0001255474false00012554742020-11-052020-11-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report

(Date of earliest

event reported):

November 5, 2020

Graphic

WHITING PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

  

001-31899

  

20-0098515

(State or other jurisdiction
of incorporation)

(Commission File
Number)

(IRS Employer
Identification No.)

1700 Lincoln Street, Suite 4700
Denver, Colorado

80203-4547

(Address of principal executive offices)

(Zip Code)

(303) 837-1661

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR §230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR §240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR §240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR §240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.001 par value

WLL

New York Stock Exchange

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02.            Results of Operations and Financial Condition.

On November 5, 2020, Whiting Petroleum Corporation issued a press release announcing its financial and operating results for the third quarter ended September 30, 2020 and providing certain guidance for full-year 2020. A copy of such press release is furnished as Exhibit 99 and is incorporated by reference herein.

Item 9.01.            Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired. Not applicable.
(b)Pro Forma Financial Information. Not applicable.
(c)Shell Company Transactions. Not applicable.
(d)Exhibits:

(99)        Press Release of Whiting Petroleum Corporation, dated November 5, 2020.

2

WHITING PETROLEUM CORPORATION

FORM 8-K

EXHIBIT INDEX

Exhibit

Number

    

Description

(99)

Press Release of Whiting Petroleum Corporation, dated November 5, 2020.

(104)

Cover Page Interactive Data File (embedded within the Inline XBRL document).

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WHITING PETROLEUM CORPORATION

Date: November 5, 2020

By:

/s/ Lynn A. Peterson

Lynn A. Peterson

President and Chief Executive Officer

4

Exhibit 99

Graphic

1700 Lincoln Street, Suite 4700

Denver, CO 80203-4547

Phone: 303-837-1661

FAX: 303-861-4023

News Release


Company Contact: Brandon Day

November 5, 2020

Title: Investor Relations Manager

For immediate release

Phone: 303-837-1661

Email: Brandond@whiting.com

Whiting Petroleum Reports Third Quarter Financial and Operating Results

Denver, November 5, 2020 – Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced third quarter 2020 results.  

Third Quarter 2020 Highlights

Revenue was $184 million for the quarter ending September 30, 2020
Net income was $278 million, or $7.30 per diluted share for the quarter ending September 30, 2020
Adjusted EBITDAX was $100 million for the quarter ending September 30, 2020 (see further discussion regarding the presentation of adjusted EBITDAX in "About Non-GAAP Financial Measures" below)
Emerged from bankruptcy with a strong balance sheet and liquidity position

On September 1, 2020 (the “Emergence Date”) the Company emerged from voluntary bankruptcy under Chapter 11 of the Bankruptcy Code.  Beginning on the Emergence Date, the Company applied fresh start accounting, which resulted in a new basis of accounting, and became a new entity for financial reporting purposes.  As a result of the application of fresh start accounting and the effects of the implementation of the Company’s chapter 11 plan of reorganization, the consolidated financial statements after September 1, 2020 are not comparable with the consolidated financial statements on or prior to that date.  References to “Successor” refer to the Whiting entity after emergence from bankruptcy on the Emergence Date.  References to “Predecessor” refer to the Whiting entity prior to emergence from bankruptcy.  References to “Successor Period” refer to the period from September 1, 2020 through September 30, 2020.  References to “Current Predecessor Quarter” and “Current Predecessor YTD Period” refer to the periods from July 1, 2020 through August 31, 2020 and January 1, 2020 through August 31, 2020, respectively.  References to “Prior Predecessor Quarter” and “Prior Predecessor YTD Period” refer to the three and nine months ended September 30, 2019, respectively.  

Although GAAP requires that we report on results for the Successor Period and the Current Predecessor Quarter and Current Predecessor YTD Period separately, our operating results are discussed below for the three and nine months ended September 30, 2020 by combining the results of the applicable Predecessor and Successor periods in order to provide the most meaningful comparison of our current results to prior periods.  Accordingly, references to “Combined Current Quarter” and “Combined Current YTD Period” refer to the three and nine months ended September 30, 2020, respectively.

Revenue for the Combined Current Quarter decreased $192 million to $184 million when comparing to the quarter ending September 30, 2019.  A decrease in total production accounted for approximately $111 million


of the change in revenue and decreases in commodity prices realized accounted for approximately $81 million of the change in revenue between periods.

Net income for the Combined Current Quarter was $278 million, or $7.30 per share, as compared to a net loss of $19 million, or $0.21 per share, in the quarter ended September 30, 2019.  Adjusted net loss for the Combined Current Quarter was $13 million or $0.34 per share.

Adjusted EBITDAX for the Combined Current Quarter was $100 million compared to $236 million for the quarter ended September 30, 2019.

2


Non-GAAP

Predecessor

Combined Three Months Ended September 30, 2020

Three Months Ended September 30, 2019

Selected operating statistics:

Production

Oil (MBbl)

5,209

7,441

NGLs (MBbl)

1,641

1,830

Natural gas (MMcf)

10,737

12,536

Total production (MBOE)

8,639

11,361

Average prices

Oil (per Bbl):

Price received

$

34.05

$

49.71

Effect of crude oil hedging (1)

0.01

1.41

Realized price (3)

$

34.06

$

51.12

Weighted average NYMEX price (per Bbl) (4)

$

40.92

$

56.43

NGLs (per Bbl):

Realized price

$

6.48

$

3.07

Natural gas (per Mcf):

Price received

$

(0.41)

$

0.03

Effect of natural gas hedging (2)

0.03

-

Realized price

$

(0.38)

$

0.03

Weighted average NYMEX price (per MMBtu) (4)

$

1.90

$

2.29

Selected operating metrics

Sales price, net of hedging ($ per BOE)

$

21.29

$

34.01

Lease operating ($ per BOE)

5.92

7.51

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

0.72

0.98

Depreciation, depletion and amortization ($ per BOE)

10.57

18.58

General and administrative ($ per BOE)

3.11

2.63

Production and ad valorem taxes (% of sales revenue)

9%

9%


(1)

Whiting received $0.04 million and $10 million in pre-tax cash settlements on crude oil hedges during the three months ended September 30, 2020 and 2019, respectively.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(2)

Whiting received $0.3 million in pre-tax cash settlements on natural gas hedges during the three months ended September 30, 2020.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(3)

Whiting’s realized prices were reduced by $2.38 per Bbl during the three months ended September 30, 2019 due deficiency payments under a contract in our Redtail field.  This contract ended in April 2020.

(4) Average NYMEX prices weighted for monthly production volumes.

3


Liquidity

Since emergence, the Company paid down approximately $25 million on its revolver.  As of September 30, 2020, the Company had $400 million outstanding on its revolver and $14 million in cash resulting in total liquidity of $364 million.  Whiting expects to fund its operations fully within operating cash flow through at least 2021.

Commodity Price Hedging

Whiting uses commodity hedges in order to reduce the effects of commodity price volatility and to adhere to the requirements of its credit facility.  As of October 30, 2020, the Company has approximately 1.9 million Bbls of oil hedged at a weighted-average floor price of approximately $39 per Bbl in 2020, approximately 8.8 million Bbls of oil hedged at a weighted-average floor price of approximately $39 per Bbl in 2021 and approximately 3.5 million Bbls of oil hedged at a weighted-average floor price of approximately $38 per Bbl in 2022.  Additionally, the Company has approximately 2.2 billion British thermal units (“Bbtu”) of natural gas hedged at a weighted-average floor price of $2.36 per million British thermal units (“MMbtu”) in 2020, approximately 23.5 Bbtu of natural gas hedged at a weighted-average floor price of $2.65 per MMbtu in 2021 and approximately 12.1 Bbtu of natural gas hedged at a weighted-average floor price of $2.38 per MMbtu in 2022.  These floor prices are the weighted-average of swaps and the floors of collared transactions.

G & A

G&A expenses decreased to $27 million in the Combined Current Quarter, which includes $15 million of specific costs related to restructuring.  This compares to $28 million in the second quarter 2020 and $30 million in the third quarter 2019, which included $11 million and $8 million of non-recurring items, respectively.

Operations

During the second quarter, the Company filed for bankruptcy, at which time all operations were suspended, except for workover operations.  This suspension of operations clearly resulted in a steep decline in production over the past two quarters.  During the third quarter of 2020, total production averaged 93.9 thousand barrels of oil equivalent per day (“MBOE/d”), of which 60% was crude oil, a decrease of 5% from the second quarter of 2020.  Production for the same period of 2019 was 123 MBOE/d.

During the third quarter the Company turned seven wells to production in the Williston Basin.  In the fourth quarter of 2020, Whiting expects to turn five additional wells to production as well as commence completion operations on another five wells at year end that will impact 2021 production. The Company expects capital expenditures of $27 million during the fourth quarter, bringing full year capital expenditures to the midpoint of guidance.  Due to the timing of wells put on production during the third and fourth quarters, combined with completion work being done near the end of the year, we anticipate fourth quarter production will decline from the third quarter.

LOE declined to $51 million in the Combined Current Quarter from $53 million in the second quarter of 2020.  This 4% decrease is primarily due to the company’s focus on saltwater disposal optimization, lower non-op spending and improved rental agreements.  This also marked a 40% decrease from the same period in 2019.  Whiting continues to focus on costs to improve margins during the current price environment.

Whiting has consistently outperformed the NDIC requirement for gas capture since the regulatory requirement began.  In September, Whiting captured 96% of its gas and continues to explore new technologies to reduce overall emissions.

4


Outlook for Full-Year 2020

The following table provides guidance for the full-year 2020 based on current forecasts.

Full-Year Guidance

2020

Production (MBOE/d)

98 - 99

Percent Oil

60%

Capital Expenditures (MM)

$ 213 - $ 218

Lease operating expense (MM)

$ 238 - $ 242

Management Comment

Lynn A. Peterson, President and CEO of WLL commented, "The past quarter saw the Company complete its restructuring work and emerge from bankruptcy in September.  The Whiting team remained extremely focused during the process and I commend all of our staff for their efforts.”

Peterson added, “We are in a challenging and volatile commodity price environment and we will continue to prioritize cash flow generation.  As we look ahead at consensus commodity prices in 2021, our goals will be 1) to maintain production levels near our 2020 exit rate, and 2) operate within internally generated cash flow, which in combination should produce an attractive free cash flow yield.  We anticipate holding 2021 spending levels in the same range as our 2020 capital expenditures to achieve these goals.  We believe this strategy will create value for the Company's stakeholders while always operating in a safe environment."

Conference Call

WLL will host a conference call on Friday, November 6, 2020 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the results.  The call will be conducted by President and CEO Lynn A. Peterson, CFO James Henderson, COO Charles J. Rimer and IR Manager Brandon Day.  A Q&A 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/10149456/dc153f7610

Replay Information:

Conference ID #:  10149456

Replay Dial-In (Toll Free US & Canada): (877) 344-7529 (U.S.), (855) 669-9658 (Canada)

Replay Dial-In (International): (412) 317-0088

Expiration Date: Friday, November 13, 2020

5


Selected Operating and Financial Statistics

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Combined Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Selected operating statistics:

Production

Oil (MBbl)

1,746

15,273

17,020

22,435

NGLs (MBbl)

559

4,522

5,081

5,709

Natural gas (MMcf)

3,631

29,667

33,299

38,167

Total production (MBOE)

2,910

24,740

27,650

34,506

Average prices

Oil (per Bbl):

Price received

$

34.58

$

28.86

$

29.45

$

50.51

Effect of crude oil hedging (1)

0.28

3.00

2.72

0.66

Realized price (3)

$

34.86

$

31.86

$

32.17

$

51.17

Weighted average NYMEX price (per Bbl) (4)

$

39.63

$

38.23

$

38.37

$

56.99

NGLs (per Bbl):

Realized price

$

3.19

$

4.45

$

4.31

$

6.09

Natural gas (per Mcf):

Price received

$

(0.30)

$

(0.06)

$

(0.09)

$

0.62

Effect of natural gas hedging (2)

0.15

(0.01)

0.01

-

Realized price

$

(0.15)

$

(0.07)

$

(0.08)

$

0.62

Weighted average NYMEX price (per MMBtu) (4)

$

2.24

$

1.76

$

1.81

$

2.62

Selected operating metrics

Sales price, net of hedging ($ per BOE)

$

21.34

$

20.39

$

20.49

$

34.96

Lease operating ($ per BOE)

6.37

6.40

6.39

7.43

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

0.68

0.90

0.88

0.93

Depreciation, depletion and amortization ($ per BOE)

6.91

13.69

12.98

17.74

General and administrative ($ per BOE)

3.55

3.71

3.69

2.82

Production and ad valorem taxes (% of sales revenue)

10%

9%

9%

9%


(1)

Whiting received $46 million and $15 million in pre-tax cash settlements on crude oil hedges during the nine months ended September 30, 2020 and 2019, respectively.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” earlier in this release.

(2)

Whiting received $0.3 million in pre-tax cash settlements on natural gas hedges during the nine months ended September 30, 2020.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” earlier in this release.

(3)

Whiting’s realized prices were reduced by $1.42 and $2.05 per Bbl during the nine months ended September 30, 2020 and 2019, respectively, due to the Redtail deficiency payments.  This contract ended in April 2020.

(4)

Average NYMEX prices weighted for monthly production volumes.

6


Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Two Months Ended August 31, 2020

Combined Three Months Ended September 30, 2020

Three Months Ended September 30, 2019

Selected financial data:

(In thousands, except per share data)

Total operating revenues

$

61,084

$

122,558

$

183,642

$

375,891

Total operating expenses

30,877

188,471

219,348

351,253

Total other (income) expense, net

2,122

(247,992)

(245,870)

43,705

Net income (loss)

40,270

237,425

277,695

(19,067)

Per basic share (1)

1.06

2.60

7.30

(0.21)

Per diluted share (1)

1.06

2.60

7.30

(0.21)

Adjusted net income (loss) (2)

8,250

(21,130)

(12,880)

(35,148)

Per basic share (1)

0.22

(0.23)

(0.34)

(0.38)

Per diluted share (1)

0.22

(0.23)

(0.34)

(0.38)

Adjusted EBITDAX (2)

34,689

64,838

99,527

235,663


(1)

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

(2)

Reconciliations of net income (loss) to adjusted net income (loss) and adjusted EBITDAX are included later in this news release.

7


Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Combined Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Selected financial data:

(In thousands, except per share data)

Total operating revenues

$

61,084

$

459,004

$

520,088

$

1,191,644

Total operating expenses

30,877

4,651,298

4,682,175

1,147,122

Total other (income) expense, net

2,122

(170,459)

(168,337)

139,574

Net income (loss)

40,270

(3,965,461)

(3,925,191)

(93,679)

Per basic share (1)

1.06

(43.37)

(103.16)

(1.03)

Per diluted share (1)

1.06

(43.37)

(103.16)

(1.03)

Adjusted net income (loss) (2)

8,250

(209,656)

(201,406)

(57,821)

Per basic share (1)

0.22

(2.29)

(5.29)

(0.63)

Per diluted share (1)

0.22

(2.29)

(5.29)

(0.63)

Adjusted EBITDAX (2)

34,689

227,580

262,269

738,176


(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.

(2)

Reconciliations of net income (loss) to adjusted net income (loss) and adjusted EBITDAX are included later in this news release.

8


Third Quarter and First Nine Month 2020 Costs and Margins

A summary of cash revenues and cash costs on a per BOE basis is as follows:

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Two Months Ended August 31, 2020

Combined Three Months Ended September 30, 2020

Three Months Ended September 30, 2019

Sales price, net of hedging

$

20.99

$

21.39

$

21.26

$

34.01

Gain (loss) on hedging activities

0.35

(0.13)

0.03

-

Lease operating expense

6.37

5.70

5.92

7.51

Transportation, gathering, compression and other

0.68

0.74

0.72

0.98

Production and ad valorem tax

2.03

1.81

1.88

3.10

Cash general & administrative

3.55

2.74

3.02

2.94

Exploration

1.45

0.47

0.80

0.73

Cash interest expense

0.60

1.33

1.09

3.56

Cash income tax expense

0.80

-

0.27

-

Cash reorganization items

-

5.32

3.53

-

$

5.86

$

3.15

$

4.06

$

15.19

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Combined Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Sales price, net of hedging

$

20.99

$

18.55

$

18.81

$

34.96

Gain (loss) on hedging activities

0.35

1.84

1.68

-

Lease operating expense

6.37

6.40

6.39

7.43

Transportation, gathering, compression and other

0.68

0.90

0.88

0.93

Production and ad valorem tax

2.03

1.67

1.70

2.98

Cash general & administrative

3.55

3.56

3.56

2.68

Exploration

1.45

0.93

0.98

0.82

Cash interest expense

0.60

2.41

2.22

3.52

Cash income tax expense

0.80

0.11

0.18

-

Cash reorganization items

-

2.31

2.07

-

$

5.86

$

2.10

$

2.51

$

16.60

9


Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 to be filed with the Securities and Exchange Commission.

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

Successor

Predecessor

September 30,

December 31,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$

13,702

$

8,652

Restricted cash

13,233

-

Accounts receivable trade, net

128,577

308,249

Prepaid expenses and other

22,056

14,082

Total current assets

177,568

330,983

Property and equipment:

Oil and gas properties, successful efforts method

1,829,472

12,812,007

Other property and equipment

72,856

178,689

Total property and equipment

1,902,328

12,990,696

Less accumulated depreciation, depletion and amortization

(19,447)

(5,735,239)

Total property and equipment, net

1,882,881

7,255,457

Other long-term assets

38,007

50,281

TOTAL ASSETS

$

2,098,456

$

7,636,721

10


WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands)

Successor

Predecessor

September 30,

December 31,

2020

2019

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable trade

$

44,171

$

80,100

Revenues and royalties payable

146,767

202,010

Accrued capital expenditures

14,809

64,263

Accrued liabilities and other

63,987

85,007

Accrued lease operating expenses

23,757

38,262

Accrued interest

1,432

53,928

Taxes payable

16,985

26,844

Total current liabilities

311,908

550,414

Long-term debt

400,328

2,799,885

Asset retirement obligations

119,262

131,208

Operating lease obligations

17,749

31,722

Deferred income taxes

-

73,593

Other long-term liabilities

19,723

24,928

Total liabilities

868,970

3,611,750

Commitments and contingencies

Equity:

Predecessor common stock, $0.001 par value, 225,000,000 shares authorized; 91,743,571 issued and 91,326,469 outstanding as of December 31, 2019

-

92

Successor common stock, $0.001 par value, 500,000,000 shares authorized; 38,051,210 issued and outstanding as of September 30, 2020

38

-

Additional paid-in capital

1,189,178

6,409,991

Accumulated earnings (deficit)

40,270

(2,385,112)

Total equity

1,229,486

4,024,971

TOTAL LIABILITIES AND EQUITY

$

2,098,456

$

7,636,721

11


WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Two Months Ended August 31, 2020

Combined Three Months Ended September 30, 2020

Three Months Ended September 30, 2019

OPERATING REVENUES

Oil, NGL and natural gas sales

$

61,084

$

122,558

$

183,642

$

375,891

OPERATING EXPENSES

Lease operating expenses

18,526

32,646

51,172

85,320

Transportation, gathering, compression and other

1,980

4,259

6,239

11,176

Production and ad valorem taxes

5,908

10,362

16,270

35,220

Depreciation, depletion and amortization

20,110

71,240

91,350

211,025

Exploration and impairment

4,207

10,217

14,424

10,890

General and administrative

10,345

16,513

26,858

29,890

Derivative (gain) loss, net

(30,594)

43,125

12,531

(30,597)

Loss on sale of properties

395

1,280

1,675

595

Amortization of deferred gain on sale

-

(1,171)

(1,171)

(2,266)

Total operating expenses

30,877

188,471

219,348

351,253

INCOME FROM OPERATIONS

30,207

(65,913)

(35,706)

24,638

OTHER INCOME (EXPENSE)

Interest expense

(2,128)

(11,379)

(13,507)

(48,447)

Gain (loss) on extinguishment of debt

-

-

-

4,598

Interest income and other

6

139

145

144

Reorganization items

-

259,232

259,232

-

Total other income (expense)

(2,122)

247,992

245,870

(43,705)

INCOME (LOSS) BEFORE INCOME TAXES

28,085

182,079

210,164

(19,067)

INCOME TAX EXPENSE (BENEFIT)

Current

2,316

-

2,316

-

Deferred

(14,501)

(55,346)

(69,847)

-

Total income tax benefit

(12,185)

(55,346)

(67,531)

-

NET INCOME (LOSS)

$

40,270

$

237,425

$

277,695

$

(19,067)

INCOME (LOSS) PER COMMON SHARE

Basic

$

1.06

$

2.60

$

7.30

$

(0.21)

Diluted

$

1.06

$

2.60

$

7.30

$

(0.21)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,051

91,464

38,051

91,299

Diluted

38,051

91,464

38,051

91,299

12


WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Combined Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

OPERATING REVENUES

Oil, NGL and natural gas sales

$

61,084

$

459,004

$

520,088

$

1,191,644

OPERATING EXPENSES

Lease operating expenses

18,526

158,228

176,754

256,384

Transportation, gathering, compression and other

1,980

22,266

24,246

32,145

Production and ad valorem taxes

5,908

41,204

47,112

102,796

Depreciation, depletion and amortization

20,110

338,757

358,867

612,166

Exploration and impairment

4,207

4,184,830

4,189,037

44,045

General and administrative

10,345

91,816

102,161

97,437

Derivative (gain) loss, net

(30,594)

(181,614)

(212,208)

7,431

Loss on sale of properties

395

927

1,322

1,681

Amortization of deferred gain on sale

-

(5,116)

(5,116)

(6,963)

Total operating expenses

30,877

4,651,298

4,682,175

1,147,122

INCOME FROM OPERATIONS

30,207

(4,192,294)

(4,162,087)

44,522

OTHER INCOME (EXPENSE)

Interest expense

(2,128)

(73,054)

(75,182)

(145,274)

Gain (loss) on extinguishment of debt

-

25,883

25,883

4,598

Interest income and other

6

211

217

1,102

Reorganization items

-

217,419

217,419

-

Total other income (expense)

(2,122)

170,459

168,337

(139,574)

INCOME (LOSS) BEFORE INCOME TAXES

28,085

(4,021,835)

(3,993,750)

(95,052)

INCOME TAX EXPENSE (BENEFIT)

Current

2,316

2,718

5,034

-

Deferred

(14,501)

(59,092)

(73,593)

(1,373)

Total income tax benefit

(12,185)

(56,374)

(68,559)

(1,373)

NET INCOME (LOSS)

$

40,270

$

(3,965,461)

$

(3,925,191)

$

(93,679)

INCOME (LOSS) PER COMMON SHARE

Basic

$

1.06

$

(43.37)

$

(103.16)

$

(1.03)

Diluted

$

1.06

$

(43.37)

$

(103.16)

$

(1.03)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,051

91,423

38,051

91,274

Diluted

38,051

91,423

38,051

91,274

13


WHITING PETROLEUM CORPORATION

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

(in thousands, except per share data)

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Two Months Ended August 31, 2020

Combined Three Months Ended September 30, 2020

Three Months Ended September 30, 2019

Net income (loss)

$

40,270

$

237,425

$

277,695

$

(19,067)

Adjustments:

Amortization of deferred gain on sale

-

(1,171)

(1,171)

(2,266)

Loss on sale of properties

395

1,280

1,675

595

Impairment expense

-

7,516

7,516

2,550

(Gain) loss on extinguishment of debt

-

-

-

(4,598)

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

(30,594)

43,125

12,531

(30,597)

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

1,031

(731)

300

10,454

Reorganization items, net

-

(259,232)

(259,232)

-

Restructuring and other one-time costs (1)

9,333

6,004

15,337

7,781

Tax impact of basis difference for Whiting Canadian Holding Company ULC

(12,185)

(55,346)

(67,531)

-

Adjusted net income (loss) (2)

$

8,250

$

(21,130)

$

(12,880)

$

(35,148)

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

$

0.22

$

(0.23)

$

(0.34)

$

(0.38)

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

$

0.22

$

(0.23)

$

(0.34)

$

(0.38)


(1)

Includes severance and restructuring charges incurred during two separate company restructurings in August 2019 and September 2020, cash retention incentives paid to Predecessor executives and directors in 2020 and third-party advisory and legal fees incurred after emerging from chapter 11 bankruptcy.

(2)

Adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP measures.  Management believes it provides useful information to investors for analysis of Whiting’s fundamental business on a recurring basis.  In addition, management believes that adjusted net income (loss) 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 three months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

14


WHITING PETROLEUM CORPORATION

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

(in thousands, except per share data)

Successor

Predecessor

Non-GAAP

Predecessor

Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Combined Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Net income (loss)

$

40,270

$

(3,965,461)

$

(3,925,191)

$

(93,679)

Adjustments:

Amortization of deferred gain on sale

-

(5,116)

(5,116)

(6,963)

Loss on sale of properties

395

927

1,322

1,681

Impairment expense

-

4,161,885

4,161,885

15,729

(Gain) loss on extinguishment of debt

-

(25,883)

(25,883)

(4,598)

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

(30,594)

(181,614)

(212,208)

7,431

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

1,031

45,483

46,514

14,797

Reorganization items, net

-

(217,419)

(217,419)

-

Restructuring and other one-time costs (1)

9,333

32,888

42,221

7,781

Tax impact of basis difference for Whiting Canadian Holding Company ULC

(12,185)

(55,346)

(67,531)

-

Adjusted net income (loss) (2)

$

8,250

$

(209,656)

$

(201,406)

$

(57,821)

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

$

0.22

$

(2.29)

$

(5.29)

$

(0.63)

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

$

0.22

$

(2.29)

$

(5.29)

$

(0.63)


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