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November 3, 2021 at 4:05 PM EDT

Whiting Petroleum Reports Third Quarter 2021 Financial and Operating Results

DENVER--(BUSINESS WIRE)--Nov. 3, 2021-- Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced third quarter 2021 results.

Third Quarter 2021 Highlights

  • Revenue was $401 million for the quarter ending September 30, 2021
  • Net income (GAAP) was $198 million or $5.00 per diluted share
  • Adjusted net income (non-GAAP) was $142 million or $3.57 per diluted share
  • Adjusted EBITDAX (non-GAAP) was $201 million
  • September 30, 2021 net debt was $59 million (non-GAAP)

Lynn A. Peterson, President and CEO commented, “The team continues to execute on our business plan as demonstrated by the substantial cash provided by operating activities of $190 million during the quarter and $526 million for the nine-month period. The Company generated adjusted free cash flow during the quarter of $128 million and $347 million for the nine months ended September 30, 2021. Commodity prices have continued to strengthen during the year and under current prices, the Company expects to continue to generate substantial free cash flow during the fourth quarter and end the year with no debt and positive cash on our balance sheet.”

Third Quarter 2021 Results

Revenue for the third quarter of 2021 increased $49 million to $401 million when compared to the second quarter of 2021, primarily due to increased commodity prices between periods.

Net income for the third quarter of 2021 was $198 million, or $5.00 per share, as compared to a net loss of $61 million, or $1.57 per share, for the second quarter of 2021. Adjusted net income (non-GAAP) for the third quarter of 2021 was $142 million, or $3.57 per diluted share, as compared to $118 million, or $3.01 per diluted share, for the second quarter of 2021. The primary difference between net income (loss) and adjusted net income for both periods is non-cash expense related to the change in the value of the Company’s hedging portfolio. The third quarter was also affected by the gain on sale of properties related to the previously announced divestiture.

The Company’s adjusted EBITDAX (non-GAAP) for the third quarter of 2021 was $201 million compared to $176 million for the second quarter of 2021. This resulted in net cash provided by operating activities of $190 million and adjusted free cash flow (non-GAAP) of $128 million. Adjusted EBITDAX (non-GAAP) for the nine months ended September 30, 2021 was $548 million. Net cash provided by operating activities was $526 million and adjusted free cash flow (non-GAAP) was $347 million for the nine months ended September 30, 2021.

Adjusted net income, adjusted net income per share, adjusted EBITDAX and adjusted free cash flow are non-GAAP financial measures. Please refer to the end of this release for disclosures and reconciliations regarding these measures.

Production for the third quarter averaged 92.1 thousand barrels of oil equivalent per day (MBOE/d) which was consistent with the previous quarter of 92.6 MBOE/d. Oil production averaged 51.8 thousand barrels of oil per day (MBO/d) compared to 53.4 MBO/d in the second quarter 2021.

Capital expenditures in the third quarter of 2021 were $67 million compared to the second quarter 2021 spend of $58 million. During the quarter, the Company drilled 10 gross/5.6 net operated wells and turned in line 17 gross/9.1 net operated wells.

Lease operating expense (LOE) for the third quarter of 2021 was $57 million compared to $64 million in the second quarter of 2021. The decrease was primarily due to less operated expense workovers and ongoing cost reduction measures. General and administrative expenses in the third quarter of 2021 of $12 million was consistent with the second quarter of 2021. Both quarters included approximately $3 million of non-cash stock compensation costs.

Liquidity

As of September 30, 2021, the Company had a borrowing base of $750 million, borrowings of $72 million and unrestricted cash of $13 million, resulting in total liquidity of $689 million, net of outstanding letters of credit. Whiting expects to continue to fund its operations fully within operating cash flow. Based on the above guidance, the Company forecasts to be in a positive net cash position with no outstanding balance on its credit facility by the end of the 2021.

Conference Call

Whiting will host a conference call on Thursday, November 4, 2021 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the third quarter 2021 results. The call will be conducted by President and Chief Executive Officer Lynn A. Peterson, Executive Vice President Finance and Chief Financial Officer James P. Henderson, Executive Vice President Operations and Chief Operating Officer Charles J. Rimer and Investor Relations Manager Brandon Day. A question and answer session will immediately follow the discussion of the results for the quarter.

To participate in this call please dial:
Domestic Dial-in Number: (877) 328-5506
International Dial-in Number: (412) 317-5422
Webcast URL: https://dpregister.com/sreg/10160438/ed94216c08

Replay Information:
Conference ID #: 10160438
Replay Dial-In (Toll Free): (877) 344-7529 (U.S.), (855) 669-9658 (Canada)
Replay Dial-In (International): (412) 317-0088
Expiration Date: November 11, 2021

Commodity Price Hedging

The Company uses commodity hedges in order to reduce the effects of commodity price volatility and to satisfy the requirements of its credit facility. The following table summarizes Whiting’s hedging positions as of October 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

Settlement Period

 

Index

 

Derivative Instrument

 

Total Volumes

 

Units

 

Swap Price

 

Floor

 

Ceiling

Crude Oil

 

 

 

 

 

 

 

 

 

 

 

 

2021(1)

 

NYMEX WTI

 

Fixed Price Swaps

 

2,162,000

 

Bbl

 

$44.90

 

-

 

-

2021(1)

 

NYMEX WTI

 

Two-way Collars

 

1,150,000

 

Bbl

 

-

 

$42.48

 

$51.80

2022

 

NYMEX WTI

 

Fixed Price Swaps

 

2,275,000

 

Bbl

 

$69.29

 

-

 

-

2022

 

NYMEX WTI

 

Two-way Collars

 

11,204,000

 

Bbl

 

-

 

$47.07

 

$57.59

Q1-Q3 2023

 

NYMEX WTI

 

Two-way Collars

 

3,443,500

 

Bbl

 

-

 

$46.75

 

$58.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude Oil Differentials

 

 

 

 

 

 

 

 

 

 

 

 

2021(1)

 

UHC Clearbrook to NYMEX

 

Fixed Price Swaps

 

30,500

 

Bbl

 

-$1.95

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural Gas

 

 

 

 

 

 

 

 

 

 

 

 

2021(1)

 

NYMEX Henry Hub

 

Fixed Price Swaps

 

5,290,000

 

MMBtu

 

$3.16

 

-

 

-

2021(1)

 

NYMEX Henry Hub

 

Two-way Collars

 

2,760,000

 

MMBtu

 

-

 

$2.60

 

$2.79

2022

 

NYMEX Henry Hub

 

Fixed Price Swaps

 

8,009,000

 

MMBtu

 

$3.24

 

-

 

-

2022

 

NYMEX Henry Hub

 

Two-way Collars

 

17,304,000

 

MMBtu

 

-

 

$2.70

 

$3.32

Q1-Q3 2023

 

NYMEX Henry Hub

 

Two-way Collars

 

6,999,000

 

MMBtu

 

-

 

$2.42

 

$2.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Basis

 

 

 

 

 

 

 

 

 

 

 

 

2021(1)

 

NNG Ventura to NYMEX

 

Fixed Price Swaps

 

2,760,000

 

MMBtu

 

-$0.07

 

-

 

-

Q1-Q2 2022

 

NNG Ventura to NYMEX

 

Fixed Price Swaps

 

6,230,000

 

MMBtu

 

$0.51

 

-

 

-

Q1-Q2 2023

 

NNG Ventura to NYMEX

 

Fixed Price Swaps

 

4,740,000

 

MMBtu

 

$0.20

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NGL - Propane

 

 

 

 

 

 

 

 

 

 

 

 

2021(1)

 

Mont Belvieu

 

Fixed Price Swaps

 

9,660,000

 

Gallons

 

$0.78

 

-

 

-

2021(1)

 

Conway

 

Fixed Price Swaps

 

7,728,000

 

Gallons

 

$1.31

 

-

 

-

2022

 

Mont Belvieu

 

Fixed Price Swaps

 

19,110,000

 

Gallons

 

$1.08

 

-

 

-

2022

 

Conway

 

Fixed Price Swaps

 

19,110,000

 

Gallons

 

$1.17

 

-

 

-

(1) Includes settlement periods of October through December 2021.

Selected Operating and Financial Statistics

References to “Successor” refer to Whiting and its financial position and results of operations after its emergence from reorganization under chapter 11 of the Bankruptcy Code. References to “Predecessor” refer to Whiting and its financial position and results of operations on or before the emergence date (September 1, 2020).

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

 

2021

 

2021

Selected operating statistics:

 

 

 

 

 

 

Production

 

 

 

 

 

 

Oil (MBbl)

 

 

4,763

 

 

 

4,860

 

NGLs (MBbl)

 

 

1,919

 

 

 

1,793

 

Natural gas (MMcf)

 

 

10,745

 

 

 

10,666

 

Total production (MBOE)

 

 

8,472

 

 

 

8,431

 

Average prices

 

 

 

 

 

 

Oil (per Bbl):

 

 

 

 

 

 

Price received

 

$

66.54

 

 

$

63.46

 

Effect of crude oil hedging (1)

 

 

(16.57

)

 

 

(13.64

)

Realized price

 

$

49.97

 

 

$

49.82

 

Weighted average NYMEX price (per Bbl) (2)

 

$

70.55

 

 

$

66.03

 

NGLs (per Bbl):

 

 

 

 

 

 

Price received

 

$

26.81

 

 

$

15.76

 

Effect of NGL hedging (3)

 

 

(1.93

)

 

 

(0.47

)

Realized price

 

$

24.88

 

 

$

15.29

 

Natural gas (per Mcf):

 

 

 

 

 

 

Price received

 

$

2.42

 

 

$

1.25

 

Effect of natural gas hedging (4)

 

 

(0.82

)

 

 

(0.04

)

Realized price

 

$

1.60

 

 

$

1.21

 

Weighted average NYMEX price (per MMBtu) (2)

 

$

3.95

 

 

$

2.74

 

Selected operating metrics:

 

 

 

 

 

 

Sales price, net of hedging ($ per BOE)

 

$

35.75

 

 

$

33.50

 

Lease operating ($ per BOE)

 

 

6.68

 

 

 

7.61

 

Transportation, gathering, compression and other ($ per BOE)

 

 

1.04

 

 

 

0.88

 

Depreciation, depletion and amortization ($ per BOE)

 

 

6.13

 

 

 

6.12

 

General and administrative ($ per BOE)

 

 

1.41

 

 

 

1.42

 

Production and ad valorem taxes (% of sales revenue)

 

 

7

%

 

 

7

%

(1)

Whiting paid $79 million and $66 million in pre-tax cash settlements on crude oil hedges during the three months ended September 30, 2021 and June 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

(2)

Average NYMEX prices weighted for monthly production volumes.

(3)

Whiting paid $4 million and $1 million in pre-tax cash settlements on NGL hedges during the three months ended September 30, 2021 and June 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

(4)

Whiting paid $9 million and $0.4 million in pre-tax cash settlements on natural gas hedges during the three months ended September 30, 2021 and June 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Nine Months Ended September 30, 2021

 

One Month Ended September 30, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Nine Months Ended September 30, 2020

Selected operating statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (MBbl)

 

 

14,445

 

 

 

1,746

 

 

 

 

15,273

 

 

 

17,020

 

NGLs (MBbl)

 

 

5,272

 

 

 

559

 

 

 

 

4,522

 

 

 

5,081

 

Natural gas (MMcf)

 

 

31,661

 

 

 

3,631

 

 

 

 

29,667

 

 

 

33,299

 

Total production (MBOE)

 

 

24,993

 

 

 

2,910

 

 

 

 

24,740

 

 

 

27,650

 

Average prices

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (per Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

61.06

 

 

$

34.58

 

 

 

$

28.86

 

 

$

29.45

 

Effect of crude oil hedging (1)

 

 

(12.78

)

 

 

0.28

 

 

 

 

3.00

 

 

 

2.72

 

Realized price

 

$

48.28

 

 

$

34.86

 

 

 

$

31.86

 

 

$

32.17

 

Weighted average NYMEX price (per Bbl) (2)

 

$

64.78

 

 

$

39.63

 

 

 

$

38.23

 

 

$

38.37

 

NGLs (per Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

20.23

 

 

$

3.19

 

 

 

$

4.45

 

 

$

4.31

 

Effect of NGL hedging (3)

 

 

(0.86

)

 

 

-

 

 

 

 

-

 

 

 

-

 

Realized price

 

$

19.37

 

 

$

3.19

 

 

 

$

4.45

 

 

$

4.31

 

Natural gas (per Mcf):

 

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

1.90

 

 

$

(0.30

)

 

 

$

(0.06

)

 

$

(0.09

)

Effect of natural gas hedging (4)

 

 

(0.28

)

 

 

0.15

 

 

 

 

(0.01

)

 

 

0.01

 

Realized price

 

$

1.62

 

 

$

(0.15

)

 

 

$

(0.07

)

 

$

(0.08

)

Weighted average NYMEX price (per MMBtu) (2)

 

$

3.09

 

 

$

2.24

 

 

 

$

1.76

 

 

$

1.81

 

Selected operating metrics:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price, net of hedging ($ per BOE)

 

$

34.04

 

 

$

21.34

 

 

 

$

20.39

 

 

$

20.49

 

Lease operating ($ per BOE)

 

 

7.21

 

 

 

6.37

 

 

 

 

6.40

 

 

 

6.39

 

Transportation, gathering, compression and other ($ per BOE)

 

 

0.93

 

 

 

0.68

 

 

 

 

0.90

 

 

 

0.88

 

Depreciation, depletion and amortization ($ per BOE)

 

 

6.29

 

 

 

6.91

 

 

 

 

13.69

 

 

 

12.98

 

General and administrative ($ per BOE)

 

 

1.37

 

 

 

3.55

 

 

 

 

3.71

 

 

 

3.69

 

Production and ad valorem taxes (% of sales revenue)

 

 

7

%

 

 

10

%

 

 

 

9

%

 

 

9

%

(1)

Whiting paid $185 million and received $46 million in pre-tax cash settlements on crude oil hedges during the nine months ended September 30, 2021 and September 30, 2020, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

(2)

Average NYMEX prices weighted for monthly production volumes.

(3)

Whiting paid $5 million in pre-tax cash settlements on NGL hedges during the nine months ended September 30, 2021. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

(4)

Whiting paid $9 million and received $0.3 million in pre-tax cash settlements on natural gas hedges during the nine months ended September 30, 2021 and September 30, 2020, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting’s Quarterly Report on Form 10‑Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission.

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

 

2021

 

2021

Selected financial data:

 

 

 

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

Total operating revenues

 

$

401,037

 

$

351,646

 

Total operating expenses

 

 

199,304

 

 

409,431

 

Total other expense, net

 

 

3,571

 

 

3,704

 

Net income (loss)

 

 

198,162

 

 

(61,489

)

Per basic share

 

 

5.07

 

 

(1.57

)

Per diluted share

 

 

5.00

 

 

(1.57

)

Adjusted net income (1)

 

 

141,553

 

 

117,501

 

Per basic share

 

 

3.62

 

 

3.01

 

Per diluted share

 

 

3.57

 

 

3.01

 

Adjusted EBITDAX (1)

 

 

201,102

 

 

176,351

 

Net cash provided by operating activities

 

 

189,890

 

 

183,246

 

Adjusted free cash flow (1)

 

 

127,742

 

 

111,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Nine Months Ended September 30, 2021

 

One Month Ended September 30, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Nine Months Ended September 30, 2020

Selected financial data:

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues

 

$

1,060,074

 

$

61,084

 

 

$

459,004

 

 

$

520,088

 

Total operating expenses

 

 

914,489

 

 

30,877

 

 

 

4,651,298

 

 

 

4,682,175

 

Total other (income) expense, net

 

 

9,858

 

 

2,122

 

 

 

(170,459

)

 

 

(168,337

)

Net income (loss)

 

 

135,727

 

 

40,270

 

 

 

(3,965,461

)

 

 

(3,925,191

)

Per basic share (2)

 

 

3.48

 

 

1.06

 

 

 

(43.37

)

 

 

(103.16

)

Per diluted share (2)

 

 

3.44

 

 

1.06

 

 

 

(43.37

)

 

 

(103.16

)

Adjusted net income (loss) (1)

 

 

366,948

 

 

8,250

 

 

 

(209,656

)

 

 

(201,406

)

Per basic share (2)

 

 

9.42

 

 

0.22

 

 

 

(2.29

)

 

 

(5.29

)

Per diluted share (2)

 

 

9.29

 

 

0.22

 

 

 

(2.29

)

 

 

(5.29

)

Adjusted EBITDAX (1)

 

 

547,669

 

 

34,689

 

 

 

227,580

 

 

 

262,269

 

Net cash provided by operating activities

 

 

526,329

 

 

11,640

 

 

 

112,613

 

 

 

124,253

 

Adjusted free cash flow (1)

 

 

347,281

 

 

13,155

 

 

 

(132,564

)

 

 

(119,409

)

(1)

Reconciliations of net income (loss) to adjusted net income (loss) and adjusted EBITDAX and net cash provided by operating activities to adjusted free cash flow are included later in this news release.

(2)

For the combined nine months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

Successor

 

 

September 30,

 

December 31,

 

 

2021

 

2020

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

12,909

 

 

$

28,367

 

Accounts receivable trade, net

 

 

217,698

 

 

 

142,830

 

Prepaid expenses and other

 

 

14,325

 

 

 

19,224

 

Total current assets

 

 

244,932

 

 

 

190,421

 

Property and equipment:

 

 

 

 

 

 

Oil and gas properties, successful efforts method

 

 

2,166,379

 

 

 

1,812,601

 

Other property and equipment

 

 

45,671

 

 

 

74,064

 

Total property and equipment

 

 

2,212,050

 

 

 

1,886,665

 

Less accumulated depreciation, depletion and amortization

 

 

(203,628

)

 

 

(73,869

)

Total property and equipment, net

 

 

2,008,422

 

 

 

1,812,796

 

Other long-term assets

 

 

37,883

 

 

 

40,723

 

TOTAL ASSETS

 

$

2,291,237

 

 

$

2,043,940

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable trade

 

$

57,518

 

 

$

23,697

 

Revenues and royalties payable

 

 

193,474

 

 

 

151,196

 

Accrued capital expenditures

 

 

38,255

 

 

 

20,155

 

Accrued liabilities and other

 

 

35,572

 

 

 

42,007

 

Accrued lease operating expenses

 

 

22,730

 

 

 

23,457

 

Taxes payable

 

 

16,744

 

 

 

11,997

 

Derivative liabilities

 

 

299,602

 

 

 

49,485

 

Total current liabilities

 

 

663,895

 

 

 

321,994

 

Long-term debt

 

 

72,000

 

 

 

360,000

 

Asset retirement obligations

 

 

85,120

 

 

 

91,864

 

Operating lease obligations

 

 

15,550

 

 

 

17,415

 

Long-term derivative liabilities

 

 

83,355

 

 

 

9,750

 

Other long-term liabilities

 

 

2,159

 

 

 

14,113

 

Total liabilities

 

 

922,079

 

 

 

815,136

 

Commitments and contingencies

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Successor common stock, $0.001 par value, 500,000,000 shares authorized; 39,127,389 issued and outstanding as of September 30, 2021 and 38,051,125 issued and outstanding as of December 31, 2020

 

 

39

 

 

 

38

 

Additional paid-in capital

 

 

1,194,319

 

 

 

1,189,693

 

Accumulated earnings

 

 

174,800

 

 

 

39,073

 

Total equity

 

 

1,369,158

 

 

 

1,228,804

 

TOTAL LIABILITIES AND EQUITY

 

$

2,291,237

 

 

$

2,043,940

 

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

Successor

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

 

2021

 

2021

OPERATING REVENUES

 

 

 

 

 

 

Oil, NGL and natural gas sales

 

$

394,333

 

 

$

349,983

 

Purchased gas sales

 

 

6,704

 

 

 

1,663

 

Total operating revenues

 

 

401,037

 

 

 

351,646

 

OPERATING EXPENSES

 

 

 

 

 

 

Lease operating expenses

 

 

56,562

 

 

 

64,182

 

Transportation, gathering, compression and other

 

 

8,835

 

 

 

7,443

 

Purchased gas expense

 

 

5,496

 

 

 

1,178

 

Production and ad valorem taxes

 

 

28,712

 

 

 

25,669

 

Depreciation, depletion and amortization

 

 

51,927

 

 

 

51,618

 

Exploration and impairment

 

 

3,446

 

 

 

2,047

 

General and administrative

 

 

11,961

 

 

 

11,995

 

Derivative loss, net

 

 

122,559

 

 

 

255,409

 

Gain on sale of properties

 

 

(90,194

)

 

 

(10,110

)

Total operating expenses

 

 

199,304

 

 

 

409,431

 

INCOME (LOSS) FROM OPERATIONS

 

 

201,733

 

 

 

(57,785

)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Interest expense

 

 

(3,871

)

 

 

(3,981

)

Other income

 

 

300

 

 

 

277

 

Total other expense

 

 

(3,571

)

 

 

(3,704

)

NET INCOME (LOSS)

 

$

198,162

 

 

$

(61,489

)

INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

Basic

 

$

5.07

 

 

$

(1.57

)

Diluted

 

$

5.00

 

 

$

(1.57

)

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

Basic

 

 

39,121

 

 

 

39,067

 

Diluted

 

 

39,622

 

 

 

39,067

 

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Nine Months Ended September 30, 2021

 

One Month Ended September 30, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Nine Months Ended September 30, 2020

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil, NGL and natural gas sales

 

$

1,048,995

 

 

$

61,084

 

 

 

$

459,004

 

 

$

520,088

 

Purchased gas sales

 

 

11,079

 

 

 

-

 

 

 

 

-

 

 

 

-

 

Total operating revenues

 

 

1,060,074

 

 

 

61,084

 

 

 

 

459,004

 

 

 

520,088

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

180,083

 

 

 

18,526

 

 

 

 

158,228

 

 

 

176,754

 

Transportation, gathering, compression and other

 

 

23,306

 

 

 

1,980

 

 

 

 

22,266

 

 

 

24,246

 

Purchased gas expense

 

 

8,576

 

 

 

-

 

 

 

 

-

 

 

 

-

 

Production and ad valorem taxes

 

 

78,531

 

 

 

5,908

 

 

 

 

41,204

 

 

 

47,112

 

Depreciation, depletion and amortization

 

 

157,274

 

 

 

20,110

 

 

 

 

338,757

 

 

 

358,867

 

Exploration and impairment

 

 

8,115

 

 

 

4,207

 

 

 

 

4,184,830

 

 

 

4,189,037

 

General and administrative

 

 

34,247

 

 

 

10,345

 

 

 

 

91,816

 

 

 

102,161

 

Derivative (gain) loss, net

 

 

524,661

 

 

 

(30,594

)

 

 

 

(181,614

)

 

 

(212,208

)

(Gain) loss on sale of properties

 

 

(100,304

)

 

 

395

 

 

 

 

927

 

 

 

1,322

 

Amortization of deferred gain on sale

 

 

-

 

 

 

-

 

 

 

 

(5,116

)

 

 

(5,116

)

Total operating expenses

 

 

914,489

 

 

 

30,877

 

 

 

 

4,651,298

 

 

 

4,682,175

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

145,585

 

 

 

30,207

 

 

 

 

(4,192,294

)

 

 

(4,162,087

)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(12,955

)

 

 

(2,128

)

 

 

 

(73,054

)

 

 

(75,182

)

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

25,883

 

 

 

25,883

 

Interest income and other

 

 

3,097

 

 

 

6

 

 

 

 

211

 

 

 

217

 

Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

217,419

 

 

 

217,419

 

Total other income (expense)

 

 

(9,858

)

 

 

(2,122

)

 

 

 

170,459

 

 

 

168,337

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

135,727

 

 

 

28,085

 

 

 

 

(4,021,835

)

 

 

(3,993,750

)

 

INCOME TAX EXPENSE (BENEFIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

-

 

 

 

2,316

 

 

 

 

2,718

 

 

 

5,034

 

Deferred

 

 

-

 

 

 

(14,501

)

 

 

 

(59,092

)

 

 

(73,593

)

Total income tax benefit

 

 

-

 

 

 

(12,185

)

 

 

 

(56,374

)

 

 

(68,559

)

 

NET INCOME (LOSS)

 

$

135,727

 

 

$

40,270

 

 

 

$

(3,965,461

)

 

$

(3,925,191

)

 

INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (1)

 

$

3.48

 

 

$

1.06

 

 

 

$

(43.37

)

 

$

(103.16

)

Diluted (1)

 

$

3.44

 

 

$

1.06

 

 

 

$

(43.37

)

 

$

(103.16

)

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (1)

 

 

38,963

 

 

 

38,051

 

 

 

 

91,423

 

 

 

38,051

 

Diluted (1)

 

 

39,479

 

 

 

38,051

 

 

 

 

91,423

 

 

 

38,051

 

(1) For the combined nine months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

Non-GAAP Financial Measures

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income (Loss) to Adjusted Net Income

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

 

2021

 

2021

Net income (loss)

 

$

198,162

 

 

$

(61,489

)

Adjustments:

 

 

 

 

 

 

Gain on sale of properties

 

 

(90,194

)

 

 

(10,110

)

Impairment expense

 

 

2,439

 

 

 

1,250

 

Total measure of derivative loss reported under U.S. GAAP

 

 

122,559

 

 

 

255,409

 

Total net cash settlements paid on commodity derivatives during the period

 

 

(91,413

)

 

 

(67,559

)

Adjusted net income (1)

 

$

141,553

 

 

$

117,501

 

Adjusted net income per share, basic (1)

 

$

3.62

 

 

$

3.01

 

Adjusted net income per share, diluted (1)

 

$

3.57

 

 

$

3.01

 

(1)

Adjusted net income and adjusted net income per share are non-GAAP measures. Management believes they provide useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that adjusted net income is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income and adjusted net income per share should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

(in thousands, except per share data)

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Nine Months Ended September 30, 2021

 

One Month Ended September 30, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Nine Months Ended September 30, 2020

Net income (loss)

 

$

135,727

 

 

$

40,270

 

 

 

$

(3,965,461

)

 

$

(3,925,191

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred gain on sale

 

 

-

 

 

 

-

 

 

 

 

(5,116

)

 

 

(5,116

)

(Gain) loss on sale of properties

 

 

(100,304

)

 

 

395

 

 

 

 

927

 

 

 

1,322

 

Impairment expense

 

 

5,130

 

 

 

-

 

 

 

 

4,161,885

 

 

 

4,161,885

 

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

(25,883

)

 

 

(25,883

)

Total measure of derivative (gain) loss reported under U.S. GAAP

 

 

524,661

 

 

 

(30,594

)

 

 

 

(181,614

)

 

 

(212,208

)

Total net cash settlements received (paid) on commodity derivatives during the period

 

 

(198,266

)

 

 

1,031

 

 

 

 

45,483

 

 

 

46,514

 

Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

(217,419

)

 

 

(217,419

)

Restructuring and other one-time costs (1)

 

 

-

 

 

 

9,333

 

 

 

 

32,888

 

 

 

42,221

 

Tax impact of basis difference for Whiting Canadian Holding Company ULC

 

 

-

 

 

 

(12,185

)

 

 

 

(55,346

)

 

 

(67,531

)

Adjusted net income (loss) (2)

 

$

366,948

 

 

$

8,250

 

 

 

$

(209,656

)

 

$

(201,406

)

Adjusted net income (loss) per share, basic (2)(3)

 

$

9.42

 

 

$

0.22

 

 

 

$

(2.29

)

 

$

(5.29

)

Adjusted net income (loss) per share, diluted (2)(3)

 

$

9.29

 

 

$

0.22

 

 

 

$

(2.29

)

 

$

(5.29

)

(1)

Includes severance and restructuring charges incurred during a company restructuring in September 2020, cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to and after emerging from chapter 11 bankruptcy and a litigation settlement.

(2)

Adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP measures. Management believes they provide useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) and adjusted net income (loss) per share should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

(3)

For the combined nine months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

 

 WHITING PETROLEUM CORPORATION

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDAX

(in thousands)

 

 

Successor

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

 

2021

 

2021

Net income (loss)

 

$

198,162

 

 

$

(61,489

)

Interest expense

 

 

3,871

 

 

 

3,981

 

Interest income

 

 

-

 

 

 

(1

)

Depreciation, depletion and amortization

 

 

51,927

 

 

 

51,618

 

Total measure of derivative loss reported under U.S. GAAP

 

 

122,559

 

 

 

255,409

 

Total cash settlements (paid) on commodity derivatives during the period

 

 

(91,413

)

 

 

(67,559

)

Non-cash stock-based compensation

 

 

2,744

 

 

 

2,455

 

Impairment expense

 

 

2,439

 

 

 

1,250

 

(Gain) on sale of properties

 

 

(90,194

)

 

 

(10,110

)

Adjusted EBITDA (1)

 

 

200,095

 

 

 

175,554

 

Exploration expense

 

 

1,007

 

 

 

797

 

Adjusted EBITDAX (1)

 

$

201,102

 

 

$

176,351

 

(1)

Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. These measures are presented because management believes they provide useful information to investors for analysis of the Company’s performance. Adjusted EBITDA and Adjusted EBITDAX should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDAX

(in thousands)

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Nine Months Ended September 30, 2021

 

One Month Ended September 30, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Nine Months Ended September 30, 2020

Net income (loss)

 

$

135,727

 

 

$

40,270

 

 

 

$

(3,965,461

)

 

$

(3,925,191

)

Interest expense

 

 

12,955

 

 

 

2,128

 

 

 

 

73,054

 

 

 

75,182

 

Interest income

 

 

(1

)

 

 

(6

)

 

 

 

(211

)

 

 

(217

)

Income tax benefit

 

 

-

 

 

 

(12,185

)

 

 

 

(56,374

)

 

 

(68,559

)

Depreciation, depletion and amortization

 

 

157,274

 

 

 

20,110

 

 

 

 

338,757

 

 

 

358,867

 

Amortization of deferred gain on sale

 

 

-

 

 

 

-

 

 

 

 

(5,116

)

 

 

(5,116

)

Total measure of derivative (gain) loss reported under U.S. GAAP

 

 

524,661

 

 

 

(30,594

)

 

 

 

(181,614

)

 

 

(212,208

)

Total cash settlements received (paid) on commodity derivatives during the period, net of premiums/costs

 

 

(198,266

)

 

 

1,031

 

 

 

 

45,483

 

 

 

46,514

 

Non-cash stock-based compensation

 

 

7,508

 

 

 

-

 

 

 

 

3,719

 

 

 

3,719

 

Impairment expense

 

 

5,130

 

 

 

-

 

 

 

 

4,161,885

 

 

 

4,161,885

 

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

(25,883

)

 

 

(25,883

)

(Gain) loss on sale of properties

 

 

(100,304

)

 

 

395

 

 

 

 

927

 

 

 

1,322

 

Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

(217,419

)

 

 

(217,419

)

Restructuring and other one-time costs (1)

 

 

-

 

 

 

9,333

 

 

 

 

32,888

 

 

 

42,221

 

Adjusted EBITDA (2)

 

 

544,684

 

 

 

30,482

 

 

 

 

204,635

 

 

 

235,117

 

Exploration expense

 

 

2,985

 

 

 

4,207

 

 

 

 

22,945

 

 

 

27,152

 

Adjusted EBITDAX (2)

 

$

547,669

 

 

$

34,689

 

 

 

$

227,580

 

 

$

262,269

 

(1)

Includes severance and restructuring charges incurred during a company restructuring in September 2020, cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to and after emerging from chapter 11 bankruptcy and a litigation settlement.

(2)

Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. These measures are presented because management believes they provide useful information to investors for analysis of the Company’s performance. Adjusted EBITDA and Adjusted EBITDAX should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

WHITING PETROLEUM CORPORATION

Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow

(in thousands)

 

 

Successor

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

 

2021

 

2021

Net cash provided by operating activities

 

$

189,890

 

 

$

183,246

 

Changes in working capital

 

 

4,788

 

 

 

(13,483

)

Accrued capital expenditures

 

 

(66,936

)

 

 

(58,468

)

Adjusted free cash flow (1)

 

$

127,742

 

 

$

111,295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Nine Months Ended September 30, 2021

 

One Month Ended September 30, 2020

 

 

Eight Months Ended August 31, 2020

 

Nine Months Ended September 30, 2020

Net cash provided by operating activities

 

$

526,329

 

 

$

11,640

 

 

 

 

112,613

 

 

 

124,253

 

Changes in working capital

 

 

1,958

 

 

 

5,004

 

 

 

 

(59,815

)

 

 

(54,811

)

Accrued capital expenditures

 

 

(181,006

)

 

 

(3,489

)

 

 

 

(185,362

)

 

 

(188,851

)

Adjusted free cash flow (1)

 

$

347,281

 

 

$

13,155

 

 

 

$

(132,564

)

 

$

(119,409

)

(1)

Adjusted free cash flow is a non-GAAP measure. This measure is presented because management believes it provides useful information to investors for analysis of the Company’s ability to internally fund acquisitions and development activity and reduce its borrowings outstanding under its revolving credit facility. This measure should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies. The Company is unable to present a reconciliation of forward-looking adjusted free cash flow because components of the calculation, including fluctuations in working capital accounts, are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. The Company believes that forward-looking estimates of adjusted free cash flow are important to investors because they assist in the analysis of its ability to generate cash from our operations.

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company engaged in the development, production and acquisition of crude oil, NGLs and natural gas primarily in the Rocky Mountains region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Montana. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

Forward-Looking Statements

This news release contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected production, cash flows, revenues, costs, capital expenditures and debt levels, the effect of acquisitions and divestitures and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as “guidance,” or “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.

These risks and uncertainties include, but are not limited to, risks associated with:

  • declines in, or extended periods of low oil, NGL or natural gas prices;
  • the occurrence of epidemic or pandemic diseases, including the coronavirus pandemic;
  • actions of the Organization of Petroleum Exporting Countries and other oil exporting nations to set and maintain production levels;
  • the impacts of hedging on our results of operations;
  • regulatory developments, including the potential shutdown of the Dakota Access Pipeline and new or amended federal, state and local initiatives relating to the regulation of hydraulic fracturing, air emissions and other aspects of oil and gas operations that could have a negative effect on the oil and gas industry and/or increase costs of compliance;
  • the geographic concentration of our operations;
  • our inability to access oil and gas markets due to market conditions or operational impediments;
  • adequacy of midstream and downstream transportation capacity and infrastructure;
  • shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services;
  • adverse weather conditions that may negatively impact development or production activities;
  • potential losses and claims resulting from our oil and gas operations, including uninsured or underinsured losses;
  • lack of control over non-operated properties;
  • cybersecurity attacks or failures of our telecommunication and other information technology infrastructure;
  • revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors;
  • inaccuracies of our reserve estimates or our assumptions underlying them;
  • impact of negative shifts in investor sentiment and public perception towards the oil and gas industry and corporate governance standards;
  • climate change issues;
  • litigation and other legal proceedings; and
  • other risks described under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2020.

We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.

Company Contact: Brandon Day
Title: Investor Relations Manager
Phone: 303‑837‑1661
Email: Brandond@whiting.com

 

Source: Whiting Petroleum Corporation