Attached files
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| 8-K - WHITING PETROLEUM FORM 8-K, DATED JULY 27, 2016 - WHITING PETROLEUM CORP | form8-k.htm |
| Company Contact: Eric K. Hagen | July 27, 2016 |
| Title: Vice President, Investor Relations | For immediate release |
| Phone: 303.837.1661 | |
| Email: Eric.Hagen@whiting.com |
Whiting Petroleum Corporation Announces Second Quarter 2016 Financial and Operating Results
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·
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Q2 2016 Capex on Budget at $79.4 Million
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·
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Q2 2016 Production Averaged 134,245 BOE/d
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·
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YTD Exchanged $1.6 Billion of Notes for New Convertible Notes
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·
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Closed the Sale of North Ward Estes Properties on July 27th for $300 Million and Potential $100 Million Contingency Payment
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·
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Williston Basin Enhanced Completions Tracking 900 MBOE Type Curve
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·
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Adding 16 Williston Basin Completions in Second Half of 2016
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DENVER – July 27, 2016 – Whiting’s (NYSE: WLL) 2016 second quarter capex of $79.4 million was on budget and a 70% improvement from the first quarter. Production in the second quarter 2016 totaled 12.2 million barrels of oil equivalent (MMBOE), an average of 134,245 barrels of oil equivalent per day (BOE/d), which was comprised of 85% crude oil/natural gas liquids (NGLs). In late June, the company recommenced operations in the Williston Basin in connection with the 44-well participation agreement announced in its first quarter results press release.
Whiting has entered into a new 30-well participation agreement in its Pronghorn area of the Williston Basin on terms similar to its other participation agreement. The company plans to add a rig in October to begin drilling this program. In addition to the new 30-well program, with stronger commodity prices and higher cash flow, the company plans to increase activity in the second half of the year and complete 16 gross (12.5 net) drilled uncompleted (DUC) wells in the Williston Basin. The new participation agreement and addition of these DUC wells increase 2016 capex by $50 million and should lead to a highly capital efficient production profile in 2017. All of the new combined operational activity should help stabilize production in the last quarter of the year and give positive momentum entering 2017.
James J. Volker, Whiting’s Chairman, President and CEO, commented, “During the second quarter, we continued to strengthen our balance sheet. We exchanged an additional $1.1 billion of debt into mandatory convertible debt, bringing our total to $1.6 billion year-to-date. These debt exchanges have effectively reduced Whiting’s debt by $810 million as of July 27, 2016 by conversion into stock. In addition, as detailed below we sold the North Ward Estes property for $300 million and a potential contingency payment of $100 million. This transaction allows us to reduce our leverage and thereby strengthen our balance sheet while maintaining our strategic focus on our core properties located in the Williston Basin in North Dakota and Denver Julesburg Basin in Colorado.”
Operating and Financial Results
The following table summarizes the operating and financial results for the second quarter of 2016 and 2015, including non-cash charges recorded during those periods:
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Three Months Ended
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June 30,
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2016
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2015
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|||||||
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Production (MBOE/d) (1)
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134.24 | 170.24 | ||||||
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Net cash provided by operating activities-MM
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$ | 161.0 | $ | 326.0 | ||||
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Discretionary cash flow-MM (2)
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$ | 151.6 | $ | 380.7 | ||||
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Realized price ($/BOE)
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$ | 30.39 | $ | 44.65 | ||||
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Total revenues-MM
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$ | 339.6 | $ | 590.0 | ||||
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Net loss available to common shareholders-MM (3)(4)
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$ | (301.0 | ) | $ | (149.3 | ) | ||
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Per basic share
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$ | (1.33 | ) | $ | (0.73 | ) | ||
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Per diluted share
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$ | (1.33 | ) | $ | (0.73 | ) | ||
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Adjusted net income (loss) available to common shareholders-MM (5)
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$ | (158.7 | ) | $ | 9.2 | |||
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Per basic share
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$ | (0.70 | ) | $ | 0.04 | |||
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Per diluted share
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$ | (0.70 | ) | $ | 0.04 | |||
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(1)
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Second quarter 2015 includes 8,740 BOE/d that was divested during the year.
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(2)
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A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.
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(3)
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For the three months ended June 30, 2016, net loss available to common shareholders included $31 million of pre-tax, non-cash derivative losses or $0.09 per basic and diluted share after tax. For the three months ended June 30, 2015, net loss available to common shareholders included $144 million of pre-tax, non-cash derivative losses or $0.44 per basic and diluted share after tax.
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(4)
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For the three months ended June 30, 2016, net loss available to common shareholders included a $179 million pre-tax, non-cash loss on extinguishment of debt, or $0.50 per basic and diluted share after tax.
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(5)
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A reconciliation of net loss available to common shareholders to adjusted net income (loss) available to common shareholders is included later in this news release.
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2
The following table summarizes the first six months operating and financial results for 2016 and 2015:
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Six Months Ended
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June 30,
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2016
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2015
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Production (MBOE/d) (1)
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140.51 | 168.60 | ||||||
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Net cash provided by operating activities-MM
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$ | 206.9 | $ | 528.1 | ||||
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Discretionary cash flow-MM (2)
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$ | 253.9 | $ | 629.9 | ||||
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Realized price ($/BOE)
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$ | 28.00 | $ | 41.36 | ||||
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Total revenues-MM
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$ | 631.6 | $ | 1,119.2 | ||||
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Net loss available to common shareholders-MM (3)(4)
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$ | (472.8 | ) | $ | (255.4 | ) | ||
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Per basic share
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$ | (2.20 | ) | $ | (1.37 | ) | ||
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Per diluted share
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$ | (2.20 | ) | $ | (1.37 | ) | ||
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Adjusted net loss available to common shareholders-MM (5)
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$ | (333.0 | ) | $ | (29.9 | ) | ||
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Per basic share
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$ | (1.55 | ) | $ | (0.16 | ) | ||
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Per diluted share
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$ | (1.55 | ) | $ | (0.16 | ) | ||
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(1)
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The six months ended June 30, 2015 includes 10,570 BOE/d that was divested during the year.
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(2)
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A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.
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(3)
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For the six months ended June 30, 2016, net loss available to common shareholders included $91 million of pre-tax, non-cash derivative losses or $0.27 per basic and diluted share after tax. For the six months ended June 30, 2015, net loss available to common shareholders included $184 million of pre-tax, non-cash derivative losses or $0.62 per basic and diluted share after tax.
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(4)
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For the six months ended June 30, 2016, net loss available to common shareholders included a $89 million pre-tax, non-cash loss on extinguishment of debt, or $0.26 per basic and diluted share after tax.
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(5)
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A reconciliation of net loss available to common shareholders to adjusted net income (loss) available to common shareholders is included later in this news release.
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3
Sale of North Ward Estes for $300 Million and Potential $100 Million Contingency Payment
On July 27, Whiting closed the sale of its North Ward Estes field and associated assets located in Ward and Winkler Counties, Texas to a third party. The cash purchase price was $300 million, subject to certain closing and post-closing adjustments. In addition to the cash purchase price, the buyer will pay Whiting $100,000 for every one cent ($0.01) the average of the NYMEX WTI crude oil futures contract price for the period of August 2018 through July 2021 is above $50.00 on June 28, 2018, up to a maximum amount of $100 million (“Oil Price Payment”). The potential Oil Price Payment will be made at the option of the buyer either in cash on July 31, 2018 or in the form of a secured promissory note accruing interest at 8% per annum with a maturity of July 29, 2022. The effective date of the sale is July 1, 2016. Whiting will operate the properties under a transition services agreement for three months after the closing date of July 27, 2016.
Whiting estimates the properties subject to the sale consist of net daily production of approximately 8.6 MBOE/d or 6.4% of its June 2016 production. This equates to a net cash price of approximately $34,900 per BOE/d. Whiting used the net proceeds from the sale to repay a portion of the debt outstanding under its credit agreement.
Operations Update
Whiting controls 746,338 gross (444,214 net) acres in the Williston Basin and 154,018 gross (129,076 net) acres at its Redtail Niobrara play. In the second quarter 2016, total net production for the Company averaged 134,245 BOE/d. The Bakken/Three Forks play in the Williston Basin averaged 114,435 BOE/d and the Redtail Niobrara play in the DJ Basin averaged 10,150 BOE/d.
Enhanced completion wells tracking 900 MBOE type curve. Since January 2015, Whiting has completed 48 enhanced completion wells in the Williston Basin that have at least 200 days on production. These wells span Whiting’s acreage and are located in Billings, Dunn, McKenzie, Mountrail, Stark and Williams counties, North Dakota. On average, these wells were completed with 36 stages and 6.6 million pounds of sand. Currently, Whiting is testing large volume completions at two pads in Williams County, North Dakota. At the Carscallen pad, one of four wells will be completed with 13.6 million pounds of sand and at the P Bibler pad, one of three wells will be completed with 10.1 million pounds of sand.
Gas capture rate in Williston Basin 94%, nearing 100% in DJ Niobrara Redtail field. Whiting has continued to improve its gas capture rates in both basins. Its gas capture rate in the Williston Basin averaged 94% during the second quarter, 14% better than North Dakota requirements and a 5% increase from the first quarter. At its Redtail field, Whiting’s gas capture rate is currently 98%.
4
Other Financial and Operating Results
The following table summarizes the Company’s net production and commodity price realizations for the quarters ended June 30, 2016 and 2015:
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Three Months Ended
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June 30,
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2016
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2015
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Change
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Production
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Oil (MMBbl)
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8.72 | 12.43 | (30 | %) | |||||||
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NGLs (MMBbl)
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1.69 | 1.30 | 30 | % | |||||||
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Natural gas (Bcf)
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10.81 | 10.61 | 2 | % | |||||||
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Total equivalent (MMBOE)
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12.22 | 15.49 | (21 | %) | |||||||
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Average sales price
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Oil (per Bbl):
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Price received
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$ | 35.67 | $ | 48.95 | (27 | %) | |||||
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Effect of crude oil hedging (1)
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3.93 | 3.32 | |||||||||
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Realized price
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$ | 39.60 | $ | 52.27 | (24 | %) | |||||
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Weighted average NYMEX price (per Bbl) (2)
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$ | 45.57 | $ | 57.95 | (21 | %) | |||||
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NGLs (per Bbl):
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Realized price
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$ | 9.17 | $ | 16.86 | (46 | %) | |||||
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Natural gas (per Mcf):
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Realized price
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$ | 0.96 | $ | 1.92 | (50 | %) | |||||
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Weighted average NYMEX price (per Mcf) (2)
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$ | 1.98 | $ | 2.61 | (24 | %) | |||||
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(1)
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Whiting received $34 million and $41 million in pre-tax cash settlements on its crude oil hedges during the second quarter of 2016 and 2015, respectively. A summary of Whiting’s outstanding hedges is included later in this news release.
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(2)
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Average NYMEX prices weighted for monthly production volumes.
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Second Quarter and First Half 2016 Costs and Margins
A summary of production, cash revenues and cash costs on a per BOE basis is as follows:
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2016
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2015
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2016
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2015
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(per BOE, except production)
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Production (MMBOE)
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12.22 | 15.49 | 25.57 | 30.52 | ||||||||||||
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Sales price, net of hedging
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$ | 30.39 | $ | 44.65 | $ | 28.00 | $ | 41.36 | ||||||||
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Lease operating expense
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8.61 | 9.25 | 8.59 | 10.15 | ||||||||||||
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Production tax
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2.20 | 3.66 | 2.06 | 3.31 | ||||||||||||
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Cash general & administrative
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2.21 | 2.46 | 2.55 | 2.47 | ||||||||||||
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Exploration
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0.85 | 2.09 | 1.21 | 2.85 | ||||||||||||
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Cash interest expense
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5.00 | 4.61 | 4.76 | 4.71 | ||||||||||||
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Cash income tax benefit
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- | (0.01 | ) | - | - | |||||||||||
| $ | 11.52 | $ | 22.59 | $ | 8.83 | $ | 17.87 | |||||||||
5
Second Quarter and First Half 2016 Drilling and Expenditures Summary
The table below summarizes Whiting’s operated and non-operated drilling activity and capital expenditures for the three and six months ended June 30, 2016.
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Gross/Net Wells Completed
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Total New
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% Success
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CAPEX
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Producing
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Non-Producing
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Drilling
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Rate
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(in MM)
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| Q2 16 | 23 / 19.3 | 0 / 0 | 23 / 19.3 | 100% / 100% | $ 79.4 (1) | ||||||
| 6M 16 | 42 / 28.3 | 0 / 0 | 42 / 28.3 | 100% / 100% | $ 346.7 (2) | ||||||
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(1)
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Includes $0 million for non-operated drilling and completion, $6 million for facilities, $2 million in drilling rig early termination fees, and $1 million for land.
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(2)
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Includes $34 million for non-operated drilling and completion, $16 million in drilling rig early termination fees, $12 million for facilities and $2 million for land.
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Outlook for Third Quarter and Full-Year 2016
The following table provides guidance for the third quarter and full-year 2016 based on current forecasts, including Whiting’s full-year 2016 capital budget of $550 million.
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Guidance
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Third Quarter
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Full Year
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2016
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2016
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Production (MMBOE)
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10.5 - 11.1
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46.5 - 47.3
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Lease operating expense per BOE
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$ 8.40 - $ 9.00
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$ 8.30 - $ 8.80
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General and administrative expense per BOE
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$ 2.75 - $ 3.25
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$ 2.75 - $ 3.25
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Interest expense per BOE (1)
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$ 6.00 - $ 6.60
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$ 6.00 - $ 6.60
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Depreciation, depletion and amortization per BOE
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$ 24.50 - $ 25.50
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$ 24.40 - $ 25.00
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Production taxes (% of sales revenue)
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8.75% - 9.25%
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8.50%- 9.00%
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Oil price differentials to NYMEX per Bbl (2)
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($ 8.00) - ($ 9.00)
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($ 8.50) - ($ 9.00)
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Gas price differential to NYMEX per Mcf
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($ 0.70) - ($ 1.20)
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($ 0.70) - ($ 1.20)
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(1)
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Includes non-cash interest expense related to Whiting’s 2018, 2019, 2020, 2021 and 2023 convertible notes. Full-year 2016 cash interest expense is projected at $5.00 – $5.50 per BOE.
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(2)
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Does not include the effect of NGLs.
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6
Commodity Derivative Contracts
Whiting is 58% hedged for the remainder of 2016 and 26% hedged for 2017 as a percentage of June 2016 production.
The following summarizes Whiting’s crude oil hedges as of July 1, 2016:
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Weighted Average
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As a Percentage of
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Derivative
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Hedge
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Contracted Crude
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NYMEX Price
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June 2016
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Instrument
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Period
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(Bbls per Month)
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(per Bbl)
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Oil Production
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|||||
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Three-way collars (1)
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2016
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||||||||
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Q3
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1,400,000
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$43.75 - $53.75 - $74.40
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48.9%
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||||||
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Q4
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1,400,000
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$43.75 - $53.75 - $74.40
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48.9%
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2017
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Q1
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500,000
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$33.00 - $43.50 - $61.75
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17.5%
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Q2
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500,000
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$33.00 - $43.50 - $61.75
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17.5%
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Q3
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500,000
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$33.00 - $43.50 - $61.75
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17.5%
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Q4
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500,000
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$33.00 - $43.50 - $61.75
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17.5%
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Collars
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2016
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Q3
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250,000
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$51.00 - $63.48
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8.7%
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||||||
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Q4
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250,000
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$51.00 - $63.48
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8.7%
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||||||
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2017
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|||||||||
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Q1
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250,000
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$53.00 - $70.44
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8.7%
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||||||
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Q2
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250,000
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$53.00 - $70.44
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8.7%
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||||||
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Q3
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250,000
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$53.00 - $70.44
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8.7%
|
||||||
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Q4
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250,000
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$53.00 - $70.44
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8.7%
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(1)
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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.
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7
Selected Operating and Financial Statistics
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2016
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2015
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2016
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2015
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Selected operating statistics:
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Production
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||||||||||||||||
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Oil, MBbl
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8,722 | 12,425 | 18,684 | 24,606 | ||||||||||||
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NGLs, MBbl
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1,692 | 1,298 | 3,334 | 2,412 | ||||||||||||
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Natural gas, MMcf
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10,813 | 10,615 | 21,327 | 20,988 | ||||||||||||
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Oil equivalents, MBOE
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12,216 | 15,492 | 25,572 | 30,516 | ||||||||||||
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Average prices
|
||||||||||||||||
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Oil per Bbl (excludes hedging)
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$ | 35.67 | $ | 48.95 | $ | 31.09 | $ | 44.15 | ||||||||
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NGLs per Bbl
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$ | 9.17 | $ | 16.86 | $ | 7.35 | $ | 15.13 | ||||||||
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Natural gas per Mcf
|
$ | 0.96 | $ | 1.92 | $ | 1.00 | $ | 2.26 | ||||||||
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Per BOE data
|
||||||||||||||||
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Sales price (including hedging)
|
$ | 30.39 | $ | 44.65 | $ | 28.00 | $ | 41.36 | ||||||||
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Lease operating
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$ | 8.61 | $ | 9.25 | $ | 8.59 | $ | 10.15 | ||||||||
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Production taxes
|
$ | 2.20 | $ | 3.66 | $ | 2.06 | $ | 3.31 | ||||||||
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Depreciation, depletion and amortization
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$ | 24.89 | $ | 20.81 | $ | 24.10 | $ | 19.86 | ||||||||
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General and administrative
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$ | 2.74 | $ | 2.90 | $ | 3.06 | $ | 2.92 | ||||||||
|
Selected financial data:
(In thousands, except per share data)
|
||||||||||||||||
|
Total revenues and other income
|
$ | 339,583 | $ | 590,009 | $ | 631,590 | $ | 1,119,241 | ||||||||
|
Total costs and expenses
|
$ | 750,613 | $ | 816,699 | $ | 1,279,544 | $ | 1,505,860 | ||||||||
|
Loss available to common shareholders
|
$ | (301,041 | ) | $ | (149,274 | ) | $ | (472,789 | ) | $ | (255,385 | ) | ||||
|
Loss per common share, basic
|
$ | (1.33 | ) | $ | (0.73 | ) | $ | (2.20 | ) | $ | (1.37 | ) | ||||
|
Loss per common share, diluted
|
$ | (1.33 | ) | $ | (0.73 | ) | $ | (2.20 | ) | $ | (1.37 | ) | ||||
|
Weighted average shares outstanding, basic
|
226,039 | 204,130 | 215,203 | 186,657 | ||||||||||||
|
Weighted average shares outstanding, diluted
|
226,039 | 204,130 | 215,203 | 186,657 | ||||||||||||
|
Net cash provided by operating activities
|
$ | 160,986 | $ | 325,997 | $ | 206,934 | $ | 528,136 | ||||||||
|
Net cash used in investing activities
|
$ | (96,698 | ) | $ | (423,287 | ) | $ | (356,961 | ) | $ | (1,444,897 | ) | ||||
|
Net cash provided by (used in) financing activities
|
$ | (50,011 | ) | $ | 51,529 | $ | 149,312 | $ | 898,815 | |||||||
8
Selected Financial Data
For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, to be filed with the Securities and Exchange Commission.
WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
|
June 30,
|
December 31,
|
|||||||
|
2016
|
2015
|
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ASSETS
|
||||||||
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Current assets:
|
||||||||
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Cash and cash equivalents
|
$ | 15,338 | $ | 16,053 | ||||
|
Accounts receivable trade, net
|
233,059 | 332,428 | ||||||
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Derivative assets
|
49,202 | 158,729 | ||||||
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Prepaid expenses and other
|
21,927 | 27,980 | ||||||
|
Total current assets
|
319,526 | 535,190 | ||||||
|
Property and equipment:
|
||||||||
|
Oil and gas properties, successful efforts method
|
14,179,923 | 13,904,525 | ||||||
|
Other property and equipment
|
159,855 | 168,277 | ||||||
|
Total property and equipment
|
14,339,778 | 14,072,802 | ||||||
|
Less accumulated depreciation, depletion and amortization
|
(3,925,700 | ) | (3,323,102 | ) | ||||
|
Total property and equipment, net
|
10,414,078 | 10,749,700 | ||||||
|
Other long-term assets
|
72,102 | 104,195 | ||||||
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TOTAL ASSETS
|
$ | 10,805,706 | $ | 11,389,085 | ||||
9
WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share and per share data)
|
June 30,
|
December 31,
|
|||||||
|
2016
|
2015
|
|||||||
|
LIABILITIES AND EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable trade
|
$ | 36,621 | $ | 77,276 | ||||
|
Revenues and royalties payable
|
129,087 | 179,601 | ||||||
|
Accrued capital expenditures
|
48,100 | 94,105 | ||||||
|
Accrued interest
|
54,402 | 62,661 | ||||||
|
Accrued lease operating expenses
|
40,137 | 55,291 | ||||||
|
Accrued liabilities and other
|
55,457 | 50,261 | ||||||
|
Taxes payable
|
47,102 | 47,789 | ||||||
|
Accrued employee compensation and benefits
|
16,473 | 32,829 | ||||||
|
Total current liabilities
|
427,379 | 599,813 | ||||||
|
Long-term debt
|
4,960,921 | 5,197,704 | ||||||
|
Deferred income taxes
|
408,213 | 593,792 | ||||||
|
Asset retirement obligations
|
163,365 | 155,550 | ||||||
|
Deferred gain on sale
|
41,490 | 48,974 | ||||||
|
Other long-term liabilities
|
39,387 | 34,664 | ||||||
|
Total liabilities
|
6,040,755 | 6,630,497 | ||||||
|
Commitments and contingencies
|
||||||||
|
Equity:
|
||||||||
|
Common stock, $0.001 par value, 600,000,000 shares authorized; 251,610,527 issued and 246,263,027 outstanding as of June 30, 2016 and 206,441,303 issued and 204,147,647 outstanding as of December 31, 2015
|
252 | 206 | ||||||
|
Additional paid-in capital
|
5,138,989 | 4,659,868 | ||||||
|
Retained earnings (accumulated deficit)
|
(382,259 | ) | 90,530 | |||||
|
Total Whiting shareholders' equity
|
4,756,982 | 4,750,604 | ||||||
|
Noncontrolling interest
|
7,969 | 7,984 | ||||||
|
Total equity
|
4,764,951 | 4,758,588 | ||||||
|
TOTAL LIABILITIES AND EQUITY
|
$ | 10,805,706 | $ | 11,389,085 | ||||
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WHITING PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
|||||||||||||
|
REVENUES AND OTHER INCOME:
|
||||||||||||||||
|
Oil, NGL and natural gas sales
|
$ | 337,036 | $ | 650,527 | $ | 626,733 | $ | 1,170,375 | ||||||||
|
Loss on sale of properties
|
(1,861 | ) | (64,776 | ) | (3,795 | ) | (61,578 | ) | ||||||||
|
Amortization of deferred gain on sale
|
3,772 | 3,738 | 7,621 | 9,574 | ||||||||||||
|
Interest income and other
|
636 | 520 | 1,031 | 870 | ||||||||||||
|
Total revenues and other income
|
339,583 | 590,009 | 631,590 | 1,119,241 | ||||||||||||
|
COSTS AND EXPENSES:
|
||||||||||||||||
|
Lease operating expenses
|
105,172 | 143,375 | 219,548 | 309,740 | ||||||||||||
|
Production taxes
|
26,826 | 56,729 | 52,753 | 101,107 | ||||||||||||
|
Depreciation, depletion and amortization
|
304,016 | 322,411 | 616,308 | 605,930 | ||||||||||||
|
Exploration and impairment
|
25,781 | 57,557 | 61,272 | 138,481 | ||||||||||||
|
General and administrative
|
33,523 | 44,987 | 78,319 | 88,967 | ||||||||||||
|
Interest expense
|
78,660 | 89,176 | 160,567 | 163,433 | ||||||||||||
|
Loss on extinguishment of debt
|
179,396 | 45 | 88,777 | 5,634 | ||||||||||||
|
Commodity derivative (gain) loss, net
|
(2,761 | ) | 102,419 | 2,000 | 92,568 | |||||||||||
|
Total costs and expenses
|
750,613 | 816,699 | 1,279,544 | 1,505,860 | ||||||||||||
|
LOSS BEFORE INCOME TAXES
|
(411,030 | ) | (226,690 | ) | (647,954 | ) | (386,619 | ) | ||||||||
|
INCOME TAX EXPENSE (BENEFIT):
|
||||||||||||||||
|
Current
|
(1 | ) | (84 | ) | 2 | 65 | ||||||||||
|
Deferred
|
(109,983 | ) | (77,311 | ) | (175,152 | ) | (131,261 | ) | ||||||||
|
Total income tax benefit
|
(109,984 | ) | (77,395 | ) | (175,150 | ) | (131,196 | ) | ||||||||
|
NET LOSS
|
(301,046 | ) | (149,295 | ) | (472,804 | ) | (255,423 | ) | ||||||||
|
Net loss attributable to noncontrolling interests
|
5 | 21 | 15 | 38 | ||||||||||||
|
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
|
$ | (301,041 | ) | $ | (149,274 | ) | $ | (472,789 | ) | $ | (255,385 | ) | ||||
|
LOSS PER COMMON SHARE
|
||||||||||||||||
|
Basic
|
$ | (1.33 | ) | $ | (0.73 | ) | $ | (2.20 | ) | $ | (1.37 | ) | ||||
|
Diluted
|
$ | (1.33 | ) | $ | (0.73 | ) | $ | (2.20 | ) | $ | (1.37 | ) | ||||
|
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
||||||||||||||||
|
Basic
|
226,039 | 204,130 | 215,203 | 186,657 | ||||||||||||
|
Diluted
|
226,039 | 204,130 | 215,203 | 186,657 | ||||||||||||
11
WHITING PETROLEUM CORPORATION
Reconciliation of Net Loss Available to Common Shareholders to
Adjusted Net Income (Loss) Available to Common Shareholders
(in thousands, except per share data)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
|||||||||||||
|
Net loss available to common shareholders
|
$ | (301,041 | ) | $ | (149,274 | ) | $ | (472,789 | ) | $ | (255,385 | ) | ||||
|
Adjustments net of tax:
|
||||||||||||||||
|
Amortization of deferred gain on sale
|
(2,369 | ) | (2,353 | ) | (4,786 | ) | (6,027 | ) | ||||||||
|
Loss on sale of properties
|
1,168 | 40,777 | 2,383 | 38,763 | ||||||||||||
|
Impairment expense
|
9,664 | 15,823 | 19,066 | 32,455 | ||||||||||||
|
Penalties for early termination of drilling rig contracts
|
1,417 | 13,726 | 10,013 | 40,644 | ||||||||||||
|
Loss on early extinguishment of debt
|
112,661 | 28 | 55,752 | 3,546 | ||||||||||||
|
Total measure of derivative (gain) loss reported under U.S. GAAP
|
(1,734 | ) | 64,472 | 1,256 | 58,271 | |||||||||||
|
Total net cash settlements received on commodity derivatives during the period
|
21,511 | 25,972 | 56,152 | 57,805 | ||||||||||||
|
Adjusted net income (loss) (1)
|
$ | (158,723 | ) | $ | 9,171 | $ | (332,953 | ) | $ | (29,928 | ) | |||||
|
Adjusted net income (loss) available to common shareholders per share, basic
|
$ | (0.70 | ) | $ | 0.04 | $ | (1.55 | ) | $ | (0.16 | ) | |||||
|
Adjusted net income (loss) available to common shareholders per share, diluted
|
$ | (0.70 | ) | $ | 0.04 | $ | (1.55 | ) | $ | (0.16 | ) | |||||
|
(1)
|
Adjusted Net Income (Loss) Available 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) Available 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) Available 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.
|
12
WHITING PETROLEUM CORPORATION
Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow
(in thousands)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
|||||||||||||
|
Net cash provided by operating activities
|
$ | 160,986 | $ | 325,997 | $ | 206,934 | $ | 528,136 | ||||||||
|
Exploration
|
10,393 | 32,421 | 30,912 | 86,928 | ||||||||||||
|
Exploratory dry hole costs
|
- | (258 | ) | - | (799 | ) | ||||||||||
|
Changes in working capital
|
(19,731 | ) | 22,526 | 16,095 | 15,674 | |||||||||||
|
Discretionary cash flow (1)
|
$ | 151,648 | $ | 380,686 | $ | 253,941 | $ | 629,939 | ||||||||
|
(1)
|
Discretionary cash flow is a non-GAAP measure. 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 U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
|
Conference Call
The Company’s management will host a conference call with investors, analysts and other interested parties on Thursday, July 28, 2016 at 11:00 a.m. EDT (10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting’s second quarter 2016 financial and operating results. Participants are encouraged to pre-register for the conference call by clicking on the following link: http://dpregister.com/10089287. Callers who pre-register will be given a unique telephone number and PIN to gain immediate access on the day of the call.
Those without internet access or unable to pre-register may join the live call by dialing: (877) 328-5506 (U.S.); (866) 450-4696 (Canada) or (412) 317-5422 (International) to be connected to the call. Presentation slides will be available at http://www.whiting.com by clicking on the “Investor Relations” box on the menu and then on the link titled "Presentations & Events."
A telephonic replay will be available beginning one to two hours after the call on Thursday, July 28, 2016 and continuing through Thursday, August 4, 2016. You may access this replay at (877) 344-7529 (U.S.); 855-669-9658 (Canada) or (412) 317-0088 (International) and enter the pass code 10089287. You may also access a web archive at http://www.whiting.com beginning one to two hours after the conference call.
About Whiting Petroleum Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.
Forward-Looking Statements
This news release contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.
13
These risks and uncertainties include, but are not limited to: declines in or extended periods of low oil, NGL or natural gas prices; our level of success in exploration, development and production activities; risks related to our level of indebtedness, ability to comply with debt covenants and periodic redeterminations of the borrowing base under our credit agreement; impacts to financial statements as a result of impairment write-downs; our ability to successfully complete asset dispositions and the risks related thereto; revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors; adverse weather conditions that may negatively impact development or production activities; the timing of our exploration and development expenditures; inaccuracies of our reserve estimates or our assumptions underlying them; risks relating to any unforeseen liabilities of ours; our ability to generate sufficient cash flows from operations to meet the internally funded portion of our capital expenditures budget; our ability to obtain external capital to finance exploration and development operations; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; the potential impact of federal debt reduction initiatives and tax reform legislation being considered by the U.S. Federal Government that could have a negative effect on the oil and gas industry; unforeseen underperformance of or liabilities associated with acquired properties; the impacts of hedging on our results of operations; failure of our properties to yield oil or gas in commercially viable quantities; availability of, and risks associated with, transport of oil and gas; our ability to drill producing wells on undeveloped acreage prior to its lease expiration; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; uninsured or underinsured losses resulting from our oil and gas operations; our inability to access oil and gas markets due to market conditions or operational impediments; the impact and costs of compliance with laws and regulations governing our oil and gas operations; our ability to replace our oil and natural gas reserves; any loss of our senior management or technical personnel; competition in the oil and gas industry; cyber security attacks or failures of our telecommunication systems; and other risks described under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2016 and Annual Report on Form 10-K for the period ended December 31, 2015. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.
14