Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the
“Company”) today announced third quarter 2021 results.
Third Quarter 2021 Highlights
- Revenue was $401 million for the quarter ending September 30,
2021
- Net income (GAAP) was $198 million or $5.00 per diluted
share
- Adjusted net income (non-GAAP) was $142 million or $3.57 per
diluted share
- Adjusted EBITDAX (non-GAAP) was $201 million
- September 30, 2021 net debt was $59 million (non-GAAP)
Lynn A. Peterson, President and CEO commented, “The team
continues to execute on our business plan as demonstrated by the
substantial cash provided by operating activities of $190 million
during the quarter and $526 million for the nine-month period. The
Company generated adjusted free cash flow during the quarter of
$128 million and $347 million for the nine months ended September
30, 2021. Commodity prices have continued to strengthen during the
year and under current prices, the Company expects to continue to
generate substantial free cash flow during the fourth quarter and
end the year with no debt and positive cash on our balance
sheet.”
Third Quarter 2021
Results
Revenue for the third quarter of 2021 increased $49 million to
$401 million when compared to the second quarter of 2021, primarily
due to increased commodity prices between periods.
Net income for the third quarter of 2021 was $198 million, or
$5.00 per share, as compared to a net loss of $61 million, or $1.57
per share, for the second quarter of 2021. Adjusted net income
(non-GAAP) for the third quarter of 2021 was $142 million, or $3.57
per diluted share, as compared to $118 million, or $3.01 per
diluted share, for the second quarter of 2021. The primary
difference between net income (loss) and adjusted net income for
both periods is non-cash expense related to the change in the value
of the Company’s hedging portfolio. The third quarter was also
affected by the gain on sale of properties related to the
previously announced divestiture.
The Company’s adjusted EBITDAX (non-GAAP) for the third quarter
of 2021 was $201 million compared to $176 million for the second
quarter of 2021. This resulted in net cash provided by operating
activities of $190 million and adjusted free cash flow (non-GAAP)
of $128 million. Adjusted EBITDAX (non-GAAP) for the nine months
ended September 30, 2021 was $548 million. Net cash provided by
operating activities was $526 million and adjusted free cash flow
(non-GAAP) was $347 million for the nine months ended September 30,
2021.
Adjusted net income, adjusted net income per share, adjusted
EBITDAX and adjusted free cash flow are non-GAAP financial
measures. Please refer to the end of this release for disclosures
and reconciliations regarding these measures.
Production for the third quarter averaged 92.1 thousand barrels
of oil equivalent per day (MBOE/d) which was consistent with the
previous quarter of 92.6 MBOE/d. Oil production averaged 51.8
thousand barrels of oil per day (MBO/d) compared to 53.4 MBO/d in
the second quarter 2021.
Capital expenditures in the third quarter of 2021 were $67
million compared to the second quarter 2021 spend of $58 million.
During the quarter, the Company drilled 10 gross/5.6 net operated
wells and turned in line 17 gross/9.1 net operated wells.
Lease operating expense (LOE) for the third quarter of 2021 was
$57 million compared to $64 million in the second quarter of 2021.
The decrease was primarily due to less operated expense workovers
and ongoing cost reduction measures. General and administrative
expenses in the third quarter of 2021 of $12 million was consistent
with the second quarter of 2021. Both quarters included
approximately $3 million of non-cash stock compensation costs.
Liquidity
As of September 30, 2021, the Company had a borrowing base of
$750 million, borrowings of $72 million and unrestricted cash of
$13 million, resulting in total liquidity of $689 million, net of
outstanding letters of credit. Whiting expects to continue to fund
its operations fully within operating cash flow. Based on the above
guidance, the Company forecasts to be in a positive net cash
position with no outstanding balance on its credit facility by the
end of the 2021.
Conference Call
Whiting will host a conference call on Thursday, November 4,
2021 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to
discuss the third quarter 2021 results. The call will be conducted
by President and Chief Executive Officer Lynn A. Peterson,
Executive Vice President Finance and Chief Financial Officer James
P. Henderson, Executive Vice President Operations and Chief
Operating Officer Charles J. Rimer and Investor Relations Manager
Brandon Day. A question and answer session will immediately follow
the discussion of the results for the quarter.
To participate in this call please dial: Domestic Dial-in
Number: (877) 328-5506 International Dial-in Number: (412) 317-5422
Webcast URL:
https://dpregister.com/sreg/10160438/ed94216c08
Replay Information: Conference ID #: 10160438 Replay
Dial-In (Toll Free): (877) 344-7529 (U.S.), (855) 669-9658 (Canada)
Replay Dial-In (International): (412) 317-0088 Expiration Date:
November 11, 2021
Commodity Price Hedging
The Company uses commodity hedges in order to reduce the effects
of commodity price volatility and to satisfy the requirements of
its credit facility. The following table summarizes Whiting’s
hedging positions as of October 31, 2021:
Weighted Average
Settlement Period
Index
Derivative Instrument
Total Volumes
Units
Swap Price
Floor
Ceiling
Crude Oil
2021(1)
NYMEX WTI
Fixed Price Swaps
2,162,000
Bbl
$44.90
-
-
2021(1)
NYMEX WTI
Two-way Collars
1,150,000
Bbl
-
$42.48
$51.80
2022
NYMEX WTI
Fixed Price Swaps
2,275,000
Bbl
$69.29
-
-
2022
NYMEX WTI
Two-way Collars
11,204,000
Bbl
-
$47.07
$57.59
Q1-Q3 2023
NYMEX WTI
Two-way Collars
3,443,500
Bbl
-
$46.75
$58.87
Crude Oil
Differentials
2021(1)
UHC Clearbrook to NYMEX
Fixed Price Swaps
30,500
Bbl
-$1.95
-
-
Natural Gas
2021(1)
NYMEX Henry Hub
Fixed Price Swaps
5,290,000
MMBtu
$3.16
-
-
2021(1)
NYMEX Henry Hub
Two-way Collars
2,760,000
MMBtu
-
$2.60
$2.79
2022
NYMEX Henry Hub
Fixed Price Swaps
8,009,000
MMBtu
$3.24
-
-
2022
NYMEX Henry Hub
Two-way Collars
17,304,000
MMBtu
-
$2.70
$3.32
Q1-Q3 2023
NYMEX Henry Hub
Two-way Collars
6,999,000
MMBtu
-
$2.42
$2.94
Natural Gas Basis
2021(1)
NNG Ventura to NYMEX
Fixed Price Swaps
2,760,000
MMBtu
-$0.07
-
-
Q1-Q2 2022
NNG Ventura to NYMEX
Fixed Price Swaps
6,230,000
MMBtu
$0.51
-
-
Q1-Q2 2023
NNG Ventura to NYMEX
Fixed Price Swaps
4,740,000
MMBtu
$0.20
-
-
NGL - Propane
2021(1)
Mont Belvieu
Fixed Price Swaps
9,660,000
Gallons
$0.78
-
-
2021(1)
Conway
Fixed Price Swaps
7,728,000
Gallons
$1.31
-
-
2022
Mont Belvieu
Fixed Price Swaps
19,110,000
Gallons
$1.08
-
-
2022
Conway
Fixed Price Swaps
19,110,000
Gallons
$1.17
-
-
(1) Includes settlement periods of October through December
2021.
Selected Operating and Financial
Statistics
References to “Successor” refer to Whiting and its financial
position and results of operations after its emergence from
reorganization under chapter 11 of the Bankruptcy Code. References
to “Predecessor” refer to Whiting and its financial position and
results of operations on or before the emergence date (September 1,
2020).
Successor
Three Months Ended
September 30,
June 30,
2021
2021
Selected operating statistics:
Production
Oil (MBbl)
4,763
4,860
NGLs (MBbl)
1,919
1,793
Natural gas (MMcf)
10,745
10,666
Total production (MBOE)
8,472
8,431
Average prices
Oil (per Bbl):
Price received
$
66.54
$
63.46
Effect of crude oil hedging (1)
(16.57
)
(13.64
)
Realized price
$
49.97
$
49.82
Weighted average NYMEX price (per Bbl)
(2)
$
70.55
$
66.03
NGLs (per Bbl):
Price received
$
26.81
$
15.76
Effect of NGL hedging (3)
(1.93
)
(0.47
)
Realized price
$
24.88
$
15.29
Natural gas (per Mcf):
Price received
$
2.42
$
1.25
Effect of natural gas hedging (4)
(0.82
)
(0.04
)
Realized price
$
1.60
$
1.21
Weighted average NYMEX price (per MMBtu)
(2)
$
3.95
$
2.74
Selected operating metrics:
Sales price, net of hedging ($ per
BOE)
$
35.75
$
33.50
Lease operating ($ per BOE)
6.68
7.61
Transportation, gathering, compression and
other ($ per BOE)
1.04
0.88
Depreciation, depletion and amortization
($ per BOE)
6.13
6.12
General and administrative ($ per BOE)
1.41
1.42
Production and ad valorem taxes (% of
sales revenue)
7
%
7
%
(1)
Whiting paid $79 million and $66 million
in pre-tax cash settlements on crude oil hedges during the three
months ended September 30, 2021 and June 30, 2021, respectively.
Refer to “Commodity Price Hedging” above for a summary of Whiting’s
outstanding hedges.
(2)
Average NYMEX prices weighted for monthly
production volumes.
(3)
Whiting paid $4 million and $1 million in
pre-tax cash settlements on NGL hedges during the three months
ended September 30, 2021 and June 30, 2021, respectively. Refer to
“Commodity Price Hedging” above for a summary of Whiting’s
outstanding hedges.
(4)
Whiting paid $9 million and $0.4 million
in pre-tax cash settlements on natural gas hedges during the three
months ended September 30, 2021 and June 30, 2021, respectively.
Refer to “Commodity Price Hedging” above for a summary of Whiting’s
outstanding hedges.
Successor
Predecessor
Non-GAAP
Nine Months Ended September
30, 2021
One Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Selected operating statistics:
Production
Oil (MBbl)
14,445
1,746
15,273
17,020
NGLs (MBbl)
5,272
559
4,522
5,081
Natural gas (MMcf)
31,661
3,631
29,667
33,299
Total production (MBOE)
24,993
2,910
24,740
27,650
Average prices
Oil (per Bbl):
Price received
$
61.06
$
34.58
$
28.86
$
29.45
Effect of crude oil hedging (1)
(12.78
)
0.28
3.00
2.72
Realized price
$
48.28
$
34.86
$
31.86
$
32.17
Weighted average NYMEX price (per Bbl)
(2)
$
64.78
$
39.63
$
38.23
$
38.37
NGLs (per Bbl):
Price received
$
20.23
$
3.19
$
4.45
$
4.31
Effect of NGL hedging (3)
(0.86
)
-
-
-
Realized price
$
19.37
$
3.19
$
4.45
$
4.31
Natural gas (per Mcf):
Price received
$
1.90
$
(0.30
)
$
(0.06
)
$
(0.09
)
Effect of natural gas hedging (4)
(0.28
)
0.15
(0.01
)
0.01
Realized price
$
1.62
$
(0.15
)
$
(0.07
)
$
(0.08
)
Weighted average NYMEX price (per MMBtu)
(2)
$
3.09
$
2.24
$
1.76
$
1.81
Selected operating metrics:
Sales price, net of hedging ($ per
BOE)
$
34.04
$
21.34
$
20.39
$
20.49
Lease operating ($ per BOE)
7.21
6.37
6.40
6.39
Transportation, gathering, compression and
other ($ per BOE)
0.93
0.68
0.90
0.88
Depreciation, depletion and amortization
($ per BOE)
6.29
6.91
13.69
12.98
General and administrative ($ per BOE)
1.37
3.55
3.71
3.69
Production and ad valorem taxes (% of
sales revenue)
7
%
10
%
9
%
9
%
(1)
Whiting paid $185 million and received $46
million in pre-tax cash settlements on crude oil hedges during the
nine months ended September 30, 2021 and September 30, 2020,
respectively. Refer to “Commodity Price Hedging” above for a
summary of Whiting’s outstanding hedges.
(2)
Average NYMEX prices weighted for monthly
production volumes.
(3)
Whiting paid $5 million in pre-tax cash
settlements on NGL hedges during the nine months ended September
30, 2021. Refer to “Commodity Price Hedging” above for a summary of
Whiting’s outstanding hedges.
(4)
Whiting paid $9 million and received $0.3
million in pre-tax cash settlements on natural gas hedges during
the nine months ended September 30, 2021 and September 30, 2020,
respectively. Refer to “Commodity Price Hedging” above for a
summary of Whiting’s outstanding hedges.
Selected Financial Data
For further information and discussion on the selected financial
data below, please refer to Whiting’s Quarterly Report on Form 10‑Q
for the quarter ended September 30, 2021 filed with the Securities
and Exchange Commission.
Successor
Three Months Ended
September 30,
June 30,
2021
2021
Selected financial data:
(In thousands, except per share data)
Total operating revenues
$
401,037
$
351,646
Total operating expenses
199,304
409,431
Total other expense, net
3,571
3,704
Net income (loss)
198,162
(61,489
)
Per basic share
5.07
(1.57
)
Per diluted share
5.00
(1.57
)
Adjusted net income (1)
141,553
117,501
Per basic share
3.62
3.01
Per diluted share
3.57
3.01
Adjusted EBITDAX (1)
201,102
176,351
Net cash provided by operating
activities
189,890
183,246
Adjusted free cash flow (1)
127,742
111,295
Successor
Predecessor
Non-GAAP
Nine Months Ended September
30, 2021
One Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Selected financial data:
(In thousands, except per share data)
Total operating revenues
$
1,060,074
$
61,084
$
459,004
$
520,088
Total operating expenses
914,489
30,877
4,651,298
4,682,175
Total other (income) expense, net
9,858
2,122
(170,459
)
(168,337
)
Net income (loss)
135,727
40,270
(3,965,461
)
(3,925,191
)
Per basic share (2)
3.48
1.06
(43.37
)
(103.16
)
Per diluted share (2)
3.44
1.06
(43.37
)
(103.16
)
Adjusted net income (loss) (1)
366,948
8,250
(209,656
)
(201,406
)
Per basic share (2)
9.42
0.22
(2.29
)
(5.29
)
Per diluted share (2)
9.29
0.22
(2.29
)
(5.29
)
Adjusted EBITDAX (1)
547,669
34,689
227,580
262,269
Net cash provided by operating
activities
526,329
11,640
112,613
124,253
Adjusted free cash flow (1)
347,281
13,155
(132,564
)
(119,409
)
(1)
Reconciliations of net income (loss) to
adjusted net income (loss) and adjusted EBITDAX and net cash
provided by operating activities to adjusted free cash flow are
included later in this news release.
(2)
For the combined nine months ended
September 30, 2020, the Company used the Successor’s basic and
diluted weighted average share count to calculate per share
amounts.
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands, except share
and per share data)
Successor
September 30,
December 31,
2021
2020
ASSETS
Current assets:
Cash, cash equivalents and restricted
cash
$
12,909
$
28,367
Accounts receivable trade, net
217,698
142,830
Prepaid expenses and other
14,325
19,224
Total current assets
244,932
190,421
Property and equipment:
Oil and gas properties, successful efforts
method
2,166,379
1,812,601
Other property and equipment
45,671
74,064
Total property and equipment
2,212,050
1,886,665
Less accumulated depreciation, depletion
and amortization
(203,628
)
(73,869
)
Total property and equipment, net
2,008,422
1,812,796
Other long-term assets
37,883
40,723
TOTAL ASSETS
$
2,291,237
$
2,043,940
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable trade
$
57,518
$
23,697
Revenues and royalties payable
193,474
151,196
Accrued capital expenditures
38,255
20,155
Accrued liabilities and other
35,572
42,007
Accrued lease operating expenses
22,730
23,457
Taxes payable
16,744
11,997
Derivative liabilities
299,602
49,485
Total current liabilities
663,895
321,994
Long-term debt
72,000
360,000
Asset retirement obligations
85,120
91,864
Operating lease obligations
15,550
17,415
Long-term derivative liabilities
83,355
9,750
Other long-term liabilities
2,159
14,113
Total liabilities
922,079
815,136
Commitments and contingencies
Equity:
Successor common stock, $0.001 par value,
500,000,000 shares authorized; 39,127,389 issued and outstanding as
of September 30, 2021 and 38,051,125 issued and outstanding as of
December 31, 2020
39
38
Additional paid-in capital
1,194,319
1,189,693
Accumulated earnings
174,800
39,073
Total equity
1,369,158
1,228,804
TOTAL LIABILITIES AND EQUITY
$
2,291,237
$
2,043,940
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per
share data)
Successor
Three Months Ended
September 30,
June 30,
2021
2021
OPERATING REVENUES
Oil, NGL and natural gas sales
$
394,333
$
349,983
Purchased gas sales
6,704
1,663
Total operating revenues
401,037
351,646
OPERATING EXPENSES
Lease operating expenses
56,562
64,182
Transportation, gathering, compression and
other
8,835
7,443
Purchased gas expense
5,496
1,178
Production and ad valorem taxes
28,712
25,669
Depreciation, depletion and
amortization
51,927
51,618
Exploration and impairment
3,446
2,047
General and administrative
11,961
11,995
Derivative loss, net
122,559
255,409
Gain on sale of properties
(90,194
)
(10,110
)
Total operating expenses
199,304
409,431
INCOME (LOSS) FROM OPERATIONS
201,733
(57,785
)
OTHER INCOME (EXPENSE)
Interest expense
(3,871
)
(3,981
)
Other income
300
277
Total other expense
(3,571
)
(3,704
)
NET INCOME (LOSS)
$
198,162
$
(61,489
)
INCOME (LOSS) PER COMMON SHARE
Basic
$
5.07
$
(1.57
)
Diluted
$
5.00
$
(1.57
)
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
39,121
39,067
Diluted
39,622
39,067
WHITING PETROLEUM
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per
share data)
Successor
Predecessor
Non-GAAP
Nine Months Ended September
30, 2021
One Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
OPERATING REVENUES
Oil, NGL and natural gas sales
$
1,048,995
$
61,084
$
459,004
$
520,088
Purchased gas sales
11,079
-
-
-
Total operating revenues
1,060,074
61,084
459,004
520,088
OPERATING EXPENSES
Lease operating expenses
180,083
18,526
158,228
176,754
Transportation, gathering, compression and
other
23,306
1,980
22,266
24,246
Purchased gas expense
8,576
-
-
-
Production and ad valorem taxes
78,531
5,908
41,204
47,112
Depreciation, depletion and
amortization
157,274
20,110
338,757
358,867
Exploration and impairment
8,115
4,207
4,184,830
4,189,037
General and administrative
34,247
10,345
91,816
102,161
Derivative (gain) loss, net
524,661
(30,594
)
(181,614
)
(212,208
)
(Gain) loss on sale of properties
(100,304
)
395
927
1,322
Amortization of deferred gain on sale
-
-
(5,116
)
(5,116
)
Total operating expenses
914,489
30,877
4,651,298
4,682,175
INCOME (LOSS) FROM OPERATIONS
145,585
30,207
(4,192,294
)
(4,162,087
)
OTHER INCOME (EXPENSE)
Interest expense
(12,955
)
(2,128
)
(73,054
)
(75,182
)
Gain on extinguishment of debt
-
-
25,883
25,883
Interest income and other
3,097
6
211
217
Reorganization items, net
-
-
217,419
217,419
Total other income (expense)
(9,858
)
(2,122
)
170,459
168,337
INCOME (LOSS) BEFORE INCOME
TAXES
135,727
28,085
(4,021,835
)
(3,993,750
)
INCOME TAX EXPENSE (BENEFIT)
Current
-
2,316
2,718
5,034
Deferred
-
(14,501
)
(59,092
)
(73,593
)
Total income tax benefit
-
(12,185
)
(56,374
)
(68,559
)
NET INCOME (LOSS)
$
135,727
$
40,270
$
(3,965,461
)
$
(3,925,191
)
INCOME (LOSS) PER COMMON SHARE
Basic (1)
$
3.48
$
1.06
$
(43.37
)
$
(103.16
)
Diluted (1)
$
3.44
$
1.06
$
(43.37
)
$
(103.16
)
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic (1)
38,963
38,051
91,423
38,051
Diluted (1)
39,479
38,051
91,423
38,051
(1) For the combined nine months ended September 30, 2020, the
Company used the Successor’s basic and diluted weighted average
share count to calculate per share amounts.
Non-GAAP Financial
Measures
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted Net Income
(in thousands, except per
share data)
Successor
Three Months Ended
September 30,
June 30,
2021
2021
Net income (loss)
$
198,162
$
(61,489
)
Adjustments:
Gain on sale of properties
(90,194
)
(10,110
)
Impairment expense
2,439
1,250
Total measure of derivative loss reported
under U.S. GAAP
122,559
255,409
Total net cash settlements paid on
commodity derivatives during the period
(91,413
)
(67,559
)
Adjusted net income (1)
$
141,553
$
117,501
Adjusted net income per share, basic
(1)
$
3.62
$
3.01
Adjusted net income per share, diluted
(1)
$
3.57
$
3.01
(1)
Adjusted net income and adjusted net
income per share are non-GAAP measures. Management believes they
provide useful information to investors for analysis of Whiting’s
fundamental business on a recurring basis. In addition, management
believes that adjusted net income is widely used by professional
research analysts and others in valuation, comparison and
investment recommendations of companies in the oil and gas
exploration and production industry, and many investors use the
published research of industry research analysts in making
investment decisions. Adjusted net income and adjusted net income
per share should not be considered in isolation or as a substitute
for net income, income from operations, net cash provided by
operating activities or other income, cash flow or liquidity
measures under U.S. GAAP and may not be comparable to other
similarly titled measures of other companies.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted Net Income (Loss)
(in thousands, except per
share data)
Successor
Predecessor
Non-GAAP
Nine Months Ended September
30, 2021
One Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Net income (loss)
$
135,727
$
40,270
$
(3,965,461
)
$
(3,925,191
)
Adjustments:
Amortization of deferred gain on sale
-
-
(5,116
)
(5,116
)
(Gain) loss on sale of properties
(100,304
)
395
927
1,322
Impairment expense
5,130
-
4,161,885
4,161,885
Gain on extinguishment of debt
-
-
(25,883
)
(25,883
)
Total measure of derivative (gain) loss
reported under U.S. GAAP
524,661
(30,594
)
(181,614
)
(212,208
)
Total net cash settlements received (paid)
on commodity derivatives during the period
(198,266
)
1,031
45,483
46,514
Reorganization items, net
-
-
(217,419
)
(217,419
)
Restructuring and other one-time costs
(1)
-
9,333
32,888
42,221
Tax impact of basis difference for Whiting
Canadian Holding Company ULC
-
(12,185
)
(55,346
)
(67,531
)
Adjusted net income (loss) (2)
$
366,948
$
8,250
$
(209,656
)
$
(201,406
)
Adjusted net income (loss) per share,
basic (2)(3)
$
9.42
$
0.22
$
(2.29
)
$
(5.29
)
Adjusted net income (loss) per share,
diluted (2)(3)
$
9.29
$
0.22
$
(2.29
)
$
(5.29
)
(1)
Includes severance and restructuring
charges incurred during a company restructuring in September 2020,
cash retention incentives paid to Predecessor executives and
directors in 2020, third-party advisory and legal fees incurred
prior to and after emerging from chapter 11 bankruptcy and a
litigation settlement.
(2)
Adjusted net income (loss) and adjusted
net income (loss) per share are non-GAAP measures. Management
believes they provide useful information to investors for analysis
of Whiting’s fundamental business on a recurring basis. In
addition, management believes that adjusted net income (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) and
adjusted net income (loss) per share should not be considered in
isolation or as a substitute for net income, income from
operations, net cash provided by operating activities or other
income, cash flow or liquidity measures under U.S. GAAP and may not
be comparable to other similarly titled measures of other
companies.
(3)
For the combined nine months ended
September 30, 2020, the Company used the Successor’s basic and
diluted weighted average share count to calculate per share
amounts.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted EBITDA and Adjusted EBITDAX
(in thousands)
Successor
Three Months Ended
September 30,
June 30,
2021
2021
Net income (loss)
$
198,162
$
(61,489
)
Interest expense
3,871
3,981
Interest income
-
(1
)
Depreciation, depletion and
amortization
51,927
51,618
Total measure of derivative loss reported
under U.S. GAAP
122,559
255,409
Total cash settlements (paid) on commodity
derivatives during the period
(91,413
)
(67,559
)
Non-cash stock-based compensation
2,744
2,455
Impairment expense
2,439
1,250
(Gain) on sale of properties
(90,194
)
(10,110
)
Adjusted EBITDA (1)
200,095
175,554
Exploration expense
1,007
797
Adjusted EBITDAX (1)
$
201,102
$
176,351
(1)
Adjusted EBITDA and Adjusted EBITDAX are
non-GAAP measures. These measures are presented because management
believes they provide useful information to investors for analysis
of the Company’s performance. Adjusted EBITDA and Adjusted EBITDAX
should not be considered in isolation or as a substitute for net
income, income from operations, net cash provided by operating
activities or other income, cash flow or liquidity measures under
U.S. GAAP and may not be comparable to other similarly titled
measures of other companies.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Income
(Loss) to Adjusted EBITDA and Adjusted EBITDAX
(in thousands)
Successor
Predecessor
Non-GAAP
Nine Months Ended September
30, 2021
One Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Combined Nine Months Ended
September 30, 2020
Net income (loss)
$
135,727
$
40,270
$
(3,965,461
)
$
(3,925,191
)
Interest expense
12,955
2,128
73,054
75,182
Interest income
(1
)
(6
)
(211
)
(217
)
Income tax benefit
-
(12,185
)
(56,374
)
(68,559
)
Depreciation, depletion and
amortization
157,274
20,110
338,757
358,867
Amortization of deferred gain on sale
-
-
(5,116
)
(5,116
)
Total measure of derivative (gain) loss
reported under U.S. GAAP
524,661
(30,594
)
(181,614
)
(212,208
)
Total cash settlements received (paid) on
commodity derivatives during the period, net of premiums/costs
(198,266
)
1,031
45,483
46,514
Non-cash stock-based compensation
7,508
-
3,719
3,719
Impairment expense
5,130
-
4,161,885
4,161,885
Gain on extinguishment of debt
-
-
(25,883
)
(25,883
)
(Gain) loss on sale of properties
(100,304
)
395
927
1,322
Reorganization items, net
-
-
(217,419
)
(217,419
)
Restructuring and other one-time costs
(1)
-
9,333
32,888
42,221
Adjusted EBITDA (2)
544,684
30,482
204,635
235,117
Exploration expense
2,985
4,207
22,945
27,152
Adjusted EBITDAX (2)
$
547,669
$
34,689
$
227,580
$
262,269
(1)
Includes severance and restructuring
charges incurred during a company restructuring in September 2020,
cash retention incentives paid to Predecessor executives and
directors in 2020, third-party advisory and legal fees incurred
prior to and after emerging from chapter 11 bankruptcy and a
litigation settlement.
(2)
Adjusted EBITDA and Adjusted EBITDAX are
non-GAAP measures. These measures are presented because management
believes they provide useful information to investors for analysis
of the Company’s performance. Adjusted EBITDA and Adjusted EBITDAX
should not be considered in isolation or as a substitute for net
income, income from operations, net cash provided by operating
activities or other income, cash flow or liquidity measures under
U.S. GAAP and may not be comparable to other similarly titled
measures of other companies.
WHITING PETROLEUM
CORPORATION
Reconciliation of Net Cash
Provided by Operating Activities to Adjusted Free Cash Flow
(in thousands)
Successor
Three Months Ended
September 30,
June 30,
2021
2021
Net cash provided by operating
activities
$
189,890
$
183,246
Changes in working capital
4,788
(13,483
)
Accrued capital expenditures
(66,936
)
(58,468
)
Adjusted free cash flow (1)
$
127,742
$
111,295
Successor
Predecessor
Non-GAAP
Nine Months Ended September
30, 2021
One Month Ended September 30,
2020
Eight Months Ended August 31,
2020
Nine Months Ended September
30, 2020
Net cash provided by operating
activities
$
526,329
$
11,640
112,613
124,253
Changes in working capital
1,958
5,004
(59,815
)
(54,811
)
Accrued capital expenditures
(181,006
)
(3,489
)
(185,362
)
(188,851
)
Adjusted free cash flow (1)
$
347,281
$
13,155
$
(132,564
)
$
(119,409
)
(1)
Adjusted free cash flow is a non-GAAP
measure. This measure is presented because management believes it
provides useful information to investors for analysis of the
Company’s ability to internally fund acquisitions and development
activity and reduce its borrowings outstanding under its revolving
credit facility. This measure should not be considered in isolation
or as a substitute for net income, income from operations, net cash
provided by operating activities or other income, cash flow or
liquidity measures under U.S. GAAP and may not be comparable to
other similarly titled measures of other companies. The Company is
unable to present a reconciliation of forward-looking adjusted free
cash flow because components of the calculation, including
fluctuations in working capital accounts, are inherently
unpredictable. Moreover, estimating the most directly comparable
GAAP measure with the required precision necessary to provide a
meaningful reconciliation is extremely difficult and could not be
accomplished without unreasonable effort. The Company believes that
forward-looking estimates of adjusted free cash flow are important
to investors because they assist in the analysis of its ability to
generate cash from our operations.
About Whiting Petroleum
Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an
independent oil and gas company engaged in the development,
production and acquisition of crude oil, NGLs and natural gas
primarily in the Rocky Mountains region of the United States. The
Company’s largest projects are in the Bakken and Three Forks plays
in North Dakota and Montana. The Company trades publicly under the
symbol WLL on the New York Stock Exchange. For further information,
please visit http://www.whiting.com.
Forward-Looking
Statements
This news release contains statements that we believe to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than historical facts,
including, without limitation, statements regarding our future
financial position, business strategy, projected production, cash
flows, revenues, costs, capital expenditures and debt levels, the
effect of acquisitions and divestitures and plans and objectives of
management for future operations, are forward-looking statements.
When used in this news release, words such as “guidance,” or
“expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or
“should” or the negative thereof or variations thereon or similar
terminology are generally intended to identify forward-looking
statements. Such forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ
materially from those expressed in, or implied by, such
statements.
These risks and uncertainties include, but are not limited to,
risks associated with:
- declines in, or extended periods of low oil, NGL or natural gas
prices;
- the occurrence of epidemic or pandemic diseases, including the
coronavirus pandemic;
- actions of the Organization of Petroleum Exporting Countries
and other oil exporting nations to set and maintain production
levels;
- the impacts of hedging on our results of operations;
- regulatory developments, including the potential shutdown of
the Dakota Access Pipeline and new or amended federal, state and
local initiatives relating to the regulation of hydraulic
fracturing, air emissions and other aspects of oil and gas
operations that could have a negative effect on the oil and gas
industry and/or increase costs of compliance;
- the geographic concentration of our operations;
- our inability to access oil and gas markets due to market
conditions or operational impediments;
- adequacy of midstream and downstream transportation capacity
and infrastructure;
- shortages of or delays in obtaining qualified personnel or
equipment, including drilling rigs and completion services;
- adverse weather conditions that may negatively impact
development or production activities;
- potential losses and claims resulting from our oil and gas
operations, including uninsured or underinsured losses;
- lack of control over non-operated properties;
- cybersecurity attacks or failures of our telecommunication and
other information technology infrastructure;
- revisions to reserve estimates as a result of changes in
commodity prices, regulation and other factors;
- inaccuracies of our reserve estimates or our assumptions
underlying them;
- impact of negative shifts in investor sentiment and public
perception towards the oil and gas industry and corporate
governance standards;
- climate change issues;
- litigation and other legal proceedings; and
- other risks described under the caption “Risk Factors” in Item
1A of our Annual Report on Form 10-K for the period ended December
31, 2020.
We assume no obligation, and disclaim any duty, to update the
forward-looking statements in this news release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103006157/en/
Company Contact: Brandon Day Title: Investor Relations Manager
Phone: 303‑837‑1661 Email: Brandond@whiting.com
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