Company Reports Net Income Available to Common Shareholders of
$30.9 Million or $0.59 Per Share Record Production of 15.1 MMBOE in
the First Nine Months of 2009 Up 21% from Comparable 2008 Period
Due to Increasing Production from Bakken and EOR Projects Q3
Production Hits a Record 55,760 BOE Per Day Maki 11-27H Sets New
Bakken Production Record with Initial Rate of 4,761 BOE/D Company
Increases Its 2009 Exploration and Development Budget to $470
Million from $440 Million DENVER, Oct. 28 /PRNewswire-FirstCall/ --
Whiting Petroleum Corporation (NYSE:WLL) today reported third
quarter 2009 net income available to common shareholders of $30.9
million, or $0.59 per basic and diluted share, on total revenues of
$269.3 million. This compares to third quarter 2008 net income of
$112.4 million, or $2.66 per basic share and $2.65 per diluted
share, on total revenues of $388.4 million. Third quarter 2009
results include a non-cash after-tax hedging gain of $15.8 million,
or $0.31 per share. Discretionary cash flow in the third quarter of
2009 totaled $145.9 million, compared to the $255.6 million
reported for the same period in 2008. A reconciliation of
discretionary cash flow to net cash provided by operating
activities is included at the end of this news release. The
decrease in discretionary cash flow and net income in the third
quarter of 2009 versus the comparable 2008 period was primarily the
result of a 46% decline in the Company's wellhead oil price,
including the price of natural gas liquids (NGLs), and a 61%
decrease in its wellhead natural gas price. Production in the third
quarter of 2009 totaled a record 5.13 million barrels of oil
equivalent (MMBOE), of which 3.95 MMBOE were crude oil/NGLs (77%)
and 1.18 MMBOE were natural gas (23%). The third quarter 2009
production total equates to a new record daily average production
rate of 55,760 barrels of oil equivalent (BOE), which represents a
10% increase from the 50,480 BOE per day average rate in 2008's
third quarter. Production increased in the third quarter of 2009
compared to the third quarter of 2008 due to successful drilling
results in the prolific Bakken play in North Dakota as well as
continued production increases from the Company's enhanced oil
recovery (EOR) projects at the Postle and North Ward Estes fields.
Production rose 2% to 5.13 MMBOE in the third quarter of 2009
compared to 5.03 MMBOE in the second quarter of 2009. Nine Months
Financial and Operating Results For the nine months ended September
30, 2009, Whiting reported a net loss available to common
stockholders of $106.0 million, or $2.15 per basic and diluted
share, on total revenues of $663.3 million. This compares to net
income of $255.2 million, or $6.03 per basic share and $6.01 per
diluted share, on total revenues of $998.3 million in the first
nine months of 2008. Results in 2009 include non-cash after-tax
hedging losses of $96.3 million or $1.93 per share. Discretionary
cash flow for the first nine months of 2009 totaled $327.6 million,
compared to $633.4 million in the comparable 2008 period.
Production in the first nine months of 2009 totaled 15.1 MMBOE, or
55,140 BOE per day, representing a 21% increase over the 12.4
MMBOE, or 45,280 BOE per day, in the first nine months of 2008.
James J. Volker, Whiting's Chairman, President and CEO, commented,
"With a focus on our Bakken drilling program and our two EOR
projects, we continue to generate all of our production growth
organically. Our Bakken play in North Dakota and our CO2 floods at
the Postle and North Ward Estes fields are heavily weighted toward
oil. Based on the performance of these projects in the third
quarter of 2009, we have increased our year-over-year production
growth estimate to a range of 14% to 16%, up from a previous range
of 10% to 12%." Mr. Volker continued, "Our capital expenditures in
the third quarter of 2009 were funded through discretionary cash
flow, and we expect the same in the fourth quarter of 2009. Our
discretionary cash flow in the third quarter of 2009 was $145.9
million. In the third quarter, we used the excess of cash flow over
our $80.3 million of capital expenditures to pay down bank debt. At
September 30, 2009, borrowings on our credit facility totaled $150
million, down from $220 million at June 30, 2009. Looking ahead, we
plan to add three drilling rigs at Sanish field during the first
quarter of 2010. This will bring our total operated rig count in
the field to nine. We believe we can drill 72 operated wells at
Sanish in 2010 with nine rigs. This compares to 36 operated Sanish
wells expected to be drilled in 2009 and should set the stage for
continued organic growth next year." Bakken and Three Forks
Development Increases Production Whiting's net production from the
Middle Bakken formation in the Sanish and Parshall fields of
Mountrail County, North Dakota averaged 17,410 BOE per day in
September 2009, up 13% from the 15,448 BOE average daily rate in
June 2009 and up 40% from the 12,420 BOE average daily rate in
September 2008. Whiting's net production from the Sanish field in
the third quarter of 2009 averaged 10,470 BOE per day, which
compared to the 10,765 BOE per day average in the second quarter of
2009. The slight decline reflects the decline in drilling activity
and capital expenditures in the third quarter of 2009 versus the
second quarter of 2009. Our net production from the Sanish field
averaged 10,565 BOE per day in September 2009, a 4% increase from
10,179 BOE per day in June 2009 and an 80% increase from 5,860 BOE
per day in September 2008. The Company recently added a drilling
rig in the Sanish field, bringing to six the total number of
Whiting-operated rigs in the field. As of October 20, 2009, six
wells were being drilled in the Sanish field and four wells were
being completed. As of October 20, 2009, the Company had
participated in a total of 84 producing wells at Sanish, 55 of
which are operated by Whiting. The Company holds interests in
119,530 gross acres (69,643 net acres) in the Sanish field.
Immediately east of the Sanish field is the Parshall field, where
we own interests in 74,840 gross acres (18,365 net acres). The
Company's net production from its interests in the Parshall field
during the third quarter of 2009 averaged 6,830 BOE per day, a 34%
increase from the 5,085 BOE per day average in the second quarter
of 2009. Our net production from the Parshall field averaged 6,845
BOE per day in September 2009, a 30% increase from 5,268 BOE per
day in June 2009 and a 4% increase from the 6,560 BOE average daily
rate in September 2008. The principal operator of the Parshall
field, EOG Resources, Inc., has completed all of the 16 wells that
had been waiting on completion earlier in 2009. As of October 20,
2009, we have participated in 109 wells in Parshall, of which 108
are producing and one is being drilled. We recently completed three
prolific oil wells in the Sanish field. On October 23, 2009,
Whiting posted a new record initial production rate for a Bakken
well. The Maki 11-27H flowed 4,345 barrels of oil and 2.5 million
cubic feet (MMcf) of gas (4,761 BOE) per day during a 24-hour test
of the Middle Bakken. The production rate was gauged on a
40/64-inch choke with a flowing casing pressure of 1,190 pounds per
square inch (psi). The previous record was held by the
Whiting-operated Richardson Federal 11-9H with an initial
production rate of 4,570 BOE per day. The Maki well was fracture
stimulated in 18 stages, 10 stages using sliding sleeves and eight
stages using the "plug and perf" method. The Maki well was drilled
in the northeast portion of Sanish field, approximately three miles
north-northeast of the Richardson Federal well. Whiting holds a 76%
working interest and a 62% net revenue interest in the Maki 11-27H.
During a 24-hour test of the Middle Bakken formation on September
18, 2009, the Tollefson 44-10H flowed 2,409 barrels of oil and 1.4
MMcf of gas (2,636 BOE) per day. The initial 24-hour production
rate was gauged on a 32/64-inch choke with a flowing casing
pressure of 970 psi. Whiting drilled the Tollefson 44-10H well in
the southeastern portion of the Sanish field. Whiting, the operator
of the well, holds a 38% working interest and a 31% net revenue
interest in the new producer. Approximately six miles to the
northwest, Whiting completed the Kannianen 11-5H on September 3,
2009 flowing at an initial daily rate of 1,773 barrels of oil and
1.3 MMcf of gas (1,998 BOE) per day. The initial 24-hour production
rate was gauged on a 32/64-inch choke with a flowing casing
pressure of 740 psi. Whiting, the operator of the well, holds a 46%
working interest and a 38% net revenue interest in the new
producer, which was drilled near the center of the field. Whiting
recently drilled its third Three Forks well in the Sanish field.
The Ogden 11-3TFH, located on the northwest side of Sanish field,
is scheduled to be completed within the next three weeks. The well
is expected to be fracture stimulated in 24 stages, all with
sliding sleeves. Whiting is the first operator in the world to
utilize a 24-stage sliding sleeve completion system. Whiting holds
a 57% working interest and a 47% net revenue interest in the Ogden
well. From January 1, 2009 through October 23, 2009, Whiting has
completed 30 new producers in the Sanish field. The Company
estimates that it will drill and complete a total of 36 wells in
the Sanish field in 2009. Whiting completed the installation of its
17-mile oil line connecting the Sanish field to the Enbridge
pipeline in Stanley, North Dakota. The pipeline is expected to be
on stream in the fourth quarter of 2009. The 8-inch diameter line
will have a daily capacity of approximately 65,000 barrels of oil
per day. Enbridge Inc. has ongoing construction to expand its oil
pipeline in Mountrail County, North Dakota, initially to a capacity
of 161,000 barrels of oil per day from its current capacity of
110,000 barrels per day. This expansion is expected to be completed
in the first quarter of 2010. Whiting continues to reduce its
completed well cost for Bakken wells in the Sanish field. The
reduction in costs is primarily the result of our "Drill Wells On
Paper" (DWOP) program which applies the best practices and best
logistical planning of all our drilling and completion contractors
to produce drilling and completion efficiencies. This has reduced
the average time from spud date to rig release to below 30 days
from 60 days earlier in our drilling program. The completed well
cost for our most recent wells in the Sanish field are expected to
be approximately $5 million per well, down from $8 million to $10
million per well when the development project was initiated. In
December 2008, Whiting completed the expansion of its Robinson Lake
gas plant to an inlet capacity of 10 MMcf of gas per day from 3
MMcf of gas per day. Three 2,000-hp electric compressors were
installed this summer, bringing the plant's current capacity to 21
MMcf per day. Whiting owns a 50% interest in the plant. The plant
receives 25% of net proceeds from natural gas and NGL sales. As of
October 20, 2009, sales from the plant were 11.4 MMcf of gas and
2,435 barrels of NGLs per day. Whiting was netting 1.4 MMcf of gas
and 304 barrels of NGLs per day from its plant ownership. There are
currently 53 Whiting-operated wells and 37 third-party wells
connected to the gas gathering system. The following table
summarizes the Company's operated and non-operated net production
from the Sanish and Parshall fields in the third quarter and in
September 2009: Operated and Non-operated Net Production by Field
(In BOE) 3rd Qtr 2009 September 2009 ----------------------------
-------------------------- Parshall Sanish Total Parshall Sanish
Total -------- ------ ----- -------- ------ ----- Whiting Operated
59,990 847,090 907,080 18,457 276,974 295,431 Non-Operated 568,588
116,273 684,861 186,925 39,953 226,878 ------- ------- ---------
------- ------- ------- 628,578 963,363 1,591,941 205,382 316,927
522,309 ======= ======= ========= ======= ======= ======= Daily BOE
6,830 10,470 17,300(1) 6,845 10,565 17,410(1) (1) Includes net BOEs
from plant operations of approximately 500 BOE per day Increasing
Production from EOR Projects Production continues to increase from
our Postle field, which produces from the Morrow sandstone, in
Texas County, Oklahoma. In the third quarter of 2009, the field
produced at an average net rate of 8,670 BOE per day, representing
a 32% increase from the 6,560 BOE net daily rate in the third
quarter of 2008. In September 2009, the field produced at an
average net rate of 9,000 BOE per day, Postle's highest production
rate in 33 years. The September 2009 average daily rate represents
a 3% sequential increase over the net 8,734 BOE per day rate in
June 2009. Four of the five units in the Postle field are currently
active CO2 EOR projects. The fifth unit produces from the Cherokee
formation, not the Morrow, and is being evaluated for waterflood
reactivation. CO2 injection into the fifth unit is not currently
planned. As of October 20, 2009, there were three workover rigs
active in the field. Earlier this year, our Midland team was
presented with a 2008 Excellence Award from the Oil and Gas
Investor for "Best Field Rejuvenation" at the Postle field. Net
production from the field has more than doubled since Whiting
acquired it in August 2005, from 4,200 BOE per day to 9,000 BOE per
day in September 2009. Production also continues to ramp up at our
North Ward Estes field in Ward and Winkler Counties, Texas.
Production from the field increased 12% from a net 5,740 BOE per
day in the third quarter of 2008 to a net 6,415 BOE per day in the
third quarter of 2009. The field's production averaged 6,635 BOE in
September 2009, up slightly from the 6,593 BOE average rate in June
2009. Whiting initiated CO2 injection in Phase I in May 2007 and in
Phase II in March 2009. In this field, Whiting is developing new
and reactivated wells for water and CO2 injection and production
purposes. Whiting plans to install oil, gas and water processing
facilities in a total of four phases through 2015. We estimate that
Phase III-A will be substantially complete in the fourth quarter of
2010. As of October 20, 2009, there were 11 workover rigs active in
the field. Other Operations Updates -- Lewis & Clark Prospect.
Whiting recently reached total measured depth at its Federal
32-4HBKCE, a casing exit in Golden Valley County, North Dakota.
This horizontal well is scheduled to test an 8,550-foot lateral in
the Three Forks formation. The well will be fracture stimulated in
16 stages with completion results expected in mid-November 2009.
Whiting holds an 86% working interest and a 70% net revenue
interest in the well. -- Flat Rock Field. Completion operations are
under way at the Company's Ute Tribal 11-30-14-20 well, located in
the Flat Rock field in Uintah County, Utah. This vertical well will
test the Entrada formation at a depth of approximately 11,500 feet.
Whiting holds a 100% working interest and an 85% net revenue
interest in the well. The Company moved a drilling rig to Flat Rock
field in early September 2009 after signing a fixed-price gas
contract for the field's production. The contract covers daily
volumes of 10 MMcf of gas from September 1, 2009 through December
31, 2014 at a wellhead price of $5.50 per Mcf. Effective January 1,
2010 through December 2011, an additional 5 MMcf of daily gas
volumes are under contract at a fixed-price of $5.38 per Mcf at the
wellhead. -- Sulphur Creek Field. Whiting recently executed a
similar fixed-price gas contract for production from its Boies
Ranch prospect in Rio Blanco County, Colorado. The contract, which
is effective November 1, 2009, covers daily volumes of 5 MMcf
through December 31, 2010, 4 MMcf in 2011, 3 MMcf in 2012, 2 MMcf
in 2013, and 1 MMcf in 2014 at a fixed-price of $5.34 at the
wellhead. A consolidated schedule of these two fixed-price gas
contracts can be found on page 13 of this news release. Operated
Rig Count As of October 20, 2009, Whiting was running nine operated
drilling rigs and 34 operated workover rigs. We were also
participating in the drilling of one non-operated well in the
Parshall field. The breakdown of our operated rigs is as follows:
Region Drilling Workover ------ -------- -------- Northern Rockies
Sanish Field 6 3 Lewis & Clark Prospect 1 0 Other 0 5 Central
Rockies Flat Rock Field 1 0 Other 0 5 CO2 Projects Postle 0 3 North
Ward Estes 0 11 Mid-Continent/Michigan 0 2 Permian 1 5 --- ---
Totals 9 34 Currently, we expect to drop the rig that recently
drilled our Federal 34-2HBKCE well at the Lewis & Clark
prospect as well as the rig that is currently drilling a well in
our Permian region. We expect to pick up a larger rig to continue
our Lewis & Clark project in early 2010. Thus, we expect our
operated drilling rig count to approximate seven rigs and our
operated workover rig count to average between 30 and 35 through
year-end 2009. During the first quarter of 2010, we expect our
operated drilling rig count to increase to 10 with the addition of
three rigs in the Sanish field. However, we review plans weekly and
may add or subtract rigs with changes in oil and gas prices. 2009
Exploration and Development Budget Our current 2009 capital budget
for exploration and development expenditures is $470.0 million,
which compares to the $440.0 million reported in our July 29, 2009
news release. Of this $470.0 million, we had invested $364.4
million as of September 30, 2009. We expect the remaining $105.6
million to be funded with net cash provided by our operating
activities in the fourth quarter of 2009 based on prevailing oil
and natural gas prices. The $30 million increase from our
previously announced budget is due primarily to accelerated
drilling at the Flat Rock field, the Lewis & Clark prospect,
and the Sanish and Parshall fields as well as additional
development at the North Ward Estes field. The table below
summarizes our discretionary cash flow and capital expenditures
over the first nine months of 2009 and our projected capital
expenditures for the fourth quarter: Q1 Q2 Q3 Subtotal Q4Est. Total
-- -- -- ------- ----- ----- Discretionary Cash Flow ($MM) $71.9
$109.8 $145.9 $327.6 N/A N/A Capital Expenditures ($MM) $176.4
$107.7 $80.3 $364.4 $105.6 $470.0 The following table shows a
breakdown of our planned exploration and development expenditures
for 2009: 2009 Planned Capital Expenditures (In millions)
------------- Northern Rockies $235.8 Central Rockies $38.0 Permian
Basin $18.7 EOR Projects North Ward Estes (1) $114.2 Postle (1)
$33.3 Exploration and Early Rig Termination $30.0 ----- Total
$470.0 ====== (1) 2009 planned capital expenditures at our CO2
projects include $36.9 million for purchased CO2 at North Ward
Estes and $15.3 million for Postle CO2 purchases. Commercial
Banking Facility Earlier this month, Whiting's bank syndicate
reaffirmed our borrowing base at $1.1 billion. At September 30,
2009, we had $150 million drawn on, and $3 million in letters of
credit outstanding under, the facility, yielding availability of
$947 million. Our debt to total capitalization ratio was 25.2% at
September 30, 2009. During the third quarter, we repaid $70 million
of bank debt using discretionary cash flow in excess of exploration
and development expenditures. Given the reduction in bank debt and
continued increase in cash flows, we were well within all financial
covenants under our bank credit agreement and bond indentures at
September 30, 2009. The following table summarizes the Company's
net production and commodity price realizations for the quarters
ended September 30, 2009 and 2008: Three Months Ended
------------------ Production 9/30/09 9/30/08 Change ----------
------- ------- ------ Oil and condensate (MMBbls) 3.95 3.28 20%
Natural gas (Bcf) 7.10 8.16 (13%) Total equivalent (MMBOE) 5.13
4.64 10% Average Sales Price ------------------- Oil and condensate
(per Bbl): Price received $58.86 $108.04 (46%) Effect of crude oil
hedging (1) (2.42) (12.76) ------ ------- Realized price $56.44
$95.28 (41%) ====== ====== Natural gas (per Mcf): Price received
$3.35 $8.65 (61%) Effect of natural gas hedging (1) 0.05 - ---- ---
Realized price $3.40 $8.65 (61%) ===== ===== (1) Whiting realized
pre-tax cash settlement losses on its crude oil and natural gas
hedges of $9.2 million during the third quarter of 2009. A summary
of Whiting's outstanding hedges is included later in this news
release. Third Quarter and First Nine Months of 2009 Costs and
Margins A summary of production, cash revenues and cash costs on a
per BOE basis is as follows: Per BOE, Except Production
-------------------------- Three Months Nine Months Ended September
30, Ended September 30, ------------------- -------------------
2009 2008 2009 2008 ---- ---- ---- ---- Production (MMBOE) 5.13
4.64 15.05 12.41 Sales price, net of hedging $48.13 $82.59 $41.08
$79.77 Lease operating expense 11.46 13.93 11.78 14.33 Production
tax 3.66 6.08 2.87 5.80 General & administrative 2.21 3.72 2.03
4.18 Exploration 1.16 1.58 1.65 1.74 Cash interest expense 2.47
3.45 2.72 3.56 Cash income tax expense (0.10) 0.10 (0.07) 0.11
------ ---- ------ ---- $27.27 $53.73 $20.10 $50.05 ====== ======
====== ====== During the third quarter, the company-wide basis
differential for crude oil compared to NYMEX was $9.43 per barrel,
which compared to $8.96 per barrel in the second quarter of 2009.
We expect our oil price differential to average between $8.50 and
$9.50 during the remainder of 2009. Within the Bakken,
Whiting-operated production has a current differential of $9.50 per
barrel. The company-wide basis differential for natural gas
compared to NYMEX in the third quarter was $0.05 per Mcf, which
compared to $0.42 per Mcf in the second quarter of 2009. We expect
our natural gas price differential to average between $0.10 and
$0.40 during the remainder of 2009. Third Quarter 2009 Drilling
Summary Whiting posted a 100% success rate for the 36 gross (11.5
net) wells in which it participated during the third quarter of
2009. The table below summarizes Whiting's operated and
non-operated drilling activity and exploration and development
costs incurred for the three and nine months ended September 30,
2009: Gross/Net Wells Completed ------------------------- Expl.
& Dev. Total New % Success Cost Producing Non-Producing
Drilling Rate (in millions) --------- ------------- -------- ----
------------- Q309 36 / 11.5 0 / 0 36 / 11.5 100% / 100% $80.3 9M09
111 / 41.8 0 / 0 111 / 41.8 100% / 100% $364.4 Outlook for Third
Quarter and Full-Year 2009 The following table provides a summary
of certain estimates for the fourth quarter and full-year 2009
based on current forecasts, including Whiting's full-year 2009
capital budget of $470.0 million (excluding any potential
acquisition costs). Guidance for the fourth quarter and full-year
2009 is as follows: Guidance -------- Fourth Quarter Full-Year 2009
2009 ---- ---- Production (MMBOE) 5.00 - 5.20 20.00 - 20.30 Lease
operating expense per BOE $11.40 - $11.80 $11.60 - $11.80 General
and admin. expense per BOE $2.20 - $2.40 $2.00 - $2.20 Interest
expense per BOE $3.00 - $3.20 $3.10 - $3.30 Depr., depletion and
amort. per BOE $19.40 - $19.70 $19.70 - $20.00 Prod. taxes (% of
production revenue) 7.3% - 7.7% 7.1% - 7.3% Oil price differentials
to NYMEX per Bbl $8.50 - $9.50 $9.00 - $10.00 Gas price
differentials to NYMEX per Mcf $0.10 - $ 0.40 $0.40 - $0.60 Oil
Hedges The following summarizes Whiting's crude oil hedges as of
October 1, 2009: Weighted Average NYMEX As a Percentage of Hedge
Contracted Volume Price Collar Range September 2009 Period (Bbls
per Month) (per Bbl) Oil Production (1) ------ --------------
------- ----------------- 2009 Q4 489,190 $61.39 - $76.28 38.0%
2010 Q1 440,910 $60.66 - $76.30 34.2% Q2 425,643 $63.02 - $81.46
33.1% Q3 415,398 $60.68 - $78.43 32.3% Q4 400,146 $60.69 - $79.67
31.1% 2011 Q1 369,917 $56.73 - $85.28 28.7% Q2 369,696 $56.72 -
$85.26 28.7% Q3 369,479 $56.71 - $85.22 28.7% Q4 369,255 $56.69 -
$85.21 28.7% 2012 Q1 339,054 $56.39 - $86.95 26.3% Q2 338,850
$56.38 - $86.93 26.3% Q3 338,650 $56.37 - $86.89 26.3% Q4 338,477
$56.36 - $86.88 26.3% 2013 Q1 290,000 $55.34 - $85.94 22.5% Q2
290,000 $55.34 - $85.94 22.5% Q3 290,000 $55.34 - $85.94 22.5% Oct
290,000 $55.34 - $85.94 22.5% Nov 190,000 $54.59 - $81.75 14.8% (1)
Under Whiting's credit agreement, the Company is allowed to enter
into derivative contracts regarding forecasted PDP production
volumes for five years as follows: Year 1 - 90%; Years 2 and 3 -
85%; Year 4 - 80% and Year 5 - 75%. The Company has hedged
approximately 55% of forecasted PDP crude oil production in all
periods shown above. Forecasted PDP volumes were based on internal
reserve estimates as of June 30, 2009. The following summarizes
Whiting Petroleum Corporation's natural gas hedges as of October 1,
2009: Weighted Average NYMEX As a Percentage of Hedge Contracted
Volume Price Collar Range September 2009 Period (MMBtu per Month)
(per MMBtu) Gas Production (1) ------ --------------- ---------
----------------- 2009 Q4 44,874 $7.00 - $14.85 2.0% 2010 Q1 43,295
$7.00 - $18.65 1.9% Q2 41,835 $6.00 - $13.20 1.8% Q3 40,555 $6.00 -
$14.00 1.8% Q4 39,445 $7.00 - $14.20 1.7% 2011 Q1 38,139 $7.00 -
$17.40 1.7% Q2 36,954 $6.00 - $13.05 1.6% Q3 35,855 $6.00 - $13.65
1.6% Q4 34,554 $7.00 - $14.25 1.5% 2012 Q1 33,381 $7.00 - $15.55
1.5% Q2 32,477 $6.00 - $13.60 1.4% Q3 31,502 $6.00 - $14.45 1.4% Q4
30,640 $7.00 - $13.40 1.4% (1) Under Whiting's credit agreement,
the Company is allowed to enter into derivative contracts regarding
forecasted PDP production volumes for five years as follows: Year 1
- 90%; Years 2 and 3 - 85%; Year 4 - 80% and Year 5 - 75%. The
Company has hedged approximately 2.5% of forecasted PDP natural gas
production in all periods shown above. Forecasted PDP volumes were
based on internal reserve estimates as of June 30, 2009. Whiting
also has the following fixed-price natural gas contracts in place
as of October 1, 2009: Weighted Average NYMEX As a Percentage of
Hedge Contracted Volume Price Range September 2009 Period (MMBtu
per Month) (per MMBtu) Gas Production (1) ------ ---------------
--------- ----------------- 2009 Q4 496,333 $5.32 21.9% 2010 Q1
688,000 $5.36 30.4% Q2 694,667 $5.36 30.7% Q3 701,333 $5.36 31.0%
Q4 701,333 $5.36 31.0% 2011 Q1 658,000 $5.39 29.1% Q2 664,333 $5.38
29.3% Q3 648,667 $5.38 28.6% Q4 648,667 $5.38 28.6% 2012 Q1 456,000
$5.41 20.1% Q2 460,333 $5.41 20.3% Q3 464,667 $5.41 20.5% Q4
398,667 $5.46 17.6% 2013 Q1 360,000 $5.47 15.9% Q2 364,000 $5.47
16.1% Q3 368,000 $5.47 16.2% Q4 368,000 $5.47 16.2% 2014 Q1 330,000
$5.49 14.6% Q2 333,667 $5.49 14.7% Q3 337,333 $5.49 14.9% Q4
337,333 $5.49 14.9% (1) Under Whiting's credit agreement, the
Company is allowed to enter into derivative contracts regarding
forecasted PDP production volumes for five years as follows: Year 1
- 90%; Years 2 and 3 - 85%; Year 4 - 80% and Year 5 - 75%. Based on
the above schedule, the Company has entered into fixed-price
natural gas contracts for the following percentages of forecasted
PDP natural gas production: 2010 - 40.1%; 2011 - 45.8%; 2012 -
36.1%; 2013 - 33.7%; 2014 - 35.0%. Forecasted PDP volumes were
based on internal reserve estimates as of June 30, 2009. Selected
Operating and Financial Statistics Three Months Ended Nine Months
Ended ------------------ ----------------- September 30, September
30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ----
---- Selected operating statistics Production Oil and condensate,
MBbl 3,947 3,284 11,290 8,676 Natural gas, MMcf 7,101 8,160 22,574
22,394 Oil equivalents, MBOE 5,130 4,644 15,052 12,408 Average
Prices Oil, Bbl (excludes hedging) $58.86 $108.04 $47.79 $104.21
Natural gas, Mcf (excludes hedging) $3.35 $8.65 $3.41 $8.87 Per BOE
Data Sales price (including hedging) $48.13 $82.59 $41.08 $79.77
Lease operating $11.46 $13.93 $11.78 $14.33 Production taxes $3.66
$6.08 $2.87 $5.80 Depreciation, depletion and amortization $19.74
$15.99 $20.04 $14.47 General and administrative $2.21 $3.72 $2.03
$4.18 Selected Financial Data (In thousands, except per share data)
Total revenues and other income $269,327 $388,434 $663,324 $998,258
Total costs and expenses $207,186 $211,487 $816,222 $594,666 Net
income (loss) $30,944 $112,417 $(105,978) $255,179 Net income
(loss) per common share, basic $0.59 $2.66 $(2.15) $6.03 Net income
(loss) per common share, diluted $0.59 $2.65 $(2.15) $6.01 Average
shares outstanding, basic 50,845 42,322 49,774 42,305 Average
shares outstanding, diluted 51,174 42,465 49,774 42,464 Net cash
provided by operating activities $143,515 $282,361 $287,817
$611,452 Net cash used in investing activities $(65,472) $(286,922)
$(352,394) $(855,586) Net cash provided by financing activities
$(75,361) $- $70,813 $250,000 Conference Call The Company's
management will host a conference call with investors, analysts and
other interested parties on Thursday, October 29, 2009 at 11:00
a.m. EDT (10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting's third
quarter 2009 financial and operating results. Please call (866)
314-4483 (U.S./Canada) or (617) 213-8049 (International) and enter
the pass code 197291122 to be connected to the call. Access to a
live Internet broadcast will be available at
http://www.whiting.com/ by clicking on the "Investor Relations" box
on the menu and then on the link titled "Webcasts." Slides for the
conference call will be available on this website beginning at
11:00 a.m. (EDT) on October 29, 2009. A telephonic replay will be
available beginning approximately two hours after the call on
Thursday, October 29, 2009 and continuing through Thursday,
November 5, 2009. You may access this replay at (888) 286-8010
(U.S./Canada) or (617) 801-6888 (International) and entering the
pass code 44403920. You may also access a web archive at
http://www.whiting.com/ beginning approximately one hour after the
conference call. About Whiting Petroleum Corporation Whiting
Petroleum Corporation, a Delaware corporation, is an independent
oil and gas company that acquires, exploits, develops and explores
for crude oil, natural gas and natural gas liquids primarily in the
Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and
Michigan regions of the United States. 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 the Private
Securities Litigation Reform Act of 1995. 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 oil or natural gas prices;
impacts of the global recession and tight credit markets; our level
of success in exploitation, exploration, development and production
activities; adverse weather conditions that may negatively impact
development or production activities; the timing of our exploration
and development expenditures, including our ability to obtain CO2;
inaccuracies of our reserve estimates or our assumptions underlying
them; revisions to reserve estimates as a result of changes in
commodity prices; risks related to our level of indebtedness and
periodic redeterminations of the borrowing base under our credit
agreement; 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 and acquisitions;
our ability to identify and complete acquisitions and to
successfully integrate acquired businesses; unforeseen
underperformance of or liabilities associated with acquired
properties; our ability to successfully complete potential asset
dispositions; the impacts of hedging on our results of operations;
failure of our properties to yield oil or gas in commercially
viable quantities; 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; 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 in the
regions in which we operate; risks arising out of our hedging
transactions; and other risks described under the caption "Risk
Factors" in our Quarterly Report on Form 10-Q for the period ended
June 30, 2009. We assume no obligation, and disclaim any duty, to
update the forward-looking statements in this news release.
SELECTED FINANCIAL DATA For further information and discussion on
the selected financial data below, please refer to Whiting
Petroleum Corporation's Third Quarter Form 10-Q for the three and
nine months ended September 30, 2009, to be filed with the
Securities and Exchange Commission. WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September
30, December 31, 2009 2008 ---- ---- ASSETS CURRENT ASSETS: Cash
and cash equivalents $15,860 $9,624 Accounts receivable trade, net
127,063 123,386 Derivative assets 7,803 46,780 Prepaid expenses and
other 7,222 37,284 ----- ------ Total current assets 157,948
217,074 PROPERTY AND EQUIPMENT: Oil and gas properties, successful
efforts method: Proved properties 4,708,604 4,423,197 Unproved
properties 99,135 106,436 Other property and equipment 112,920
91,099 ------- ------ Total property and equipment 4,920,659
4,620,732 Less accumulated depreciation, depletion and amortization
(1,178,667) (886,065) --------- --------- Total property and
equipment, net 3,741,992 3,734,667 --------- --------- DEBT
ISSUANCE COSTS 27,186 10,779 DERIVATIVE ASSETS 12,778 38,104 OTHER
LONG-TERM ASSETS 23,585 28,457 ------ ------ TOTAL $3,963,489
$4,029,081 ========== ========== WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share
and per share data) September 30, December 31, 2009 2008 ---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $18,326 $64,610 Accrued capital expenditures 23,372 84,960
Accrued liabilities 61,858 45,359 Accrued interest 20,285 9,673 Oil
and gas sales payable 35,990 35,106 Accrued employee compensation
and benefits 15,461 41,911 Production taxes payable 21,568 20,038
Deferred gain on sale 13,195 14,650 Derivative liabilities 25,050
17,354 Deferred income taxes 10,305 15,395 Tax sharing liability
2,112 2,112 ----- ----- Total current liabilities 247,522 351,168
NON-CURRENT LIABILITIES: Long-term debt 769,604 1,239,751 Deferred
income taxes 351,409 390,902 Deferred gain on sale 62,181 73,216
Production Participation Plan liability 69,168 66,166 Asset
retirement obligations 67,176 47,892 Derivative liabilities 86,197
28,131 Tax sharing liability 22,802 21,575 Other long-term
liabilities 2,980 1,489 ----- ----- Total non-current liabilities
1,431,517 1,869,122 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS'
EQUITY: Preferred stock; $0.001 par value; 5,000,000 shares
authorized; 6.25% convertible perpetual preferred stock, 3,450,000
and 0 shares issued and outstanding as of September 30, 2009 and
December 31, 2008, respectively, aggregate liquidation preference
of $345,000,000 3 - Common stock, $0.001 par value; 75,000,000
shares authorized, 51,363,728 issued and 50,845,106 outstanding as
of September 30, 2009 and 42,582,100 issued and 42,323,336
outstanding as of December 31, 2008 51 43 Additional paid-in
capital 1,543,037 971,310 Accumulated other comprehensive income
27,170 17,271 Retained earnings 714,189 820,167 ------- -------
Total stockholders' equity 2,284,450 1,808,791 --------- ---------
TOTAL $3,963,489 $4,029,081 ========== ========== WHITING PETROLEUM
CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In
thousands, except per share data) Three Months Ended Nine Months
Ended ------------------ ----------------- September 30, September
30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ----
---- REVENUES AND OTHER INCOME: Oil and natural gas sales $256,074
$425,392 $616,552 $1,102,658 Gain (loss) on hedging activities
7,774 (41,879) 28,072 (112,902) Amortization of deferred gain on
sale 4,222 4,720 12,595 7,677 Gain on sale of properties 1,101 -
5,709 - Interest income and other 156 201 396 825 --- --- --- ---
Total revenues and other income 269,327 388,434 663,324 998,258
------- ------- ------- ------- COSTS AND EXPENSES: Lease operating
58,807 64,690 177,343 177,866 Production taxes 18,792 28,245 43,225
71,988 Depreciation, depletion and amortization 101,273 74,233
301,622 179,555 Exploration and impairment 12,422 10,939 39,528
30,566 General and administrative 11,314 17,281 30,576 51,903
Interest expense 15,647 17,543 49,020 48,760 Change in Production
Participation Plan liability (678) 9,117 3,002 26,964 Commodity
derivative (gain) loss, net (10,391) (10,561) 171,906 7,064
-------- -------- ------- ----- Total costs and expenses 207,186
211,487 816,222 594,666 ------- ------- ------- ------- INCOME
(LOSS) BEFORE INCOME TAXES 62,141 176,947 (152,898) 403,592 INCOME
TAX EXPENSE (BENEFIT): Current (507) 481 (1,046) 1,353 Deferred
26,793 64,049 (50,785) 147,060 ------ ------ -------- ------- Total
income tax expense (benefit) 26,286 64,530 (51,831) 148,413 ------
------ -------- ------- NET INCOME (LOSS) 35,855 112,417 (101,067)
255,179 Preferred stock dividends declared (4,911) - (4,911) -
------- --- ------- --- NET INCOME (LOSS) AVAILABLE TO COMMON
SHAREHOLDERS $30,944 $112,417 $(105,978) $255,179 ======= ========
========== ======== NET INCOME (LOSS) PER COMMON SHARE, BASIC $0.59
$2.66 $(2.15) $6.03 ===== ===== ======= ===== NET INCOME (LOSS) PER
COMMON SHARE, DILUTED $0.59 $2.65 $(2.15) $6.01 ===== ===== =======
===== WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC 50,845 42,322
49,774 42,305 ====== ====== ====== ====== WEIGHTED AVERAGE SHARES
OUTSTANDING, DILUTED 51,174 42,465 49,774 42,464 ====== ======
====== ====== WHITING PETROLEUM CORPORATION Reconciliation of Net
Cash Provided by Operating Activities to Discretionary Cash Flow
(In thousands) Three Months Ended September 30, ------------- 2009
2008 ---- ---- $143,515 $282,361 Net cash provided by operating
activities 5,974 7,323 Exploration 1,351 (34,063) Changes in
working capital (4,911) - Preferred stock dividends paid -------
--- $145,929 $255,621 Discretionary cash flow (1) ======== ========
Nine Months Ended September 30, ------------- 2009 2008 ---- ----
$287,817 $611,452 Net cash provided by operating activities 24,785
21,550 Exploration 19,880 391 Changes in working capital (4,911) -
Preferred stock dividends paid ------- --- $327,571 $633,393
Discretionary cash flow (1) ======== ======== (1) Discretionary
cash flow is computed as net income plus exploration and impairment
costs, depreciation, depletion and amortization, deferred income
taxes, non-cash interest costs, non-cash compensation plan charges,
gain/loss on mark-to-market derivatives, preferred stock dividends
paid and other non-current items less the gain on sale of
properties and amortization of deferred gain on sale. The non-GAAP
measure of discretionary cash flow is presented because management
believes it provides useful information to investors for analysis
of the Company's ability to internally fund acquisitions,
exploration and development. Discretionary cash flow should not be
considered in isolation or as a substitute for net income, income
from operations, net cash provided by operating activities or other
income, cash flow or liquidity measures under GAAP and may not be
comparable to other similarly titled measures of other companies.
DATASOURCE: Whiting Petroleum Corporation CONTACT: John B. Kelso,
Director of Investor Relations of Whiting Petroleum Corporation,
+1-303-837-1661, Web Site: http://www.whiting.com/
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