Company Increases Proved Reserves 15% to 275 MMBOE at Year-End 2009
2009 Production Up 16% Over 2008 to a Record 20.27 MMBOE Replaces
292% of 2009 Production at an All-In F & D Cost of $16.97 per
BOE Q4 09 Discretionary Cash Flow of $185.5 Million 2010 E & D
Budget of $830 Million for 210-Well Drilling Program DENVER, Feb.
24 /PRNewswire-FirstCall/ -- Whiting Petroleum Corporation's
(NYSE:WLL) production in the fourth quarter of 2009 totaled a
record 5.22 million barrels of oil equivalent (MMBOE), of which
4.09 million barrels were crude oil/natural gas liquids (78%) and
1.13 MMBOE was natural gas (22%). This fourth quarter 2009
production total equates to a new record daily average production
rate of 56,710 barrels of oil equivalent (BOE), compared to the
55,540 BOE per day average rate in the fourth quarter of 2008.
Compared to the third quarter of 2009, production rose 2%.
Production in 2009 totaled a record 20.27 MMBOE, or 55,530 BOE per
day, compared to production of 17.52 MMBOE, or 47,860 BOE per day,
in 2008. The 16% increase in production for 2009 versus 2008 was
primarily the result of organic production growth in the North
Dakota Bakken and continued response from Whiting's two CO2
enhanced oil recovery (EOR) projects. Financial Results
Discretionary cash flow in the fourth quarter of 2009 totaled
$185.5 million, compared to the $111.0 million reported for the
same period in 2008. The increase in discretionary cash flow in the
fourth quarter of 2009 versus the comparable 2008 period was
primarily the result of a 30% increase in the Company's realized
oil price (net of hedging), including the price of natural gas
liquids (NGLs). For the year ended December 31, 2009, Whiting's
discretionary cash flow totaled $513.0 million, compared to $744.4
million in 2008. A reconciliation of discretionary cash flow to net
cash provided by operating activities is on page 26 of this news
release. In the fourth quarter of 2009, Whiting reported a loss of
$11.2 million, or $0.24 per basic and diluted share, on total
revenues of $316.0 million. This compares to a fourth quarter 2008
loss of $3.0 million, or $0.07 per basic and diluted share, on
total revenues of $223.9 million. Whiting's fourth quarter 2009 net
loss includes after-tax, non-cash losses on hedging arrangements of
$45.7 million, or $0.90 per share. For the year ended December 31,
2009, Whiting reported a net loss of $117.2 million, or $2.36 per
basic and diluted share, on total revenues of $979.4 million. This
compares to net income of $252.1 million, or $5.96 per basic share
and $5.94 per diluted share, on total revenues of $1.2 billion in
2008. Whiting's full-year 2009 net loss includes after-tax,
non-cash losses on hedging arrangements of $137.5 million, or $2.75
per share. Proved Reserves at December 31, 2009 As of December 31,
2009, Whiting had estimated proved reserves of 275.0 MMBOE, of
which 64% were classified as proved developed. These estimated
proved reserves had a pre-tax PV10% value of approximately $2,875.7
million, of which approximately 96% came from properties located in
Whiting's Permian Basin, Rocky Mountains and Mid-Continent core
areas. The following table summarizes Whiting's estimated proved
reserves as of December 31, 2009 by core area, the corresponding
pre-tax PV10% value and the December 2009 average daily production
rate: Proved Reserves (1)
--------------------------------------------------------------
December 2009 Pre-Tax Average Oil Natural PV10% Daily (MMBbl) Gas
Total % Value(3) Production Core Area (2) (Bcf) (MMBOE) Oil(2) (In
MM) (MBOE/d) --------- ----- ---- ----- ----- ----- ------ Permian
Basin 112.3 66.2 123.3 91% $901.3 11.7 Rocky Mountains 70.2 159.4
96.8 73% 1,266.3 30.3 Mid-Continent 36.6 15.2 39.1 94% 581.3 9.3
Gulf Coast 2.3 36.6 8.4 27% 69.6 3.0 Michigan 2.4 30.0 7.4 32% 57.2
2.3 --- ---- --- -- ---- --- Total 223.8 307.4 275.0 81% $2,875.7
56.6 ===== ===== ===== == ======== ==== (1) Oil and gas reserve
quantities and related discounted future net cash flows have been
derived from oil and gas prices calculated using an average of the
first-day-of-the month NYMEX price for each month within the most
recent 12 months, pursuant to current SEC and FASB guidelines. The
NYMEX prices used were $61.18/Bbl and $3.87/Mcf. (2) Oil includes
natural gas liquids. (3) Pre-tax PV10% may be considered a non-GAAP
financial measure as defined by the SEC and is derived from the
standardized measure of discounted future net cash flows, which is
the most directly comparable GAAP financial measure. Pre-tax PV10%
is computed on the same basis as the standardized measure of
discounted future net cash flows but without deducting future
income taxes. As of December 31, 2009, our discounted future income
taxes were $532.2 million and our standardized measure of
discounted future net cash flows was $2,343.5 million. We believe
pre-tax PV10% is a useful measure for investors for evaluating the
relative monetary significance of our oil and natural gas
properties. We further believe investors may utilize our pre-tax
PV10% as a basis for comparison of the relative size and value of
our proved reserves to other companies because many factors that
are unique to each individual company impact the amount of future
income taxes to be paid. Our management uses this measure when
assessing the potential return on investment related to our oil and
gas properties and acquisitions. However, pre-tax PV10% is not a
substitute for the standardized measure of discounted future net
cash flows. Our pre-tax PV10% and the standardized measure of
discounted future net cash flows do not purport to present the fair
value of our proved oil and natural gas reserves. The following is
a summary of Whiting's changes in quantities of proved oil and gas
reserves for the year ended December 31, 2009: Oil Natural Gas
Total (MBbl) (MMcf) (MBOE) ------- ----------- ------- Balance -
December 31, 2008 180,008 354,779 239,138 Extensions and
discoveries 25,115 41,969 32,109 Sales of minerals in place (2,689)
(1,559) (2,949) Purchases of minerals in place 3,177 4,155 3,870
Production (15,381) (29,333) (20,269) Revisions to previous
estimates 33,566 (62,618) 23,130 (1) ------ ------ ------ Balance -
December 31, 2009 223,796 307,393 275,029 ======= ======= =======
(1) Of the 23.1 MMBOE of upward revisions, 17.3 MMBOE were due to
commodity prices and 5.8 MMBOE were the result of well performance
and new data. Of the 62.6 Bcf of downward gas revisions, 17.6 Bcf
was attributable to the lower gas price assumption used in the
year-end 2009 reserve estimate. The remaining 45.0 Bcf included
13.0 Bcf of performance related adjustments on producing wells and
10.0 Bcf of adjustments on proved undeveloped reserve assignments
in the Sulphur Creek field. In connection with the Company's
adoption of the new SEC rules on oil and gas reserve estimation,
there was also a downward revision of 11.0 Bcf related to the
removal of proved undeveloped locations from the Company's drilling
plans. The remaining 11.0 Bcf of downward revisions was spread
across numerous wells throughout all regions. Most of the proved
reserve additions at December 31, 2009 came from the Company's
Bakken play in the Sanish and Parshall fields in Mountrail County,
North Dakota. An estimated 25.0 MMBOE of new Bakken proved reserves
were booked at year-end 2009, bringing Whiting's total proved
reserves in the two fields to 42.3 MMBOE at year-end 2009. Of this
42.3 MMBOE, 56% were proved, developed and producing, 44% were
proved undeveloped, 85% were attributed to the Sanish field and 15%
to Whiting's interests in the Parshall field. As of December 31,
2009, the finding cost for the Sanish and Parshall fields is $13.61
per proved BOE. This includes Whiting's interest in the Robinson
Lake Gas Plant and the Company's oil and gas gathering systems in
the area. The Company's net production from the Sanish and Parshall
fields in 2009 totaled approximately 6.0 MMBOE, or an average of
16,520 BOE per day. Approximately 5.8 MMBOE of reserve additions at
December 31, 2009 were attributable to performance-related upward
revisions, primarily from the North Ward Estes CO2 project. In
total, Whiting replaced 292% of its 2009 production of 20.3 MMBOE
with 59.1 MMBOE of proved reserve additions. Through drilling
alone, the Company replaced 158% of its 2009 production with 32.1
MMBOE of proved reserve additions. The table on page 27 of this
news release summarizes Whiting's all-in finding and development
costs and reserve replacement for the five-year period ended
December 31, 2009. James J. Volker, Whiting's Chairman, President
and CEO, commented, "This is an exciting time for Whiting Petroleum
and our shareholders. In 2009, we generated 32.1 MMBOE of reserve
additions through the drillbit, replacing 158% of our record 2009
production of 20.3 MMBOE. We expect our organic growth to continue
in 2010 and beyond. We have a 210-well drilling program planned for
2010 and estimate that we could have as many as 2,400 gross wells
in our current drilling inventory. This includes 1,400 wells in our
independently engineered reserve base, which consists of proved,
probable and possible reserves, and 1,000 potential wells in our
total resource base." Mr. Volker continued, "We grew through the
acquisition of producing properties in 2004 and 2005 to increase
production levels and provide upside potential through further
development. We are now more focused on organic drilling activity
and on the development of previously acquired properties. We
believe the combination of acquisitions, subsequent development and
organic drilling provides us a broad set of growth alternatives as
we direct our resources to the properties we believe represent the
best use of our capital investments. We are now generating
substantially all of our production growth organically. We
delivered our results during 2009 by focusing on our Bakken
drilling program and our two EOR projects. In 2010, one of our
primary objectives is to establish another resource play. We
believe our Lewis & Clark prospect area, where we have amassed
a 202,000 net acre position, has the potential to be such a play.
With these key projects, we are optimistic about Whiting's
operational results in 2010 and beyond." 2010 Exploration and
Development Budget Our current 2010 capital budget for exploration
and development expenditures is $830.0 million, which we expect to
fund with net cash provided by our operating activities. To the
extent net cash provided by operating activities is higher or lower
than currently anticipated, we would adjust our capital budget
accordingly or use a portion of our available capacity under our
bank credit agreement. Our 2010 capital budget currently is
allocated among our major development areas as indicated in the
chart below: 2010 Planned Capital Expenditures (In millions)
Planned Wells ------------- ---------------- Gross Net ----- ---
Northern Rockies Sanish Field $274 86 48 Parshall Field $11 12 2
Lewis & Clark Area $62 13 9 Other Northern Rockies $30 22 7 ---
--- -- Subtotal $377 133 66 CO2 Projects North Ward Estes (1) $169
- - Postle (1) $88 24 23 --- -- -- Subtotal $257 24 23 Permian
Basin Various $51 20 16 Central Rockies Flat Rock Field $20 4 4
Sulphur Creek Field $14 5 5 Other Central Rockies $15 6 4 --- -- --
Subtotal $49 15 13 Gulf Coast Various $30 13 8 Michigan PDC Expl.
& Dvlp. $16 5 4 Other, Non-Operated $20 - - Exploration Expense
(2) $30 - - --- --- --- Grand Total $830 210 130 ==== === === (1)
2010 planned capital expenditures at our CO2 projects include $51.6
million for purchased CO2 at North Ward Estes and $12.1 million for
Postle CO2 purchases. (2) Comprised primarily of exploration
salaries, lease delay rentals and seismic and other development.
Operations Update Core Development Areas Bakken and Three Forks
Development Increases Production The following table summarizes the
Company's operated and non-operated net production from the Sanish
and Parshall fields in the fourth quarter and in December 2009:
Operated and Non-operated Net Production for Sanish and Parshall
Fields (In BOE) 4th Qtr 2009 December 2009
--------------------------- ---------------------------- Parshall
Sanish Total Parshall Sanish Total -------- ------ ----- --------
------ ----- Whiting Operated 53,442 1,001,980 1,055,422 18,038
357,184 375,222 Non-Operated 560,431 97,830 658,261 181,272 32,235
213,507 ------- ------ ------- ------- ------ ------- 613,873
1,099,810 1,713,683 199,310 389,419 588,729 ======= =========
========= ======= ======= ======= Daily BOE 6,675 11,955 18,625
6,430 12,560 18,990 (1) (1) Includes approximately 685 net BOE per
day of NGLs and natural gas from plant operations. Whiting's net
production from the Middle Bakken formation in the Sanish and
Parshall fields of Mountrail County, North Dakota averaged 18,990
BOE per day in December 2009, up 9% from the 17,410 BOE average
daily rate in September 2009 and up 34% from the 14,165 BOE average
daily rate in December 2008. Sanish Field. In 2009, Whiting
completed 38 operated wells in the Sanish field, bringing to 68 the
number of Whiting-operated wells in the field as of December 31,
2009. Including non-operated wells, there were 107 producing wells
in the Sanish field at year-end 2009. In 2010, Whiting intends to
drill 86 operated wells (48 net wells) in the field, of which 76
are planned Bakken wells and 10 are planned Three Forks wells. From
January 1 through February 15, 2010, an additional six
Whiting-operated wells were completed. One of these wells was
completed in the Three Forks formation at an initial production
rate of 1,262 BOE per day while the remaining five were completed
in the Bakken formation with average initial production rates of
2,802 BOE per day. As of February 15, 2010, 70 Whiting-operated
wells were producing from the Bakken and four wells were producing
from the Three Forks in the Sanish field. In addition, nine
operated wells were being drilled and eight operated wells were
being completed. The 74 Whiting-operated wells at Sanish had
average initial production rates of 2,093 BOE per day. Sixty-nine
wells produced at an average rate of 858 BOE per day during their
first 30 days of production, while 68 wells produced at an average
rate of 713 BOE per day during their first 60 days of production
and 60 wells produced at an average rate of 658 BOE per day during
their first 90 days of production. An estimated 170 Bakken wells
and 139 Three Forks wells remain to be drilled in the field. The
Company holds interests in a total of 118,026 gross acres (69,636
net acres) in the Sanish field. Whiting's net production from the
Sanish field in the fourth quarter of 2009 averaged 11,955 BOE per
day, an increase of 14% over the third quarter 2009 average rate of
10,470 BOE per day. Our net production from the Sanish field
averaged 12,560 BOE per day in December 2009, a 19% increase from
10,565 BOE per day in September 2009 and a 68% increase from 7,495
BOE per day in December 2008. The Company recently added three
drilling rigs in the Sanish field, bringing to nine the total
number of Whiting-operated rigs in the field. Whiting has reduced
its completed well cost for Bakken wells in the Sanish field. The
reduction in costs has primarily been the result of our "Drill
Wells On Paper" (DWOP) program that applies the best practices and
best logistical planning of all our drilling and completion
contractors to produce drilling and completion efficiencies. This
has reduced the average time from spud date to rig release to below
30 days from 60 days earlier in our drilling program. The completed
well cost for our most recent wells in the Sanish field were
approximately $5 million per well, down from $8 million to $10
million per well when the development project was initiated.
Whiting completed the installation of its 17-mile oil line
connecting the Sanish field to the Enbridge pipeline in Stanley,
North Dakota. This 8-inch diameter line has a daily capacity of
approximately 65,000 barrels of oil per day. The pipeline came on
stream in late December 2009 and is currently moving approximately
10,000 barrels of oil per day. Whiting expects to have all of its
net operated oil production in the pipeline upon completion of
Enbridge's tank facility at Stanley. This is expected to occur in
June 2010. In January 2010, Enbridge Inc. increased its take-away
capacity to 161,000 barrels per day from 110,000 barrels per day
and has ongoing construction to further expand its take-away
capacity. Enbridge expects to add 30,000 barrels per day in the
first quarter of 2011 and 85,000 barrels per day in the second
quarter of 2013 for a total of 276,000 barrels per day of take-away
capacity. Whiting's Robinson Lake gas plant is currently processing
21 MMcf per day. Capacity will be expanded to 35 MMcf per day in
June 2010. Whiting owns a 50% interest in the plant. The plant
receives 25% of the net proceeds from natural gas and NGL sales. As
of February 15, 2010, sales from the plant were 16.6 MMcf of gas
and 3,146 barrels of NGLs per day, from which Whiting was netting
2.1 MMcf of gas and 393 barrels of NGLs per day from its plant
ownership. There are currently 69 Whiting-operated wells and 60
third-party wells connected to the gas gathering system. Parshall
Field. Immediately east of the Sanish field is the Parshall field,
where we own interests in 74,863 gross acres (18,412 net acres).
The Company's net production from its interests in the Parshall
field during the fourth quarter of 2009 averaged 6,675 BOE per day,
a 2% decrease from the 6,830 BOE per day average in the third
quarter of 2009. Our net production from the Parshall field
averaged 6,430 BOE per day in December 2009, a 6% decrease from
6,845 BOE per day in September 2009 and a 4% decrease from the
6,725 BOE average daily rate in December 2008. As of February 15,
2010, we have participated in 114 wells at Parshall, of which 111
are producing and three are awaiting completion. Exploration and
development in the Parshall field is currently focused on the Three
Forks formation. Increasing Production from EOR Projects Postle
Field. Production continues to increase from our Postle field,
which produces from the Morrow sandstone, in Texas County,
Oklahoma. In the fourth quarter of 2009, the field produced at an
average net rate of 8,910 BOE per day, representing a 33% increase
from the 6,720 BOE net daily rate in the fourth quarter of 2008. In
December 2009, the field produced at an average net rate of 9,200
BOE per day, Postle's highest production rate in more than 33
years. The December 2009 average daily rate represents a 2%
sequential increase over the net 9,000 BOE per day rate in
September 2009. Four of the five units in the Postle field are
currently active CO2 EOR projects. The fifth unit produces from the
Cherokee formation and is being evaluated for waterflood
reactivation. CO2 injection into the fifth unit is not currently
planned. As of February 15, 2010, there was one drilling rig and
three workover rigs active in the field. In 2009, our
Midland/Postle team was presented with a 2008 Excellence Award from
the Oil and Gas Investor for "Best Field Rejuvenation" at the
Postle field. Net production from the field has more than doubled
since Whiting acquired it in August 2005, from 4,200 BOE per day to
9,200 BOE per day in December 2009. North Ward Estes Field. Based
on further evaluations of the reservoir quality at North Ward Estes
field, Whiting has elected to expand the scope of its CO2 project
in the field to include eight phases, up from four phases
previously. Whiting now plans CO2 injection in virtually the entire
field, including the Northern Waterflood area and the Southeast
Waterflood area. In addition, Whiting has increased its planned CO2
injection volume for the field. These decisions contributed to a
59% increase in the field's probable and possible reserves, to 124
MMBOE at year-end 2009 from 78 MMBOE at year-end 2008. Reserve
estimates for the field were independently engineered. Production
continues to ramp up at our North Ward Estes field, which is
located in Ward and Winkler Counties, Texas. Production from the
field increased 6% to a net 6,955 BOE per day in the fourth quarter
of 2009 from a net 6,590 BOE per day in the fourth quarter of 2008.
The field's production averaged 7,110 BOE in December 2009, a 7%
sequential increase over the 6,635 BOE per day net rate in
September 2009. Whiting initiated CO2 injection in Phase I in May
2007 and in Phase II in March 2009. In this field, Whiting is
developing new and reactivated wells for water and CO2 injection
and production purposes. Whiting plans to install oil, gas and
water processing facilities in a total of eight phases. We estimate
that Phase III-A will be substantially complete in the fourth
quarter of 2010. As of February 15, 2010, there were 25 workover
rigs active in the field. In two separate transactions during the
fourth quarter of 2009, Whiting acquired additional royalty and
overriding royalty interests in the North Ward Estes field for a
total of $66.1 million. In aggregate, Whiting estimates that the
net production attributable to the two acquisitions is 500 BOE per
day and the proved reserves attributable to the acquired interests
is 3.8 MMBOE. In addition, Whiting estimates the probable and
possible reserves attributable to the acquired interests is 2.8
MMBOE. (Please refer to page 21 of this news release for more
information on "probable and possible" reserves.) The two
acquisitions increased the Company's average net revenue interest
in the North Ward Estes field to approximately 82.8% from 80%.
Reserves attributable to royalty and overriding royalty interests
are not burdened by operating expenses or any additional capital
costs, including CO2 costs, which are paid by the working interest
owners. Whiting estimates that the non-cost bearing nature of these
interests makes them worth approximately 33% more than working
interest barrels. Flat Rock Field. Whiting holds 22,029 gross acres
(11,454 net acres) in the Flat Rock field, located in the Uinta
Basin in Uintah County, Utah. Whiting moved a drilling rig to Flat
Rock field in early September 2009 after signing a fixed-price gas
contract for the field's production. The contract covers daily
volumes of 10 MMcf of gas from September 1, 2009 through December
31, 2014 at a wellhead price of $5.50 per Mcf. Effective January 1,
2010 through December 2011, an additional 5 MMcf of daily gas
volumes are under contract at a fixed-price of $5.38 per Mcf at the
wellhead. Whiting expects to complete an additional four Entrada
wells in the Flat Rock field in 2010. Highlighting recent
operations at the Flat Rock field was the completion of the
Company's Ute Tribal 11-30-14-20 well. This vertical well was
completed in the Dakota formation with an initial production rate
of 6.8 MMcf of gas per day on February 12, 2010. Whiting holds a
100% working interest and an 85% net revenue interest in the well.
Sulphur Creek Field. Whiting executed a similar fixed-price gas
contract for production from its Boies Ranch prospect in Rio Blanco
County, Colorado. The contract, which was effective November 1,
2009, covers daily volumes of 5 MMcf through December 31, 2010, 4
MMcf in 2011, 3 MMcf in 2012, 2 MMcf in 2013, and 1 MMcf in 2014 at
a fixed price of $5.34 at the wellhead. A consolidated schedule of
our fixed-price gas contracts can be found on page 18 of this news
release. Whiting holds 10,196 gross acres (4,455 net acres) in the
Sulphur Creek field, which is comprised of the Boies Ranch and
Jimmy Gulch prospects. As of February 15, 2010, 35 wells which were
completed in the Mesa Verde formation were producing at a net rate
of 6.0 MMcf of gas per day. At the Boies Ranch prospect, the
Company owns the surface and mineral rights, which improves the
Company's rate of return on each well drilled on the prospect. At
Boies Ranch, Whiting estimates that it has 228 remaining drilling
locations, which includes potential locations in the probable,
possible and resource categories. Downspacing in certain parts of
Boies Ranch could generate 243 additional locations, bringing the
total number of potential locations to 471. At Jimmy Gulch, we
estimate that we have 29 remaining drilling locations, including
probable and possible locations. Downspacing in Jimmy Gulch could
generate 32 additional locations, bringing the total number of
potential locations at Jimmy Gulch to 61. In aggregate, we estimate
that we may have as many as 532 potential locations at Boies Ranch
and Jimmy Gulch. New Prospect Drilling Areas Lewis & Clark
Prospect Area. As of December 31, 2009, Whiting held 213,496 gross
acres (127,761 net acres) in the Lewis & Clark area, located in
Golden Valley and Billings Counties, North Dakota. The Company has
assembled an additional 106,475 gross acres (74,606 net acres) in
the area, primarily in Stark County, North Dakota, bringing
Whiting's total acreage position in the Lewis & Clark area to
319,971 gross acres (202,367 net acres). Whiting estimates that it
has as many as 500 potential well locations on this acreage,
targeting the Three Forks formation. On November 25, 2009, Whiting
completed the Federal 32-4HBKCE flowing 1,835 barrels of oil and
811 Mcf of gas per day, or 1,970 BOE per day, during a 24-hour test
of the Three Forks formation at a vertical depth of 10,530 feet.
The well was fracture stimulated in 15 stages, all using sliding
sleeve technology. Whiting holds a working interest of 84% and a
net revenue interest of 71% in the Federal well. The Federal well
was drilled on the southwest side of the Lewis & Clark
prospect. Whiting moved a drilling rig to the Lewis & Clark
prospect in February 2010 and anticipates drilling at least 13
Three Forks wells on the prospect during 2010. Operated Drilling
and Workover Rig Count As of February 15, 2010, 12 operated
drilling rigs and 39 operated workover rigs were active on our
properties. We were also participating in the drilling of two
non-operated wells, one on the Gulf Coast and the other in the
Sanish field. The breakdown of our operated rigs is as follows:
Region Drilling Workover ------ -------- -------- Northern Rockies
Sanish Field 9 3 Lewis & Clark 1 1 Central Rockies Flat Rock
Field 1 2 CO2 Projects Postle 1 3 North Ward Estes 0 25 Permian 0 3
Mid-Continent/Michigan 0 2 -- -- Totals 12 39 We expect our
operated drilling rig count to average approximately 15 and our
operated workover rig count to average between 40 and 45 in 2010.
Other 2009 Notable Events Commercial Banking Facility. In October
2009, Whiting's bank syndicate reaffirmed our borrowing base at
$1.1 billion. At December 31, 2009, we had $160 million drawn on,
and $0.3 million in letters of credit outstanding under, the
facility, yielding availability of $939.7 million. Our debt to
total capitalization ratio was 25.6% at December 31, 2009. Given
the reduction in bank debt and continued increase in cash flows, we
were well within all financial covenants under our bank credit
agreement and bond indentures at December 31, 2009. 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. 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.
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%. As
of February 15, 2010, 28 wells under this agreement had been
drilled and completed. The remaining 23 wells are expected to be
completed by year-end 2010. Other Financial and Operating Results
The following table summarizes the Company's net production and
commodity price realizations for the quarters ended December 31,
2009 and 2008: Three Months Ended -------------------- Production
12/31/09 12/31/08 Change ---------- -------- -------- ------ Oil
and condensate (MMBbls) 4.09 3.77 8% Natural gas (Bcf) 6.76 8.03
(16%) Total equivalent (MMBOE) 5.22 5.11 2% Average Sales Price Oil
and condensate (per Bbl): Price received $65.52 $47.37 38% Effect
of crude oil hedging (1) (1.80) 1.65 ---- ---- Realized price
$63.72 $49.02 30% ====== ====== Natural gas (per Mcf): Price
received $4.88 $4.38 11% Effect of natural gas hedging (1) 0.05
0.01 ---- ---- Realized price $4.93 $4.39 12% ===== ===== (1)
Whiting realized pre-tax cash settlement losses on its crude oil
and natural gas hedges of $7.0 million during the fourth quarter of
2009. A summary of Whiting's outstanding hedges is included later
in this news release. Fourth Quarter and Full-Year 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 Twelve Months
Ended Ended December 31, December 31, ----------------
---------------- 2009 2008 2009 2008 ------ ------ ------ ------
Production (MMBOE) 5.22 5.11 20.27 17.52 Sales price, net of
hedging $56.35 $43.08 $45.01 $69.06 Lease operating expense 11.49
12.41 11.71 13.77 Production tax 4.11 3.05 3.19 5.00 General &
administrative 2.26 1.91 2.09 3.52 Exploration 4.23 1.52 2.31 1.67
Cash interest expense 2.44 2.90 2.64 3.37 Cash income tax expense
0.25 0.20 0.01 0.13 ---- ---- ---- ---- $31.57 $21.09 $23.06 $41.60
====== ====== ====== ====== During the fourth quarter, the
company-wide basis differential for crude oil compared to NYMEX was
$10.65 per barrel, which compared to $9.43 per barrel in the third
quarter of 2009. We expect our oil price differential to average
between $8.50 and $9.50 in the first quarter of 2010. Within the
Bakken, Whiting-operated production has a current differential of
approximately $7.00 per barrel. Our company-wide natural gas price
compared to NYMEX in the fourth quarter was at a premium of $0.72
per Mcf, which compared to a discount of $0.05 per Mcf in the third
quarter of 2009. We expect our natural gas to sell at a premium
price of between $0.00 and $0.30 during the first quarter of 2010.
Fourth Quarter 2009 Drilling Summary The table below summarizes
Whiting's operated and non-operated drilling activity and
exploration and development costs incurred for the three and 12
months ended December 31, 2009: Gross/Net Wells Completed
----------------------------------------- Expl. % & Dev. Non-
Total New Success Cost Producing Producing Drilling Rate (in
millions) --------- --------- -------- ------- ----------- Q409
27/9.3 7/5.1 34/14.4 79%/65% $115.4 12M09 138/51.1 7/5.1 145/56.2
95%/91% $479.8 During the fourth quarter, the following three wells
were charged to exploration expense on Whiting's income statement
as exploratory dry holes: -- Beckman Canyon 21-24D located on the
Hatfield prospect in Carbon County, Wyoming - Whiting operated this
well that tested the Tensleep formation and the Phosphoria
formation and found both zones to be wet. The company tested oil in
the Niobrara formation off the flank of the Espy structure and
demonstrated the presence of a continuous phase oil reservoir off
structure. In 2010, Whiting has planned two follow-up wells to test
the fractured Niobrara down dip. The first well will be logged and
cored and depending on that evaluation a horizontal leg may be
drilled. The initial well cost $5.0MM (Whiting's WI 100%). -- Artus
19-33 located on the Hatfield prospect in Carbon County Wyoming -
Whiting operated this well that tested the Niobrara formation
horizontally and found the fractures to be cemented. The initial
well cost $4.4 million (Whiting's WI 100%). -- Three Mile 43-18H
located on the Hatch Point prospect in San Juan County, Utah -
Whiting operated this well that tested the Cane Creek formation
horizontally and found it to be productive with initial pump test
rates of 30-50 barrels of oil per day. Those rates were not
considered commercial. The company is working on a frac technique
to access more of this reservoir. The initial well cost $8.8
million net (Whiting's WI 53.4%). Outlook for First Quarter and
Full-Year 2010 The following table provides guidance for the first
quarter and full-year 2010 based on current forecasts, including
Whiting's full-year 2010 capital budget of $830.0 million
(excluding any potential acquisition costs). Guidance ---------
First Quarter Full-Year 2010 2010 ---- ---- Production (MMBOE) 5.10
- 5.30 22.20 - 22.60 Lease operating expense per BOE $11.30 -
$11.60 $10.80 - $11.00 General and admin. expense per BOE $2.40 -
$2.60 $2.40 - $2.60 Interest expense per BOE $2.90 - $3.10 $2.80 -
$3.00 Depr., depletion and amort. per BOE $18.30 - $18.70 $19.10 -
$19.40 Prod. Taxes (% of production revenue) 7.3% - 7.7% 7.5% -
7.9% Oil price differentials to NYMEX per Bbl $8.50 - $9.50 $8.50 -
$9.00 Gas price premium to NYMEX per Mcf (1) $0.00 - $0.30 $0.00 -
$0.30 (1) Includes the effect of Whiting's fixed-price gas
contracts. Please refer to page 19 of this news release. Oil Hedges
The following summarizes Whiting's crude oil hedges as of February
16, 2010: Weighted Average As a NYMEX Price Percentage of Hedge
Contracted Volume Collar Range December 2009 Period (Bbls per
Month) (per Bbl) Oil Production ------ ---------------
-------------- -------------- 2010 Q1 565,910 $62.06 - $80.45 40.9%
Q2 650,643 $64.55 - $85.31 47.0% Q3 640,398 $62.59 - $84.92 46.3%
Q4 625,146 $62.64 - $86.99 45.2% 2011 Q1 369,917 $56.73 - $85.28
26.7% Q2 369,696 $56.72 - $85.26 26.7% Q3 369,479 $56.71 - $85.22
26.7% Q4 369,255 $56.69 - $85.21 26.7% 2012 Q1 339,054 $56.39 -
$86.95 24.5% Q2 338,850 $56.38 - $86.93 24.5% Q3 338,650 $56.37 -
$86.89 24.5% Q4 338,477 $56.36 - $86.88 24.5% 2013 Q1 290,000
$55.34 - $85.94 21.0% Q2 290,000 $55.34 - $85.94 21.0% Q3 290,000
$55.34 - $85.94 21.0% Oct 290,000 $55.34 - $85.94 21.0% Nov 190,000
$54.59 - $81.75 13.7% The following summarizes Whiting Petroleum
Corporation's natural gas hedges as of February 16, 2010: Weighted
Average NYMEX Price As a Percentage of Hedge Contracted Volume
Collar Range December 2009 Period (MMBtu per Month) (per MMBtu) Gas
Production ------ ---------------- ------------- ------------------
2010 Q1 43,295 $7.00 - $18.65 2.0% Q2 41,835 $6.00 - $13.20 1.9% Q3
40,555 $6.00 - $14.00 1.8% Q4 39,445 $7.00 - $14.20 1.8% 2011 Q1
38,139 $7.00 - $17.40 1.7% Q2 36,954 $6.00 - $13.05 1.7% Q3 35,855
$6.00 - $13.65 1.6% Q4 34,554 $7.00 - $14.25 1.6% 2012 Q1 33,381
$7.00 - $15.55 1.5% Q2 32,477 $6.00 - $13.60 1.5% Q3 31,502 $6.00 -
$14.45 1.4% Q4 30,640 $7.00 - $13.40 1.4% Whiting also has the
following fixed-price natural gas contracts in place as of February
16, 2010: Weighted Average As a Percentage of Hedge Contracted
Volume NYMEX Price December 2009 Period (MMBtu per Month) (per
MMBtu) Gas Production ------ ----------------- ----------------
------------------ 2010 Q1 689,000 $5.36 31.0% Q2 695,667 $5.36
31.3% Q3 702,333 $5.36 31.6% Q4 702,333 $5.36 31.6% 2011 Q1 659,000
$5.39 29.7% Q2 665,333 $5.38 30.0% Q3 649,667 $5.38 29.3% Q4
649,667 $5.38 29.3% 2012 Q1 457,000 $5.41 20.6% Q2 461,333 $5.41
20.8% Q3 465,667 $5.41 21.0% Q4 398,667 $5.46 18.0% 2013 Q1 360,000
$5.47 16.2% Q2 364,000 $5.47 16.4% Q3 368,000 $5.47 16.6% Q4
368,000 $5.47 16.6% 2014 Q1 330,000 $5.49 14.9% Q2 333,667 $5.49
15.0% Q3 337,333 $5.49 15.2% Q4 337,333 $5.49 15.2% Selected
Operating and Financial Statistics Three Months Ended Twelve Months
Ended December 31, December 31, ------------------
-------------------- 2009 2008 2009 2008 ------- ------- ------
------ Selected operating statistics Production Oil and condensate,
MBbl 4,091 3,772 15,381 12,448 Natural gas, MMcf 6,759 8,025 29,333
30,419 Oil equivalents, MBOE 5,218 5,109 20,269 17,517 Average
Prices Oil, Bbl (excludes hedging) $65.52 $47.37 $52.51 $86.99
Natural gas, Mcf (excludes hedging) $4.88 $4.38 $3.75 $7.68 Per BOE
Data Sales price (including hedging) $56.35 $43.08 $45.01 $69.06
Lease operating $11.49 $12.41 $11.71 $13.77 Production taxes $4.11
$3.05 $3.19 $5.00 Depreciation, depletion and amortization $17.86
$19.16 $19.48 $15.84 General and administrative $2.26 $1.91 $2.09
$3.52 Selected Financial Data (In thousands, except per share data)
Total revenues and other income $316,035 $223,860 $979,360
$1,222,119 Total costs and expenses $325,972 $218,633 $1,142,195
$813,299 Net income (loss) available to common shareholders
$(11,206) $(3,037) $(117,184) $252,143 Earnings (loss) per common
share, basic $(0.24) $(0.07) $(2.36) $5.96 Earnings (loss) per
common share, diluted $(0.24) $(0.07) $(2.36) $5.94 Average shares
outstanding, basic 50,845 42,323 50,044 42,310 Average shares
outstanding, diluted 50,845 42,323 50,044 42,447 Net cash provided
by operating activities $147,795 $151,577 $435,612 $763,029 Net
cash used in investing activities $(152,941) $(279,361) $(505,335)
$(1,134,947) Net cash provided by financing activities $1,246
$116,764 $72,059 $366,764 Conference Call The Company's management
will host a conference call with investors, analysts and other
interested parties on Thursday, February 25, 2010 at 11:00 a.m. EDT
(10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting's fourth quarter
and full-year 2009 financial and operating results. Please call
(866) 804-6921 (U.S./Canada) or (857) 350-1667 (International) and
enter the pass code 39760790 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 February 25, 2010. A telephonic replay will be
available beginning approximately two hours after the call on
Thursday, February 25, 2010 and continuing through Thursday, March
4, 2010. You may access this replay at (888) 286-8010 (U.S./Canada)
or (617) 801-6888 (International) and entering the pass code
30401718. 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
report, words such as we "expect," "intend," "plan," "estimate,"
"anticipate," "believe" or "should" or the negative thereof or
variations thereon or similar terminology are generally intended to
identify forward-looking statements. Such forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in, or
implied by, such statements. These risks and uncertainties include,
but are not limited to: declines in oil or natural gas prices;
impacts of the global recession and tight credit markets; our level
of success in exploitation, exploration, development and production
activities; adverse weather conditions that may negatively impact
development or production activities; the timing of our exploration
and development expenditures, including our ability to obtain CO2;
inaccuracies of our reserve estimates or our assumptions underlying
them; revisions to reserve estimates as a result of changes in
commodity prices; risks related to our level of indebtedness and
periodic redeterminations of the borrowing base under our credit
agreement; our ability to generate sufficient cash flows from
operations to meet the internally funded portion of our capital
expenditures budget; our ability to obtain external capital to
finance exploration and development operations and acquisitions;
our ability to identify and complete acquisitions and to
successfully integrate acquired businesses; unforeseen
underperformance of or liabilities associated with acquired
properties; our ability to successfully complete potential asset
dispositions; the impacts of hedging on our results of operations;
failure of our properties to yield oil or gas in commercially
viable quantities; uninsured or underinsured losses resulting from
our oil and gas operations; our inability to access oil and gas
markets due to market conditions or operational impediments; the
impact and costs of compliance with laws and regulations governing
our oil and gas operations; our ability to replace our oil and
natural gas reserves; any loss of our senior management or
technical personnel; competition in the oil and gas industry in the
regions in which we operate; risks arising out of our hedging
transactions; and other risks described under the caption "Risk
Factors" in the Company's Annual Report on Form 10K. We assume no
obligation, and disclaim any duty, to update the forward-looking
statements in the Company's Annual Report on Form 10-K. Disclosure
Regarding Reserves and Resources Whiting uses in this news release
the terms proved, probable and possible reserves. Proved reserves
are reserves which, by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be economically
producible from known reservoirs under existing economic
conditions, operating methods and government regulations prior to
the time at which contracts providing the right to operate expire,
unless evidence indicates that renewal is reasonably certain.
Probable reserves are reserves that are less certain to be
recovered than proved reserves but which, together with proved
reserves, are as likely as not to be recovered. Possible reserves
are reserves that are less certain to be recovered than probable
reserves. Estimates of probable and possible reserves which may
potentially be recoverable through additional drilling or recovery
techniques are by nature more uncertain than estimates of proved
reserves and accordingly are subject to substantially greater risk
of not actually being realized by the Company. Whiting uses in this
news release the term "total resources," which consists of
contingent and prospective resources, which SEC rules prohibit in
filings of U.S. registrants. Contingent resources are resources
that are potentially recoverable but not yet considered mature
enough for commercial development due to technological or business
hurdles. For contingent resources to move into the reserves
category, the key conditions, or contingencies, that prevented
commercial development must be clarified and removed. Prospective
resources are estimated volumes associated with undiscovered
accumulations. These represent quantities of petroleum which are
estimated to be potentially recoverable from oil and gas deposits
identified on the basis of indirect evidence but which have not yet
been drilled. This class represents a higher risk than contingent
resources since the risk of discovery is also added. For
prospective resources to become classified as contingent resources,
hydrocarbons must be discovered, the accumulations must be further
evaluated and an estimate of quantities that would be recoverable
under appropriate development projects prepared. Estimates of
resources are by nature more uncertain than reserves and
accordingly are subject to substantially greater risk of not
actually being realized by the Company. SELECTED FINANCIAL DATA For
further information and discussion on the selected financial data
below, please refer to Whiting Petroleum Corporation's Annual
Report on Form 10-K for the year ended December 31, 2009, to be
filed with the Securities and Exchange Commission. WHITING
PETROLEUM CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In
thousands) December 31, December 31, 2009 2008 ------------
------------ ASSETS CURRENT ASSETS: Cash and cash equivalents
$11,960 $9,624 Accounts receivable trade, net 152,082 123,386
Derivative assets 4,723 46,780 Prepaid expenses and other 7,260
37,284 ----- ------ Total current assets 176,025 217,074 PROPERTY
AND EQUIPMENT: Oil and gas properties, successful efforts method:
Proved properties 4,870,688 4,423,197 Unproved properties 100,706
106,436 Other property and equipment 100,833 91,099 ------- ------
Total property and equipment 5,072,227 4,620,732 Less accumulated
depreciation, depletion and amortization (1,274,121) (886,065)
--------- ------- Total property and equipment, net 3,798,106
3,734,667 --------- --------- DEBT ISSUANCE COSTS 24,672 10,779
DERIVATIVE ASSETS 8,473 38,104 OTHER LONG-TERM ASSETS 22,266 28,457
------ ------ TOTAL $4,029,542 $4,029,081 ========== ==========
WHITING PETROLEUM CORPORATION CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share and per share data)
December 31, December 31, 2009 2008 ------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $14,023 $64,610 Accrued capital expenditures 29,998 84,960
Accrued liabilities 62,891 45,359 Accrued interest 10,501 9,673 Oil
and gas sales payable 46,327 35,106 Accrued employee compensation
and benefits 22,105 41,911 Production taxes payable 21,188 20,038
Deferred gain on sale 12,966 14,650 Derivative liabilities 49,551
17,354 Deferred income taxes 11,325 15,395 Tax sharing liability
1,857 2,112 ----- ----- Total current liabilities 282,732 351,168
NON-CURRENT LIABILITIES: Long-term debt 779,585 1,239,751 Deferred
income taxes 341,037 390,902 Derivative liabilities 137,621 28,131
Production Participation Plan liability 69,433 66,166 Asset
retirement obligations 66,846 47,892 Deferred gain on sale 58,462
73,216 Tax sharing liability 20,744 21,575 Other long-term
liabilities 2,997 1,489 ----- ----- Total non-current liabilities
1,476,725 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 December 31, 2009 and
December 31, 2008, respectively, aggregate liquidation preference
of $345,000,000 3 - Common stock, $0.001 par value, 75,000,000
shares authorized; 51,363,638 issued and 50,845,374 outstanding as
of December 31, 2009, 42,582,100 issued and 42,323,336 outstanding
as of December 31, 2008 51 43 Additional paid-in capital 1,546,635
971,310 Accumulated other comprehensive income 20,413 17,271
Retained earnings 702,983 820,167 ------- ------- Total
stockholders' equity 2,270,085 1,808,791 --------- --------- TOTAL
$4,029,542 $4,029,081 ========== ========== WHITING PETROLEUM
CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In
thousands, except per share data) Three Months Ended Twelve Months
Ended December 31, December 31, ------------------
------------------- 2009 2008 2009 2008 ------- -------- --------
-------- REVENUES AND OTHER INCOME: Oil and natural gas sales
$300,989 $213,821 $917,541 $1,316,480 Gain (loss) on hedging
activities 10,703 5,347 38,776 (107,555) Amortization of deferred
gain on sale 4,001 4,466 16,596 12,143 Gain on sale of properties
238 - 5,947 - Interest income and other 104 226 500 1,051 --- ---
--- ----- Total revenues and other income 316,035 223,860 979,360
1,222,119 ------- ------- ------- --------- COSTS AND EXPENSES:
Lease operating 59,927 63,382 237,270 241,248 Production taxes
21,447 15,560 64,672 87,548 Depreciation, depletion and
amortization 93,170 97,893 394,792 277,448 Exploration and
impairment 33,486 24,691 73,014 55,257 General and administrative
11,781 9,781 42,357 61,684 Interest expense 15,588 16,318 64,608
65,078 Change in Production Participation Plan liability 265 5,160
3,267 32,124 Commodity derivative (gain) loss, net 90,308 (14,152)
262,215 (7,088) ------ ------ ------- ----- Total costs and
expenses 325,972 218,633 1,142,195 813,299 ------- -------
--------- ------- INCOME (LOSS) BEFORE INCOME TAXES (9,937) 5,227
(162,835) 408,820 INCOME TAX EXPENSE (BENEFIT): Current 1,282 1,008
236 2,361 Deferred (5,404) 7,256 (56,189) 154,316 ------- -------
--------- ------- Total income tax expense (benefit) (4,122) 8,264
(55,953) 156,677 ------- ------- --------- ------- NET INCOME
(LOSS) (5,815) (3,037) (106,882) 252,143 Preferred stock dividends
(5,391) - (10,302) - ------- ------- --------- ------- NET INCOME
(LOSS) AVAILABLE TO COMMON SHAREHOLDERS $(11,206) $(3,037)
$(117,184) $252,143 ======== ======= ========= ======== EARNINGS
(LOSS) PER COMMON SHARE, BASIC $(0.24) $(0.07) $(2.36) $5.96 ======
====== ====== ===== EARNINGS (LOSS) PER COMMON SHARE, DILUTED
$(0.24) $(0.07) $(2.36) $5.94 ====== ====== ====== ===== WEIGHTED
AVERAGE SHARES OUTSTANDING, BASIC 50,845 42,323 50,044 42,310
====== ====== ====== ====== WEIGHTED AVERAGE SHARES OUTSTANDING,
DILUTED 50,845 42,323 50,044 42,447 ====== ====== ====== ======
WHITING PETROLEUM CORPORATION Reconciliation of Net Cash Provided
by Operating Activities to Discretionary Cash Flow (In thousands)
Three Months Ended December 31, ---------------------- 2009 2008
---- ---- Net cash provided by operating activities $147,795
$151,577 Exploration 22,090 7,752 Changes in working capital 20,978
(48,346) Preferred stock dividends paid (5,391) - ----- ---
Discretionary cash flow (1) $185,472 $110,983 ======== ========
Twelve Months Ended December 31, ---------------------- 2009 2008
---- ---- Net cash provided by operating activities $435,612
$763,029 Exploration 46,875 29,302 Changes in working capital
40,858 (47,955) Preferred stock dividends paid (10,302) - ------
--- Discretionary cash flow (1) $513,043 $744,376 ======== ========
(1) Discretionary cash flow is computed as net income plus
exploration and impairment costs, depreciation, depletion and
amortization, deferred income taxes, non-cash interest costs,
non-cash compensation plan charges, gain/loss on mark-to-market
derivatives, preferred stock dividends paid and other non-current
items less the gain on sale of properties and amortization of
deferred gain on sale. The non-GAAP measure of discretionary cash
flow is presented because management believes it provides useful
information to investors for analysis of the Company's ability to
internally fund acquisitions, exploration and development.
Discretionary cash flow should not be considered in isolation or as
a substitute for net income, income from operations, net cash
provided by operating activities or other income, cash flow or
liquidity measures under GAAP and may not be comparable to other
similarly titled measures of other companies. Whiting Petroleum
Corp. Finding Cost and Reserve Replacement Schedule 12/31/09 (1)
(in thousands) Five Years 2005-2009 2005 2006 2007 2008 2009
Total/Avg. Proved Acquisi- tion $906,208 $29,778 $8,128 $294,056
$78,800 $1,316,970 Unproved Acquisi- tion $16,124 $38,628 $13,598
$98,841 $12,872 $180,063 Develop- ment Cost $215,162 $408,828
$506,057 $914,616 $436,721 $2,481,384 Explora- tion Cost $22,532
$81,877 $56,741 $42,621 $50,970 $254,741 Change in Future Develop-
ment Cost $692,229 $267,685 $10,048 $(204,633) $423,541 $1,188,870
-------- -------- ------- --------- -------- ---------- Total
$1,852,255 $826,796 $594,572 $1,145,501 $1,002,904 $5,422,028
========== ======== ======== ========== ========== ==========
Acquisi- tion Reserves Acquisi- tion Res. - Oil (MBbl) 115,737 670
691 513 3,177 120,788 Acquisi- tion Res. - Gas (MMcf) 101,082 4,009
- 90,329 4,155 199,575 -------- -------- ------- --------- --------
---------- Total - Aqu. Res. - MBOE 132,584 1,338 691 15,568 3,870
154,051 -------- -------- ------- --------- -------- ----------
Develop- ment Reserves Develop- ment Res. - Oil (MBbl) 1,956 4,125
10,973 20,395 25,115 62,564 Develop- ment Res. - Gas (MMcf) 21,068
19,362 40,936 57,093 41,969 180,428 -------- -------- -------
--------- -------- ---------- Total - Dev. Res. - MBOE 5,467 7,352
17,796 29,911 32,109 92,634 -------- -------- ------- ---------
-------- ---------- Revisions Reserve Revisions - Oil (MBbl) 950
2,053 392 (20,851) 33,566 16,110 Reserve Revisions - Gas (MMcf)
(45,322) (57,780) 8,079 (74,689) (62,618) (232,330) --------
-------- ------- --------- -------- ---------- Total - Reserve Rev.
- MBOE (6,604) (7,577) 1,739 (33,299) 23,130 (22,612) --------
-------- ------- --------- -------- ---------- Cost Per BOE to
Acquire $6.83 $22.25 $11.76 $18.89 $20.36 $8.55 Cost per BOE to
Develop $- $- $30.02 $- $16.73(2)(3)(4)$58.63 ===== ===== ======
====== ====== ====== All-in finding cost per BOE $14.09 $742.74
$29.40 $94.05 $16.97 $24.20 ====== ======= ====== ====== ======
====== Unrisked Probable and Possible Reserves - BOE (1) 286,596
Probable and Possible Cap-Ex (1) $2,244,649 ---------- All-In Rate
(1) $15.01 ========== RESERVE REPLACE- MENT Acquisi- tion Reserves
132,584 1,338 691 15,568 3,870 154,051 Develop- ment Reserves 5,467
7,352 17,796 29,911 32,109 92,635 Reserve Revis- ions (6,604)
(7,577) 1,739 (33,299) 23,130 (22,612) ----- ----- ------ ------
------ Total New Reserves - MBOE 131,447 1,113 20,226 12,180 59,109
224,074 ===== ====== ====== ====== ======= Production (MBOE) 12,077
15,157 14,706 17,517 20,269 79,726 Reserve Replace- ment % 1088% 7%
138% 70% 292% 281% (1) See "Disclosure Regarding Reserves and
Resources" on page 22 for disclosures relating to reserves. (2)
Finding and Development (F&D) cost excluding acquisitions is
equal to $1,002,904M total - $78,800M for acquisitions = $924,104M
/ 32,109 MBOE development reserves + 23,130 MBOE reserve revisions
= $16.73/BOE. (3) F&D cost for non-proved reserves is equal to
$704,075M ($924,104M - $150,029M for EOR - $70,000M for 39 PUD
locations = $704,075M / 55,239 MBOE = $12.75/BOE. (4) F&D cost
for non-proved reserves without price effects is $704,075M / 55,239
MBOE - 17,258 MBOE (see Footnote #1 on page 4) = $18.54/BOE.
DATASOURCE: Whiting Petroleum Corporation CONTACT: John B. Kelso,
Director of Investor Relations of Whiting Petroleum Corporation,
+1-303-837-1661 or Web Site: http://www.whiting.com/
Copyright
