butte area.
Whiting plans to test Generation 4.0 completions in its Wildrose and
Cassandra areas, located primarily in Williams County, in late 2018.
Both areas are unique ‘halo’ plays that lie outside the established core
and require optimized completion approaches to unlock their potential to
deliver superior results. Through a combination of fracture model
simulation and findings from recent tracer studies, Whiting has gained
insights into the most efficient completion approach for each area. The
tests position Whiting for development in these areas, which represent
over 230 net future drilling locations.
Third Quarter 2018 Capital Expenditures Summary
During the third quarter 2018, Whiting’s capital expenditures totaled
$207 million. This includes $5 million for non-operated drilling and
completion, $2 million for land and $3 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 September 30, 2018
and 2017:
| Three Months Ended | |||||||||||||
| September 30, | |||||||||||||
| 2018 | 2017 | Change | |||||||||||
|
Production |
|||||||||||||
| Oil (MMBbl) | 7.91 | 7.05 | 12 | % | |||||||||
| NGLs (MMBbl) | 1.91 | 1.77 | 8 | % | |||||||||
| Natural gas (Bcf) | 12.09 | 10.21 | 18 | % | |||||||||
| Total equivalent (MMBOE) (1) | 11.84 | 10.52 | 13 | % | |||||||||
|
Average sales price |
|||||||||||||
| Oil (per Bbl): | |||||||||||||
| Price received | $ | 64.70 | $ | 41.03 | 58 | % | |||||||
| Effect of crude oil hedging (2) | (7.88 | ) | 0.66 | ||||||||||
| Realized price (3) | $ | 56.82 | $ | 41.69 | 36 | % | |||||||
| Weighted average NYMEX price (per Bbl) (4) | $ | 69.52 | $ | 48.24 | 44 | % | |||||||
|
NGLs (per Bbl): |
|||||||||||||
| Realized price | $ | 22.22 | $ | 12.06 | 84 | % | |||||||
|
Natural gas (per Mcf): |
|||||||||||||
| Realized price | $ | 1.02 | $ | 1.32 | (23 | %) | |||||||
| Weighted average NYMEX price (per MMBtu) (4) | $ | 2.88 | $ | 2.89 | (0.3 | %) | |||||||
|
________________ |
||
| (1) |
Third quarter 2017 includes 5,915 BOE/d from properties that have since been divested. |
|
| (2) |
Whiting paid $62 million and received $5 million in pre-tax cash settlements on its crude oil hedges during the third 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 $1.30 per Bbl and $2.46 per Bbl in the third 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. | |
Third Quarter and First Nine Months 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 | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| (per BOE, except production) | ||||||||||||||||||
| Production (MMBOE) | 11.84 | 10.52 | 34.76 | 31.33 | ||||||||||||||
| Sales price, net of hedging | $ | 42.60 | $ | 31.25 | $ | 42.22 | $ | 32.48 | ||||||||||
| Lease operating expense | 7.81 | 8.61 | 7.91 | 8.53 | ||||||||||||||
| Production tax | 3.93 | 2.61 | 3.67 | 2.76 | ||||||||||||||
| Cash general & administrative | 2.34 | 2.26 | 2.44 | 2.35 | ||||||||||||||
| Exploration | 0.31 | 0.67 | 0.39 | 0.62 | ||||||||||||||
| Cash interest expense | 3.44 | 3.80 | 3.64 | 3.85 | ||||||||||||||
| Cash income tax benefit | – | (0.30 | ) | – | (0.20 | ) | ||||||||||||
| $ | 24.77 | $ | 13.60 | $ | 24.17 | $ | 14.57 | |||||||||||
Outlook for Fourth Quarter and Full-Year 2018
The following table provides guidance for the fourth quarter and
full-year 2018 based on current forecasts, including Whiting’s full-year
2018 capital budget of $750 million:
| Guidance | ||||||
| Fourth Quarter | Full Year | |||||
| 2018 | 2018 | |||||
| Production (MMBOE) | 12.2 – 12.6 | 47.0 – 47.4 | ||||
| Lease operating expense per BOE | $ 7.60 – $ 8.00 | $ 7.70 – $ 8.00 | ||||
| General and administrative expense per BOE | $ 2.60 – $ 2.90 | $ 2.60 – $ 2.90 | ||||
| Interest expense per BOE | $ 3.70 – $ 4.10 | $ 4.00 – $ 4.40 | ||||
| Depreciation, depletion and amortization per BOE | $16.00 – $17.00 | $16.00 – $17.00 | ||||
| Production taxes (% of sales revenue) | 8.1% – 8.5% | 7.8% – 8.2% | ||||
| Oil price differential to NYMEX per Bbl (1) | ($6.50) – ($7.50) | ($4.75) – ($5.75) | ||||
| Gas price differential to NYMEX per Mcf | ($1.50) – ($2.00) | ($1.50) – ($2.00) | ||||
|
________________ |
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|
(1) Does not include the effects of NGLs. |
||||||
Commodity Derivative Contracts
Whiting is 69% hedged for 2018 as a percentage of September 2018
production.
The following summarizes Whiting’s crude oil hedges as of October 1,
2018:
|
Weighted Average |
As a Percentage of |
|||||||||||
|
Derivative |
Hedge |
Contracted Crude |
||||||||||
| Three-way collars (1) | 2018 | Sub-Floor/Floor/Ceiling | ||||||||||
| Q4 | 1,450,000 | $37.07 – $47.07 – $57.30 | 54.0% | |||||||||
| Swaps | 2018 | Fixed Price | ||||||||||
| Q4 | 400,000 | $61.74 | 14.9% | |||||||||
| Collars | 2019 | Floor/Ceiling | ||||||||||
| Q1 | 1,100,000 | $50.91 – $75.55 | 41.0% | |||||||||
| Q2 | 1,100,000 | $50.91 – $75.55 | 41.0% | |||||||||
| Q3 | 550,000 | $51.82 – $80.33 | 20.5% | |||||||||
| Q4 | 550,000 | $51.82 – $80.33 | 20.5% |
|
________________ |
||
| (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 | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| Selected operating statistics: | ||||||||||||||||||||
| Production | ||||||||||||||||||||
| Oil, MBbl | 7,911 | 7,053 | 23,362 | 21,261 | ||||||||||||||||
| NGLs, MBbl | 1,912 | 1,766 | 5,610 | 5,032 | ||||||||||||||||
| Natural gas, MMcf | 12,093 | 10,211 | 34,703 | 30,249 | ||||||||||||||||
| Oil equivalents, MBOE (1) | 11,839 | 10,520 | 34,756 | 31,335 | ||||||||||||||||
| Average prices | ||||||||||||||||||||
| Oil per Bbl (excludes hedging) | $ | 64.70 | $ | 41.03 | $ | 61.99 | $ | 41.73 | ||||||||||||
| NGLs per Bbl | $ | 22.22 | $ | 12.06 | $ | 20.32 | $ | 13.33 | ||||||||||||
| Natural gas per Mcf | $ | 1.02 | $ | 1.32 | $ | 1.32 | $ | 1.75 | ||||||||||||
| Per BOE data | ||||||||||||||||||||
| Sales price (including hedging) | $ | 42.60 | $ | 31.25 | $ | 42.22 | $ | 32.48 | ||||||||||||
| Lease operating | $ | 7.81 | $ | 8.61 | $ | 7.91 | $ | 8.53 | ||||||||||||
| Production taxes | $ | 3.93 | $ | 2.61 | $ | 3.67 | $ | 2.76 | ||||||||||||
| Depreciation, depletion and amortization | $ | 16.64 | $ | 20.23 | $ | 16.81 | $ | 21.49 | ||||||||||||
| General and administrative | $ | 2.69 | $ | 2.86 | $ | 2.73 | $ | 2.96 | ||||||||||||
| Selected financial data: | ||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| Total operating revenues | $ | 566,695 | $ | 324,191 | $ | 1,608,181 | $ | 1,007,023 | ||||||||||||
| Total operating expenses | $ | 397,330 | $ | 805,145 | $ | 1,290,855 | $ | 1,622,197 | ||||||||||||
| Total other expense, net | $ | 47,965 | $ | 47,776 | $ | 178,794 | $ | 144,211 | ||||||||||||
| Net income (loss) attributable to common shareholders | $ | 121,400 | $ | (286,432 | ) | $ | 138,532 | $ | (439,370 | ) | ||||||||||
| Income (loss) per common share, basic (2) | $ | 1.33 | $ | (3.16 | ) | $ | 1.52 | $ | (4.85 | ) | ||||||||||
| Income (loss) per common share, diluted (2) | $ | 1.32 | $ | (3.16 | ) | $ | 1.51 | $ | (4.85 | ) | ||||||||||
| Weighted average shares outstanding, basic (2) | 90,967 | 90,698 | 90,934 | 90,678 | ||||||||||||||||
| Weighted average shares outstanding, diluted (2) | 91,823 | 90,698 | 91,862 | 90,678 | ||||||||||||||||
| Net cash provided by operating activities | $ | 263,756 | $ | 99,343 | $ | 807,036 | $ | 290,406 | ||||||||||||
| Net cash provided by (used in) investing activities | $ | (315,132 | ) | $ | 238,586 | $ | (717,432 | ) | $ | 277,600 | ||||||||||
| Net cash provided by (used in) financing activities | $ | 48,950 | $ | (350,000 | ) | $ | (954,796 | ) | $ | (630,059 | ) | |||||||||
|
________________ |
||
| (1) |
The three and nine months ended September 30, 2017 include 5,915 BOE/d and 7,320 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: | Twelve Months Ended | ||||||||||
| (In thousands) | September 30, 2018 | ||||||||||
| Net cash provided by operating activities | $ | 1,093,739 | |||||||||
| Net cash used in investing activities | $ | (921,635 | ) | ||||||||
| Net cash used in financing activities | $ | (169,089 | ) | ||||||||
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, 2018 to be filed with
the Securities and Exchange Commission.
| WHITING PETROLEUM CORPORATION | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||||||
| (in thousands) | ||||||||||||
| September 30, | December 31, | |||||||||||
| 2018 | 2017 | |||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 14,187 | $ | 879,379 | ||||||||
| Accounts receivable trade, net | 315,929 | 284,214 | ||||||||||
| Prepaid expenses and other | 22,617 | 26,035 | ||||||||||
| Total current assets | 352,733 | 1,189,628 | ||||||||||
| Property and equipment: | ||||||||||||
| Oil and gas properties, successful efforts method | 11,994,921 | 11,293,650 | ||||||||||
| Other property and equipment | 134,663 | 134,524 | ||||||||||
| Total property and equipment | 12,129,584 | 11,428,174 | ||||||||||
| Less accumulated depreciation, depletion and amortization | (4,809,558 | ) | (4,244,735 | ) | ||||||||
| Total property and equipment, net | 7,320,026 | 7,183,439 | ||||||||||
| Other long-term assets | 36,580 | 29,967 | ||||||||||
| TOTAL ASSETS | $ | 7,709,339 | $ | 8,403,034 | ||||||||
|
LIABILITIES AND EQUITY |
||||||||||||
| Current liabilities: | ||||||||||||
| Current portion of long-term debt | $ | – | $ | 958,713 | ||||||||
| Accounts payable trade | 77,495 | 32,761 | ||||||||||
| Revenues and royalties payable | 184,343 | 171,028 | ||||||||||
| Accrued capital expenditures | 74,757 | 69,744 | ||||||||||
| Accrued interest | 35,183 | 40,971 | ||||||||||
| Accrued liabilities and other | 109,399 | 118,815 | ||||||||||
| Taxes payable | 38,494 | 28,771 | ||||||||||
| Derivative liabilities | 106,255 | 132,525 | ||||||||||
| Total current liabilities | 625,926 | 1,553,328 | ||||||||||
| Long-term debt | 2,835,128 | 2,764,716 | ||||||||||
| Asset retirement obligations | 147,941 | 129,206 | ||||||||||
| Other long-term liabilities | 36,491 | 36,642 | ||||||||||
| Total liabilities | 3,645,486 | 4,483,892 | ||||||||||
| Commitments and contingencies | ||||||||||||
| Equity: | ||||||||||||
|
Common stock, $0.001 par value, 225,000,000 shares authorized; 92,130,240 issued and 90,967,365 outstanding as of September 30, 2018 and 92,094,837 issued and 90,698,889 outstanding as of December 31, 2017 |
92 | 92 | ||||||||||
| Additional paid-in capital | 6,411,669 | 6,405,490 | ||||||||||
| Accumulated deficit | (2,347,908 | ) | (2,486,440 | ) | ||||||||
| Total equity | 4,063,853 | 3,919,142 | ||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 7,709,339 | $ | 8,403,034 | ||||||||
| 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, | |||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| OPERATING REVENUES | ||||||||||||||||||||
| Oil, NGL and natural gas sales | $ | 566,695 | $ | 324,191 | $ | 1,608,181 | $ | 1,007,023 | ||||||||||||
|
OPERATING EXPENSES |
||||||||||||||||||||
| Lease operating expenses | 92,461 | 90,615 | 274,763 | 267,277 | ||||||||||||||||
| Production taxes | 46,509 | 27,499 | 127,653 | 86,621 | ||||||||||||||||
| Depreciation, depletion and amortization | 197,006 | 212,846 | 584,219 | 673,288 | ||||||||||||||||
| Exploration and impairment | 11,030 | 17,657 | 39,011 | 63,793 | ||||||||||||||||
| General and administrative | 31,901 | 30,084 | 94,982 | 92,644 | ||||||||||||||||
| Derivative loss, net | 21,063 | 30,867 | 177,210 | 47,281 | ||||||||||||||||
| Loss on sale of properties | 230 | 398,752 | 1,716 | 401,050 | ||||||||||||||||
| Amortization of deferred gain on sale | (2,870 | ) | (3,175 | ) | (8,699 | ) | (9,757 | ) | ||||||||||||
| Total operating expenses | 397,330 | 805,145 | 1,290,855 | 1,622,197 | ||||||||||||||||
|
INCOME (LOSS) FROM OPERATIONS |
169,365 | (480,954 | ) | 317,326 | (615,174 | ) | ||||||||||||||
|
OTHER INCOME (EXPENSE) |
||||||||||||||||||||
| Interest expense | (48,328 | ) | (47,693 | ) | (149,558 | ) | (143,641 | ) | ||||||||||||
| Loss on extinguishment of debt | – | – | (31,968 | ) | (1,540 | ) | ||||||||||||||
| Interest income and other | 363 | (83 | ) | 2,732 | 970 | |||||||||||||||
| Total other expense | (47,965 | ) | (47,776 | ) | (178,794 | ) | (144,211 | ) | ||||||||||||
|
INCOME (LOSS) BEFORE INCOME TAXES |
121,400 | (528,730 | ) | 138,532 | (759,385 | ) | ||||||||||||||
|
INCOME TAX BENEFIT |
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| Current | – | (3,161 | ) | – | (6,367 | ) | ||||||||||||||
| Deferred | – | (239,137 | ) | – | (313,634 | ) | ||||||||||||||
| Total income tax benefit | – | (242,298 | ) | – | (320,001 | ) | ||||||||||||||
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NET INCOME (LOSS) |
121,400 | (286,432 | ) | 138,532 | (439,384 | ) | ||||||||||||||
| Net loss attributable to noncontrolling interests | – | – | – | 14 | ||||||||||||||||
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NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ | 121,400 | $ | (286,432 | ) | $ | 138,532 | $ | (439,370 | ) | ||||||||||
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INCOME (LOSS) PER COMMON SHARE (1) |
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| Basic | $ | 1.33 | $ | (3.16 | ) | $ | 1.52 | $ | (4.85 | ) | ||||||||||
| Diluted | $ | 1.32 | $ | (3.16 | ) | $ | 1.51 | $ | (4.85 | ) | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING (1) | ||||||||||||||||||||
| Basic | 90,967 | 90,698 | 90,934 | 90,678 | ||||||||||||||||
| Diluted | 91,823 | 90,698 | 91,862 | 90,678 | ||||||||||||||||
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________________ |
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| (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. |
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| WHITING PETROLEUM CORPORATION | ||||||||||||||||||||
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Reconciliation of Net Income (Loss) Attributable to Common Shareholders to |
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| Adjusted Net Income (Loss) Attributable to Common Shareholders | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 121,400 | $ | (286,432 | ) | $ | 138,532 | $ | (439,370 | ) | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Amortization of deferred gain on sale | (2,870 | ) | (3,175 | ) | (8,699 | ) | (9,757 | ) | ||||||||||||
| Loss on sale of properties | 230 | 398,752 | 1,716 | 401,050 | ||||||||||||||||
| Impairment expense | 7,302 | 10,624 | 25,612 | 44,270 | ||||||||||||||||
| Loss on extinguishment of debt | – | – | 31,968 | 1,540 | ||||||||||||||||
| Total measure of derivative loss reported under U.S. GAAP | 21,063 | 30,867 | 177,210 | 47,281 | ||||||||||||||||
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Total net cash settlements received (paid) on commodity derivatives during the period |
(62,409 | ) | 4,598 | (140,625 | ) | 10,656 | ||||||||||||||
| Tax impact of adjustments above | – | (164,742 | ) | – | (184,650 | ) | ||||||||||||||
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Tax impact of Section 382 limitation on net operating losses and tax credits |
– | (40,624 | ) | – | (40,624 | ) | ||||||||||||||
| Adjusted net income (loss) attributable to common shareholders (1) | $ | 84,716 | $ | (50,132 | ) | $ | 225,714 | $ | (169,604 | ) | ||||||||||
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Adjusted net income (loss) attributable to common shareholders per share, basic (2) |
$ | 0.93 | $ | (0.55 | ) | $ | 2.48 | $ | (1.87 | ) | ||||||||||
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Adjusted net income (loss) attributable to common shareholders per share, diluted (2) |
$ | 0.92 | $ | (0.55 | ) | $ | 2.46 | $ | (1.87 | ) | ||||||||||
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________________ |
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| (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. |
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| (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. |
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| WHITING PETROLEUM CORPORATION | ||||||||||||||||||||
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Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow and Discretionary Cash Flow in Excess of Capital Expenditures |
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| (in thousands) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| Net cash provided by operating activities | $ | 263,756 | $ | 99,343 | $ | 807,036 | $ | 290,406 | ||||||||||||
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Operating cash outflow for settlement of commodity derivative contract |
– | – | 61,036 | – | ||||||||||||||||
| Exploration | 3,728 | 7,033 | 13,399 | 19,523 | ||||||||||||||||
| Changes in working capital | 29,457 | 41,490 | (25,022 | ) | 159,874 | |||||||||||||||
| Discretionary cash flow (1) | 296,941 | 147,866 | 856,449 | 469,803 | ||||||||||||||||
| Capital expenditures | (207,278 | ) | (321,203 | ) | (597,672 | ) | (741,672 | ) | ||||||||||||
| Discretionary cash flow in excess of capital expenditures (1) | $ | 89,663 | $ | (173,337 | ) | $ | 258,777 | $ | (271,869 | ) | ||||||||||
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Reconciliation of Net Cash Provided by Operating Activities to Operating Cash Flow in Excess of Capital Expenditures |
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| (in thousands) | ||||||||||||
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Three Months Ended | Twelve Months Ended | ||||||||||
| September 30, 2018 | September 30, 2018 | |||||||||||
| Net cash provided by operating activities | $ | 263,756 | $ | 1,093,739 | ||||||||
| Capital expenditures | (207,278 | ) | (768,429 | ) | ||||||||
| Operating cash flow in excess of capital expenditures (1) | $ | 56,478 | $ | 325,310 | ||||||||
Contacts
Whiting Petroleum Corporation
Eric K. Hagen, 303-837-1661
Vice
President, Investor Relations
Eric.Hagen@whiting.com