Q2 09 Average Production of 55,309 BOE/D Up 25% Over Q2 08 Due to
Increasing Production from Bakken and EOR Projects Bank Debt Down
to $220 Million at June 30, 2009 from $570 Million at March 31,
2009 Company Increases Its Exploration and Development Budget to
$440 Million from $398 Million DENVER, July 29
/PRNewswire-FirstCall/ -- Whiting Petroleum Corporation (NYSE:WLL)
today reported a second quarter 2009 loss of $93.2 million, or
$1.83 per basic and diluted share, on total revenues of $230.2
million. This compares to second quarter 2008 net income of $80.4
million, or $1.90 per basic and diluted share, on total revenues of
$345.8 million. As disclosed in the Company's first quarter 2009
Form 10-Q, effective April 1, 2009, Whiting elected to de-designate
all of its commodity derivative contracts that were designated as
cash flow hedges as of March 31, 2009 and thereby discontinue hedge
accounting prospectively. Accordingly, beginning April 1, 2009, all
of Whiting's derivative contracts are marked-to-market with fair
value gains or losses recognized immediately in earnings. As a
result of this change in accounting election and due to price
increases in the NYMEX crude oil forward price curve since April 1,
2009, Whiting's second quarter net loss includes after-tax,
non-cash losses on hedging arrangements of $96.0 million, or $1.89
per share. Without this non-cash charge, our earnings for the
quarter would have been positive. Discretionary cash flow in the
second quarter of 2009 totaled $109.7 million, compared to the
$216.3 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
second quarter of 2009 versus the comparable 2008 period was
primarily the result of a 55% decline in the Company's wellhead oil
price, including the price of natural gas liquids (NGLs), and a 69%
decrease in its wellhead natural gas price. Production in the
second quarter of 2009 totaled 5.03 million barrels of oil
equivalent (MMBOE), of which 3.77 MMBOE were crude oil/NGLs (75%)
and 1.26 MMBOE were natural gas (25%). The second quarter 2009
production total equates to a daily average production rate of
55,309 barrels of oil equivalent (BOE), which represents a 25%
increase from the 44,200 BOE per day average rate in 2008's second
quarter. The 55,309 BOE per day average rate in the second quarter
was also up 2% from the 54,320 BOE per day average rate in the
first quarter of 2009. Production increased in the second quarter
of 2009 compared to the second quarter of 2008 due to successful
drilling results in the prolific Bakken play as well as continued
production increases from the Company's enhanced oil recovery (EOR)
projects at the Postle and North Ward Estes fields. James J.
Volker, Whiting's Chairman, President and CEO, commented, "We are
pleased with the closing of our convertible perpetual preferred
stock offering as well as our participation agreement in the Sanish
field. We used the net proceeds from the offering and the Sanish
field transaction to reduce a portion of our bank debt, which was
down to $220 million at June 30, 2009 from $570 million at March
31, 2009. We now have the additional financial flexibility to step
up our operational activity in the first half of 2010 should
commodity prices stay at their current levels. Our objective for
the balance of 2009 is to maintain our current liquidity by funding
our remaining capital expenditures through discretionary cash flow.
We believe this can be accomplished by focusing our exploration and
development expenditures on our Bakken play in North Dakota and on
our CO2 floods at the Postle and North Ward Estes fields. These
areas are heavily weighted toward oil and are currently our highest
rate-of-return projects, particularly with front month oil prices
trading at approximately 18 times the price of natural gas. Our
Bakken play and two EOR projects are expected to capture nearly
100% of our capital expenditures during the remainder of the year.
Based on the performance of these projects in the second quarter,
we have increased our year-over-year production growth estimate to
a range of 10% to 12%, up from a previous range of 8% to 10%. With
these key projects and declining completed well and operating
costs, I am optimistic about Whiting's operational results in the
second half of 2009." 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 15,448 BOE per day in June 2009 (after
consideration of the Sanish field transaction), up 3% from the
14,930 BOE average daily rate in March 2009 and up 84% from the
8,400 BOE average daily rate in June 2008. Whiting increased its
average net production from the Sanish field in the second quarter
of 2009 to 10,765 BOE per day, up 21% from the 8,890 BOE per day
average in the first quarter of 2009. Our net production from the
Sanish field averaged 10,179 BOE per day in June 2009 (after
consideration of the Sanish field transaction), a 200% increase
from 3,400 BOE per day in June 2008. Immediately east of the Sanish
field is the Parshall field, where we own interests in 73,760 gross
acres (18,315 net acres). The Company's net production from its
interests in the Parshall field during the second quarter of 2009
averaged 5,085 BOE per day, a 5% decline from the 5,360 BOE per day
average in the first quarter of 2009. Our net production from the
Parshall field averaged 5,268 BOE per day in June 2009, a 5%
increase from 5,000 BOE per day in June 2008 and a 4% increase from
the 5,060 BOE average daily rate in March 2009. The principal
operator of the Parshall field is EOG Resources, Inc. In mid-June,
EOG began completion operations on the first of 16 wells that had
been waiting on completion. Through July 15, 2009, 10 of these
wells had been completed and placed on production. The remaining
six wells are expected to be completed over the next four weeks. It
is expected that Whiting's net production from the Parshall field
will increase in the third quarter of 2009 due to these new
producers. As of July 15, 2009, we have participated in 109 Bakken
wells in Parshall, of which 98 are producing, nine are awaiting
completion operations and two are being drilled. We recently
completed two prolific oil wells in the Sanish field. During a
24-hour test of the Middle Bakken formation on June 25, 2009, the
Rohde 44-1H flowed 2,250 barrels of oil and 1.7 million cubic feet
(MMcf) of gas (2,528 BOE) per day. The initial 24-hour production
rate was gauged on a 32/64-inch choke with a flowing casing
pressure of 1,137 pounds per square inch (psi). Whiting drilled the
Rohde 44-1H well in the central portion of the Sanish field.
Whiting, the operator of the well, holds a 43% working interest and
a 35% net revenue interest in the new producer. Approximately six
miles to the south-southeast, Whiting completed the Lacey 11-12H on
May 25, 2009 flowing at an initial daily rate of 2,164 barrels of
oil and 1.3 MMcf of gas (2,376 BOE) per day. The initial 24-hour
production rate was gauged on a 32/64-inch choke with a flowing
casing pressure of 914 psi. Whiting, the operator of the well,
holds a 42% working interest and a 35% net revenue interest in the
new producer, which was drilled in the south-central portion of the
field. Both the Lacey and Rohde wells are included in the recently
announced Sanish field transaction. Whiting completed its second
Three Forks well in the Sanish field. On June 10, 2009, the Hansen
21-3H flowed 489 barrels of oil and 370 thousand cubic feet (Mcf)
of gas (551 BOE) during a 24-hour test of the Three Forks formation
at a vertical depth of approximately 10,800 feet. The initial
production rate was gauged on a 20/64-inch choke with a flowing
casing pressure of 727 psi. The well was fracture stimulated in 11
stages. Whiting holds a 50% working interest and a 41% net revenue
interest in the well, which was drilled on the southwestern portion
of the Sanish field. The Hansen well was also included in the
Sanish field transaction. Whiting is encouraged by the results of a
recent Three Forks well drilled by Brigham Exploration Company at a
location immediately north of the Sanish field. The well, in which
Whiting does not hold an interest, flowed more than 2,000 BOE per
day from 20 intervals that had been fracture stimulated in the
Three Forks, according to a news release issued by the company on
July 14, 2009. Whiting has six undrilled 1,280-acre spacing units
immediately adjacent to this well. From January 1, 2009 through
July 15, 2009, Whiting has completed 20 new producers in the Sanish
field. As of July 15, five wells were being drilled in the field
and two wells were being completed. The Company holds interests in
a total of 125,557 gross acres (70,821 net acres) in the Sanish
field. Whiting expects its 17-mile oil line connecting the Sanish
field to the Enbridge pipeline in Stanley, North Dakota to be in
service 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 announced plans to expand its oil
pipeline in Mountrail County, North Dakota to a daily 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 the result of drilling and completion efficiencies which
have reduced the average time from spud date to rig release to
approximately 35 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 range from approximately $5.0 million to $5.5
million per well, which is 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. A new 2,000-hp electric compressor was recently installed,
bringing inlet capacity to 17 MMcf of gas per day. Two additional
2,000-hp electric compressors are expected to be installed by the
end of August 2009, replacing two rental compressors, which is
expected to bring the plant's inlet compression to 21 MMcf per day.
Sanish Field Transaction On June 4, 2009, Whiting announced an
agreement with a privately held independent oil company covering
twenty-five 1,280-acre units and one 640-acre unit located
primarily in the western portion of the Sanish field in Mountrail
County, North Dakota. The private company agreed to pay 65% of
Whiting's net working interest completed well cost to receive 50%
of Whiting's working interest and net revenue interest in the first
and second wells planned for each of the units. Pursuant to the
agreement, Whiting will remain the operator for each unit. As of
June 4, 2009, there were 18 drilled or drilling wells on the 26
units covered by the agreement and 12 more wells were planned in
2009 on these units, which would result in the private company
participating on 30 wells in the Sanish field in 2009 and 21 wells
thereafter. Whiting expects to have five rigs running in the Sanish
field through December 2009. At the closing of the transaction on
June 4, 2009, the private company paid Whiting $107.3 million,
representing $6.4 million for acreage costs, $65.8 million for 65%
of Whiting's cost in the 18 wells drilled or drilling as of June 4,
2009 and $35.1 million for a 50% interest in Whiting's Robinson
Lake gas plant and oil and gas gathering system. Whiting used these
proceeds to repay a portion of the debt outstanding under its
credit agreement. As of June 4, 2009, there were 93 total units in
Sanish field in which Whiting owned an interest. The 26 units
covered by the agreement represent 28% of these total units. On
units not covered by the agreement, Whiting owned interests in 30
producing wells on 27 Whiting-operated units and 20 producing wells
on 20 non-operated units where 27 infill wells are planned under
current spacing as of June 1, 2009. Whiting also retained 18
operated and two non-operated units where 38 wells could be
drilled. As a result of the 65% for 50% cost sharing arrangement
under the transaction, Whiting's finding and development cost of
all producing wells drilled under the agreement will improve by
30%. The following table summarizes the Company's operated and
non-operated net production from the Sanish and Parshall fields in
the second quarter and in June 2009: Operated and Non-operated
Bakken Net Production by Field (In BOE) 2nd Qtr 2009 June 2009
------------------------ ------------------------ Parshall Sanish
Total Parshall Sanish Total -------- ------ ----- -------- ------
----- Whiting Operated 62,382 887,779 950,161 22,123 274,121
296,244 Principal Non-Operated 370,526 -- 370,526 125,987 --
125,987 Other Non-Operated 29,833 91,806 121,638 9,933 31,262
41,195 ------ ------ ------- ----- ------ ------ 462,741 979,585
1,442,325 158,043 305,383 463,426 ======= ======= ========= =======
======= ======= Daily BOE 5,085 10,765 15,850 5,268 10,179
15,448(1) (1) Our June 2009 production of 15,448 BOE per day is net
of 1,713 BOE per day sold in the Sanish field transaction.
Increasing Production from EOR Projects Production from the Postle
field, located in Texas County, Oklahoma, increased 39% from a net
6,300 BOE per day in June 2008 to a net 8,734 BOE per day in June
2009. The June 2009 average daily rate represents an 11% sequential
increase over the net 7,900 BOE per day rate in March 2009. Four of
the six units in the Postle field are currently active CO2 EOR
projects. As of July 15, 2009, there were two workover rigs active
in the field. The North Ward Estes field, located in Ward and
Winkler Counties, Texas, is responding positively to Whiting's
water and CO2 floods, which Whiting initiated in Phase I in May
2007. In early March 2009, the Company began CO2 injection in Phase
II. Production from the field increased 22% from a net 5,400 BOE
per day in June 2008 to a net 6,543 BOE per day in June 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 four phases
through 2015. We estimate that the first three phases will be
substantially complete by December 2009. As of July 15, 2009, there
were 14 workover rigs active in the field. Exploration Updates
Hatfield Prospect. Whiting has drilled two wells on the Hatfield
prospect, located in Carbon County, Wyoming. The first well, the
Beckman Canyon 21-24D, was a vertical well that encountered good
oil shows in the Niobrara formation during drilling operations to a
deeper zone. Whiting has elected to plug back the well to test the
Niobrara formation. The Company holds a 100% working interest and
an 83% net revenue interest in the well. The second well, the Artus
19-33H, was drilled as a horizontal test of the oil-bearing
Niobrara formation. During fracture stimulation of the lateral, the
frac fluids appear to have been lost in a nearby fault. This well
may be abandoned depending on completion results from the Beckman
Canyon 21-24D. Whiting holds a 100% working interest and an 80% net
revenue interest in the Artus well. The Company holds 53,164 gross
(31,907 net) acres in the Hatfield prospect. Hatch Point Prospect.
Whiting recently completed operations on the Threemile Unit 43-18
well, a Cane Creek test, located on the Hatch Point Prospect in San
Juan County, Utah. After very good oil shows were seen in the Cane
Creek formation during drilling operations, Whiting tested a
5,644-foot lateral that was fracture stimulated in 11 stages in the
Cane Creek at a vertical depth of approximately 7,500 feet. Initial
testing in the toe of the lateral recovered oil at a rate of
approximately 15 barrels per hour. The well was subsequently
completed in the remaining 10 frac intervals flowing at rates of 50
to 65 barrels of oil per day. Whiting believes that the frac fluids
used in the completion of the well may have reacted adversely with
salt beds within the Cane Creek zone, thereby reducing production
rates. The Company anticipates redesigning its fracture stimulation
for future wells at the Hatch Point prospect. Whiting owns a 53%
working interest and a 44% net revenue interest in the well and
holds 41,549 gross acres (22,438 net) in the Hatch Point prospect
area. Operated Rig Count At the height of our drilling activity in
2008, we were active with 18 operated drilling rigs and 51 operated
workover rigs. In response to lower commodity prices, we have
reduced the number of operated drilling rigs to five and the number
of operated workover rigs to 22 as of July 15, 2009. We were also
participating in the drilling of two non-operated wells in the
Parshall field. The breakdown of our operated rigs is as follows:
Region Drilling Workover ------ -------- -------- Northern Rockies
Sanish Field 5 1 Other 0 1 Central Rockies 0 2 CO2 Projects Postle
0 2 North Ward Estes 0 14 Mid-Continent/Michigan 0 2 -- -- Totals 5
22 Currently, we expect our operated drilling rig count to remain
at five rigs, and our operated workover rig count to drop to below
20 in the second half of 2009. However, we review plans weekly and
may add or subtract rigs with changes in oil and gas prices. Public
Offering of Convertible Perpetual Preferred Stock On June 23, 2009,
Whiting completed a public offering of 3,450,000 shares of 6.25%
convertible perpetual preferred stock at a price of $100.00 per
share to the public. The number of shares sold included the sale of
450,000 shares pursuant to the full exercise of the underwriters'
over-allotment option. Each share of convertible perpetual
preferred stock has a liquidation preference of $100.00 per share
and is convertible, at a holder's option, initially into 2.3033
shares of Whiting's common stock based on an initial conversion
price of $43.4163 per share of Whiting's common stock, in each case
subject to adjustments. The shares of convertible preferred stock
trade on the NYSE under the symbol "WLL-PA." Whiting received net
proceeds of approximately $334.6 million, after deducting
underwriting discounts and commissions and expenses of the
offering. Whiting used all of the net proceeds from the offering to
repay a portion of the debt outstanding under its credit agreement.
The amounts repaid under the credit agreement are available for
Whiting to reborrow in the future. 2009 Exploration and Development
Budget Our current 2009 capital budget for exploration and
development expenditures is $440.0 million, which compares to the
$398.3 million reported in our June 4, 2009 news release. Of this
$440.0 million, $284.2 million had been invested as of June 30,
2009. We expect the remaining $155.8 million to be funded with net
cash provided by our operating activities in the second half of
2009 based on prevailing oil and natural gas prices. The following
table shows a breakdown of our planned exploration and development
expenditures for 2009: 2009 Planned Capital Expenditures (In
millions) -------------------- Northern Rockies $226.7 Central
Rockies $27.2 Permian Basin $18.7 EOR Projects North Ward Estes(1)
$104.1 Postle(1) $33.3 Exploration and Early Rig Termination(2)
$30.0 ------ Total $440.0 ====== (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. (2) Comprised primarily of exploration salaries, $7.5
million of early rig termination fees, lease delay rentals, seismic
surveys and other development costs. The following table summarizes
the Company's net production and commodity price realizations for
the quarters ended June 30, 2009 and 2008: Three Months Ended
------------------- Production 6/30/09 6/30/08 Change ----------
------- ------- ------ Oil and condensate (MMBbls) 3.77 2.80 35%
Natural gas (Bcf) 7.58 7.34 3% Total equivalent (MMBOE) 5.03 4.02
25% Average Sales Price ------------------- Oil and condensate (per
Bbl): Price received $50.66 $113.28 (55%) Effect of crude oil
hedging(1) (1.15) (17.19) ------ ------- Realized price $49.51
$96.09 (48%) ====== ====== Natural gas (per Mcf): Price received
$3.08 $10.02 (69%) Effect of natural gas hedging(1) 0.05 - ----
----- Realized price $3.13 $10.02 (69%) ===== ====== (1) Whiting
realized pre-tax cash settlement losses on its crude oil and
natural gas hedges of $4.0 million during the second quarter of
2009. A summary of Whiting's outstanding hedges is included later
in this news release. Second Quarter and First Half 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 Six Months Ended June 30,
Ended June 30, ----------------- ------------------ 2009 2008 2009
2008 ---- ---- ---- ---- Production (MMBOE) 5.03 4.02 9.92 7.76
Sales price, net of hedging $41.79 $85.14 $37.44 $78.08 Lease
operating expense 11.44 14.29 11.95 14.58 Production tax 2.96 6.48
2.46 5.63 General & administrative 2.04 5.72 1.94 4.46
Exploration 1.23 1.45 1.90 1.83 Cash interest expense 3.00 3.52
2.84 3.63 Cash income tax expense - (0.21) (0.05) 0.11 ------
------ ------ ---- $21.12 $53.89 $16.40 $47.84 ====== ====== ======
====== During the second quarter, the company-wide basis
differential for crude oil compared to NYMEX was $8.96 per barrel,
which compared to $10.66 per barrel in the first 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 $9.00 per
barrel. The company-wide basis differential for natural gas
compared to NYMEX in the second quarter was $0.42 per Mcf, which
compared to $1.14 per Mcf in the first quarter of 2009. We expect
our natural gas price differential to average between $0.40 and
$0.70 during the remainder of 2009. Second Quarter 2009 Drilling
Summary Whiting posted a 100% success rate for the 27 gross (7.8
net) wells in which it participated during the second 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 six months ended June 30, 2009:
Gross/Net Wells Completed
--------------------------------------------------- Expl. &
Dev. Total New % Success Cost Producing Non-Producing Drilling Rate
(in millions) --------- ------------- -------- ---- -------------
Q209 27 / 7.8 0 / 0 27 / 7.8 100% / 100% $107.8 6M09 75 / 30.3 0 /
0 75 / 30.3 100% / 100% $284.2 Outlook for Third Quarter and
Full-Year 2009 The following table provides a summary of certain
estimates for the third quarter and full-year 2009 based on current
forecasts, including Whiting's full-year 2009 capital budget of
$440.0 million (excluding any potential acquisition costs).
Guidance for the third quarter and full-year 2009 is as follows:
Guidance -------- Third Quarter Full-Year 2009 2009 ---- ----
Production (MMBOE) 4.80 - 5.00 19.20 - 19.60 Lease operating
expense per BOE $11.40 - $11.80 $11.70 - $12.00 General and admin.
expense per BOE $2.30 - $2.50 $2.10 - $2.30 Interest expense per
BOE $3.20 - $3.40 $3.30 - $3.50 Depr., depletion and amort. per BOE
$19.80 - $20.20 $19.90 - $20.30 Prod. taxes (% of production
revenue) 6.8% - 7.2% 6.6% - 7.0% Oil Price Differentials to NYMEX
per Bbl $8.50 - $9.50 $9.00 - $10.00 Gas Price Differentials to
NYMEX per Mcf $0.40 - $0.70 $0.50 - $0.70 Oil Hedges Whiting
recently renegotiated its crude oil hedges at no cost for the years
2011, 2012 and 2013 with higher ceilings and lower floors. The
following summarizes Whiting's crude oil hedges as of July 7, 2009:
Weighted Average As a Percentage of Hedge Contracted Volume NYMEX
Price Collar Range Forecasted PDP Period (Bbls per Month) (per Bbl)
Oil Production ------ ----------------- ------------------------
------------------- 2009 Q3 507,497 $57.54 - $71.07 62.0% Q4
489,190 $61.39 - $76.28 63.9% 2010 Q1 440,910 $60.66 - $76.30 61.8%
Q2 425,643 $63.02 - $81.46 62.2% Q3 415,398 $60.68 - $78.43 62.9%
Q4 400,146 $60.69 - $79.67 62.4% 2011 Q1 369,917 $56.73 - $85.28
61.3% Q2 369,696 $56.72 - $85.26 62.8% Q3 369,479 $56.71 - $85.22
64.3% Q4 369,255 $56.69 - $85.21 65.5% 2012 Q1 339,054 $56.39 -
$86.95 63.5% Q2 338,850 $56.38 - $86.93 64.7% Q3 338,650 $56.37 -
$86.89 65.9% Q4 338,477 $56.36 - $86.88 66.9% 2013 Q1 290,000
$55.34 - $85.94 60.5% Q2 290,000 $55.34 - $85.94 62.1% Q3 290,000
$55.34 - $85.94 63.1% Oct 290,000 $55.34 - $85.94 64.3% Nov 190,000
$54.59 - $81.75 42.2% The following summarizes Whiting Petroleum
Corporation's natural gas hedges as of July 7, 2009: Weighted
Average As a Percentage of Hedge Contracted Volume NYMEX Price
Collar Range Forecasted PDP Period (MMBtu per Month) (per MMBtu)
Gas Production ------ ----------------- ------------------------
------------------- 2009 Q3 46,675 $6.00 - $15.60 2.0% Q4 44,874
$7.00 - $14.85 2.0% 2010 Q1 43,295 $7.00 - $18.65 2.1% Q2 41,835
$6.00 - $13.20 2.1% Q3 40,555 $6.00 - $14.00 2.2% Q4 39,445 $7.00 -
$14.20 2.2% 2011 Q1 38,139 $7.00 - $17.40 2.2% Q2 36,954 $6.00 -
$13.05 2.3% Q3 35,855 $6.00 - $13.65 2.3% Q4 34,554 $7.00 - $14.25
2.3% 2012 Q1 33,381 $7.00 - $15.55 2.3% Q2 32,477 $6.00 - $13.60
2.4% Q3 31,502 $6.00 - $14.45 2.4% Q4 30,640 $7.00 - $13.40 2.4%
Whiting also has the following fixed-price natural gas contracts in
place as of July 1, 2009: Natural Gas 2009 Contract As a Percentage
of Volumes in MMBtu Price(1) Forecasted PDP Fixed Price Contracts
per Month per MMBtu Gas Production ---------------------
----------------- ------------- ------------------ Jul. 2009 - May
2011 23,000 $5.14 1.3% Jul. 2009 - Sep. 2012 67,000 $4.56 3.9% (1)
Annual 4% price escalation on fixed-price contracts. Selected
Operating and Financial Statistics
------------------------------------------- Three Months Ended Six
Months Ended ------------------ ---------------- June 30, June 30,
-------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Selected
operating statistics Production Oil and condensate, MBbl 3,769
2,798 7,343 5,392 Natural gas, MMcf 7,582 7,344 15,472 14,234 Oil
equivalents, MBOE 5,033 4,022 9,922 7,764 Average Prices Oil, Bbl
(excludes hedging) $50.66 $113.28 $41.85 $101.88 Natural gas, Mcf
(excludes hedging) $3.08 $10.02 $3.44 $8.99 Per BOE Data Sales
price (including hedging) $41.79 $85.14 $37.44 $78.08 Lease
operating $11.44 $14.29 $11.95 $14.58 Production taxes $2.96 $6.48
$2.46 $5.63 Depreciation, depletion and amortization $19.93 $13.63
$20.19 $13.56 General and administrative $2.04 $5.72 $1.94 $4.46
Selected Financial Data (In thousands, except per share data) Total
revenues and other income $230,158 $345,775 $393,997 $609,825 Total
costs and expenses $375,394 $217,911 $609,036 $383,179 Net income
(loss) $(93,163) $80,449 $(136,922) $142,763 Net income (loss) per
common share, basic $(1.83) $1.90 $(2.78) $3.38 Net income (loss)
per common share, diluted $(1.83) $1.90 $(2.78) $3.37 Average
shares outstanding, basic 50,842 42,320 49,230 42,296 Average
shares outstanding, diluted 50,842 42,446 49,230 42,416 Net cash
provided by operating activities $110,055 $206,638 $144,302
$329,091 Net cash used in investing activities $(65,122) $(398,163)
$(286,922) $(568,664) Net cash provided by financing activities
$(38,768) $210,000 $146,174 $250,000 Conference Call The Company's
management will host a conference call with investors, analysts and
other interested parties on Thursday, July 30, 2009 at 11:00 a.m.
EDT (10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting's second
quarter 2009 financial and operating results. Please call (866)
770-7120 (U.S./Canada) or (617) 213-8065 (International) and enter
the pass code 36660813 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 July 30, 2009. A telephonic replay will be
available beginning approximately two hours after the call on
Thursday, July 30, 2009 and continuing through Thursday, August 6,
2009. You may access this replay at (888) 286-8010 (U.S./Canada) or
(617) 801-6888 (International) and entering the pass code 56978642.
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 financial crisis; 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 Whiting Oil and Gas Corporation's
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 Form 10-K for the year ended December 31, 2008 and
Prospectus Supplement dated June 17, 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 Second Quarter Form 10-Q for the
three and six months ended June 30, 2009, to be filed with the
Securities and Exchange Commission. WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) June 30,
December 31, 2009 2008 ---- ---- ASSETS CURRENT ASSETS: Cash and
cash equivalents $13,178 $9,624 Accounts receivable trade, net
106,880 123,386 Derivative assets 8,714 46,780 Prepaid expenses and
other 10,978 37,284 ------ ------ Total current assets 139,750
217,074 PROPERTY AND EQUIPMENT: Oil and gas properties, successful
efforts method: Proved properties 4,632,721 4,423,197 Unproved
properties 99,773 106,436 Other property and equipment 125,534
91,099 ------- ------ Total property and equipment 4,858,028
4,620,732 Less accumulated depreciation, depletion and amortization
(1,081,323) (886,065) ----------- --------- Total property and
equipment, net 3,776,705 3,734,667 --------- --------- DEBT
ISSUANCE COSTS 29,708 10,779 DERIVATIVE ASSETS 13,520 38,104 OTHER
LONG-TERM ASSETS 26,273 28,457 ------ ------ TOTAL $3,985,956
$4,029,081 ========== ========== WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share
and per share data) June 30, December 31, 2009 2008 ---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $25,359 $64,610 Accrued capital expenditures 22,462 84,960
Accrued liabilities 63,879 45,359 Accrued interest 11,101 9,673 Oil
and gas sales payable 30,579 35,106 Accrued employee compensation
and benefits 9,566 41,911 Production taxes payable 17,755 20,038
Deferred gain on sale 13,543 14,650 Derivative liabilities 34,362
17,354 Deferred income taxes 13,115 15,395 Tax sharing liability
2,112 2,112 ----- ----- Total current liabilities 243,833 351,168
NON-CURRENT LIABILITIES: Long-term debt 839,565 1,239,751 Deferred
income taxes 325,002 390,902 Deferred gain on sale 66,028 73,216
Production Participation Plan liability 69,846 66,166 Asset
retirement obligations 60,898 47,892 Derivative liabilities 97,894
28,131 Tax sharing liability 22,393 21,575 Other long-term
liabilities 3,217 1,489 ----- ----- Total non-current liabilities
1,484,843 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 June 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, 51,365,790 issued and 50,843,532 outstanding as
of June 30, 2009 and 42,582,100 issued and 42,323,336 outstanding
as of December 31, 2008 51 43 Additional paid-in capital 1,542,022
971,310 Accumulated other comprehensive income 31,959 17,271
Retained earnings 683,245 820,167 ------- ------- Total
stockholders' equity 2,257,280 1,808,791 --------- --------- TOTAL
$3,985,956 $4,029,081 ========== ========== WHITING PETROLEUM
CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In
thousands, except per share data) Three Months Ended Six Months
Ended ------------------ ---------------- June 30, June 30,
-------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- REVENUES
AND OTHER INCOME: Oil and gas sales $214,303 $390,536 $360,478
$677,267 Gain (loss) on oil hedging activities 6,848 (48,111)
20,298 (71,023) Amortization of deferred gain on sale 4,274 2,957
8,373 2,957 Gain on sale of properties 4,608 - 4,608 - Interest
income and other 125 393 240 624 --- --- --- --- Total revenues and
other income 230,158 345,775 393,997 609,825 ------- -------
------- ------- COSTS AND EXPENSES: Lease operating 57,582 57,470
118,536 113,176 Production taxes 14,914 26,057 24,433 43,743
Depreciation, depletion and amortization 100,315 54,811 200,349
105,322 Exploration and impairment 9,792 8,643 27,106 19,627
General and administrative 10,282 23,007 19,262 34,622 Interest
expense 18,693 15,671 33,373 31,217 Change in Production
Participation Plan liability 3,284 11,690 3,680 17,847 Loss on
mark-to-market derivatives 160,532 20,562 182,297 17,625 -------
------ ------- ------ Total costs and expenses 375,394 217,911
609,036 383,179 ------- ------- ------- ------- INCOME (LOSS)
BEFORE INCOME TAXES (145,236) 127,864 (215,039) 226,646 INCOME TAX
EXPENSE (BENEFIT): Current - (837) (539) 872 Deferred (52,073)
48,252 (77,578) 83,011 -------- ------ -------- ------ Total income
tax expense (benefit) (52,073) 47,415 (78,117) 83,883 --------
------ -------- ------ NET INCOME (LOSS) (93,163) 80,449 (136,922)
142,763 Preferred stock dividends - - - - -------- ------- --------
------ NET INCOME (LOSS) AVAILABLE (APPLICABLE) TO COMMON
SHAREHOLDERS $(93,163) $80,449 $(136,922) $142,763 ======== =======
========= ======== NET INCOME (LOSS) PER COMMON SHARE, BASIC
$(1.83) $1.90 $(2.78) $3.38 ====== ===== ====== ===== NET INCOME
(LOSS) PER COMMON SHARE, DILUTED $(1.83) $1.90 $(2.78) $3.37 ======
===== ====== ===== WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC
50,842 42,320 49,230 42,296 ====== ====== ====== ====== WEIGHTED
AVERAGE SHARES OUTSTANDING, DILUTED 50,842 42,446 49,230 42,416
====== ====== ====== ====== WHITING PETROLEUM CORPORATION
Reconciliation of Net Cash Provided by Operating Activities to
Discretionary Cash Flow (In thousands) Three Months Ended June 30,
-------- 2009 2008 ---- ---- Net cash provided by operating
activities $110,055 $206,638 Exploration 6,178 5,815 Changes in
working capital (6,487) 3,887 ------- ----- Discretionary cash
flow(1) $109,746 $216,340 ======== ======== Six Months Ended June
30, -------- 2009 2008 ---- ---- Net cash provided by operating
activities $144,302 $329,091 Exploration 18,811 14,227 Changes in
working capital 18,529 34,454 ------ ------ Discretionary cash
flow(1) $181,642 $377,772 ======== ======== (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 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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