0001255474false00012554742021-08-042021-08-04

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):

August 4, 2021

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 August 4, 2021, Whiting Petroleum Corporation issued a press release announcing its financial and operating results for the second quarter ended June 30, 2021 and providing certain guidance for full-year 2021. 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 August 4, 2021.

2

WHITING PETROLEUM CORPORATION

FORM 8-K

EXHIBIT INDEX

Exhibit

Number

    

Description

(99)

Press Release of Whiting Petroleum Corporation, dated August 4, 2021.

(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: August 4, 2021

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

August 4, 2021

Title: Investor Relations Manager

For immediate release

Phone: 303-837-1661

Email: Brandond@whiting.com

Whiting Petroleum Reports Second Quarter 2021 Financial and Operating Results

Denver, August 4, 2021 – Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced second quarter 2021 results.  

Second Quarter 2021 Highlights

Revenue was $352 million for the quarter ending June 30, 2021
Net loss (GAAP) was $62 million or $1.57 per diluted share
Adjusted net income (non-GAAP) was $118 million or $3.01 per diluted share
Adjusted EBITDAX (non-GAAP) was $176 million
June 30, 2021 net debt of $98 million (non-GAAP)

Lynn A. Peterson, President and CEO commented, "Our team is delivering positive results and the economic conditions continue to be in our favor.  We generated net cash provided by operating activities of $183 million and $111 million in adjusted free cash flow during the quarter and over $200 million through six months. We have reinvested approximately a third of our EBITDAX back into our operations with the balance used to rapidly reduce our debt position.  Subsequent to the quarter, the Company announced the purchase of assets within our Sanish field in North Dakota and the divestiture of our Redtail assets in Colorado.   These transactions will increase our inventory life with higher return locations and will better focus our asset portfolio.  These transactions show the flexibility provided by Whiting’s balance sheet, liquidity and cash flow generation.  With our operating results to date and our improving outlook for the year, we are updating our guidance for 2021 as discussed below.  We have increased our expectations for production and cash flows, while maintaining our capex investments in 2021 at the higher end of our previous guidance.”

Second Quarter 2021 Results

Revenue for the second quarter of 2021 increased $44 million to $352 million when compared to the first quarter of 2021, primarily due to increased commodity prices between periods.

Net loss for the second quarter of 2021 was $62 million, or $1.57 per share, as compared to a net loss of $0.9 million, or $0.02 per share, for the first quarter of 2021.  Adjusted net income (non-GAAP) for the second quarter of 2021 was $118 million, or $3.01 per share, as compared to $108 million, or $2.79 per share, for the first quarter of 2021.  The primary difference between net 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 Company’s adjusted EBITDAX (non-GAAP) for the second quarter of 2021 was $176 million compared to $170 million for the first quarter of 2021.  This resulted in net cash provided by operating activities of $183 million and adjusted free cash flow (non-GAAP) of $111 million.

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 averaged 92.6 thousand barrels of oil equivalent per day (MBOE/d) and oil production averaged 53.4 thousand barrels of oil per day (MBO/d).  Total production benefited from better than forecasted well performance and increased ethane recoveries from our processed natural gas.

Capital expenditures in the second quarter of 2021 were $58 million compared to the first quarter 2021 spend of $56 million.  During the quarter, the Company drilled 9 gross/5.6 net operated wells and turned in line 9 gross/5.4 net operated wells. The Company currently has one drilling rig and one completion crew operating in its Sanish Field in North Dakota.

Lease operating expense (LOE) for the second quarter of 2021 was $64 million compared to $59 million in the first quarter of 2021. The increase was primarily due to an increase in well workover costs and certain variable expenses associated with increased activity and production.  General and administrative expenses in the second quarter of 2021 of $12 million was a slight increase from the first quarter of 2021 of $10 million.  Both quarters included approximately $2.4 million of non-cash stock compensation costs.

During the second quarter, oil differentials improved reflecting a more certain expectation of continued DAPL operations during the EIS.  Additionally, as basin total production levels remained relatively flat, there was decreased utilization of pipeline capacity further supporting narrowed differentials.

Full-Year 2021 Guidance

Based on the Company’s increased expectations for the remainder of the year along with the outperformance in the first half of 2021, Whiting adjusted its guidance parameters as shown in the following table.  This guidance includes the effect of its previously announced acquisition and divestiture.

Previous Guidance

Updated Guidance

Production (MBOE per day)

82 - 88

88 - 92

Oil production (MBO per day)

48 - 52

50 - 53

Capital expenditures (MM)

$ 228 - $ 252

$ 240 - $ 252

Lease operating expense (MM)

$ 220 - $ 245

$ 235 - $ 245

General and administrative cash expense (MM) (1)

$ 48 - $ 52

$ 41 - $ 45

Oil price wellhead differential to NYMEX per Bbl (2)

$ 6.00 - $ 8.00

$ 4.50 - $ 6.50


(1) Net of allocations to LOE and reimbursable costs and excludes non-cash equity compensation expense

(2) Includes gathering, transportation and compression

As a result of this updated guidance along with WTI oil price of $60 per barrel, the Company now expects to generate over $700 million of EBITDAX and over $425 million of adjusted free cash flow in 2021.

2


Liquidity

As of June 30, 2021, the Company had a borrowing base of $750 million, borrowings of $115 million and unrestricted cash of $17 million, resulting in total liquidity of $650 million, net of outstanding letters of credit.  Whiting expects to continue to fund its operations and its previously announced acquisition fully within operating cash flow and proceeds from its divestiture.  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, August 5, 2021 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the second 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 (Toll Free U.S. & International): (877) 328-5506, (412) 317-5422 (International)
Webcast URL
: https://dpregister.com/sreg/10158599/eb183f25dc

Replay Information:
Conference ID #: 10158599
Replay Dial-In (Toll Free U.S. & International): (877) 344-7529 (U.S.), (412) 317-0088 (International)
Expiration Date: August 13, 2021

3


Commodity Price Hedging

Whiting currently has approximately 74% of its forecasted crude oil production and 71% of its forecasted natural gas production hedged for the remainder of 2021.  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 July 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

3,588,000

Bbl

$45.40

-

-

2021(1)

NYMEX WTI

Two-way Collars

3,162,000

Bbl

-

$41.64

$50.50

Q1 2022

NYMEX WTI

Fixed Price Swaps

630,000

Bbl

$54.30

-

-

2022

NYMEX WTI

Two-way Collars

9,559,000

Bbl

-

$43.22

$53.70

Q1-Q3 2023

NYMEX WTI

Two-way Collars

3,443,500

Bbl

-

$47.87

$62.53

Total

20,382,500

Crude Oil Differentials

2021(1)

UHC Clearbrook to NYMEX

Fixed Price Swaps

76,500

Bbl

-$1.95

-

-

Total

76,500

Natural Gas

2021(1)

NYMEX Henry Hub

Fixed Price Swaps

8,970,000

MMBtu

$2.81

-

-

2021(1)

NYMEX Henry Hub

Two-way Collars

5,520,000

MMBtu

-

$2.60

$2.79

Q1-Q3 2022

NYMEX Henry Hub

Fixed Price Swaps

5,259,000

MMBtu

$2.68

-

-

2022

NYMEX Henry Hub

Two-way Collars

11,824,000

MMBtu

-

$2.40

$2.90

Q1-Q3 2023

NYMEX Henry Hub

Two-way Collars

6,999,000

MMBtu

-

$2.41

$2.94

Total

38,572,000

Natural Gas Basis

2021(1)

NNG Ventura to NYMEX

Fixed Price Swaps

3,680,000

MMBtu

-$0.18

-

-

Q1-Q2 2022

NNG Ventura to NYMEX

Fixed Price Swaps

3,530,000

MMBtu

$0.14

-

-

Q1-Q2 2023

NNG Ventura to NYMEX

Fixed Price Swaps

4,740,000

MMBtu

$0.07

-

-

Total

11,950,000

NGL - Propane

2021(1)

Mont Belvieu

Fixed Price Swaps

19,320,000

Gallons

$0.78

-

-

Q1 2022

Mont Belvieu

Fixed Price Swaps

3,780,000

Gallons

$0.81

-

-

Total

23,100,000


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

4


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

June 30, 2021

March 31, 2021

Selected operating statistics:

Production

Oil (MBbl)

4,860

4,822

NGLs (MBbl)

1,793

1,559

Natural gas (MMcf)

10,666

10,249

Total production (MBOE)

8,431

8,090

Average prices

Oil (per Bbl):

Price received

$

63.46

$

53.24

Effect of crude oil hedging (1)

(13.64)

(8.16)

Realized price

$

49.82

$

45.08

Weighted average NYMEX price (per Bbl) (2)

$

66.03

$

57.83

NGLs (per Bbl):

Price received

$

15.76

$

17.28

Effect of NGLs hedging (3)

(0.47)

-

Realized price

$

15.29

$

17.28

Natural gas (per Mcf):

Price received

$

1.25

$

2.05

Effect of natural gas hedging (4)

(0.04)

0.01

Realized price

$

1.21

$

2.06

Weighted average NYMEX price (per MMBtu) (2)

$

2.74

$

2.56

Selected operating metrics:

Sales price, net of hedging ($ per BOE)

$

33.50

$

32.80

Lease operating ($ per BOE)

7.61

7.34

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

0.88

0.87

Depreciation, depletion and amortization ($ per BOE)

6.12

6.64

General and administrative ($ per BOE)

1.42

1.27

Production and ad valorem taxes (% of sales revenue)

7%

8%


(1)

Whiting paid $66 million and $39 million in pre-tax cash settlements on crude oil hedges during the three months ended June 30, 2021 and March 31, 2021, respectively.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(2)

Average NYMEX prices weighted for monthly production volumes.

(3)

Whiting paid $0.8 million in pre-tax cash settlements on NGL hedges during the three months ended June 30, 2021.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(4)

Whiting paid $0.4 million in pre-tax cash settlements on natural gas hedges during the three months ended June 30, 2021.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

5


Successor

Predecessor

Six Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

Selected operating statistics:

Production

Oil (MBbl)

9,682

11,811

NGLs (MBbl)

3,353

3,440

Natural gas (MMcf)

20,916

22,562

Total production (MBOE)

16,521

19,011

Average prices

Oil (per Bbl):

Price received

$

58.37

$

27.42

Effect of crude oil hedging (1)

(10.91)

3.91

Realized price

$

47.46

$

31.33

Weighted average NYMEX price (per Bbl) (2)

$

61.95

$

37.25

NGLs (per Bbl):

Price received

$

16.47

$

3.27

Effect of NGLs hedging (3)

(0.26)

-

Realized price

$

16.21

$

3.27

Natural gas (per Mcf):

Price received

$

1.64

$

0.06

Effect of natural gas hedging (4)

(0.02)

-

Realized price

$

1.62

$

0.06

Weighted average NYMEX price (per MMBtu) (2)

$

2.65

$

1.77

Selected operating metrics:

Sales price, net of hedging ($ per BOE)

$

33.16

$

20.13

Lease operating ($ per BOE)

7.48

6.61

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

0.88

0.95

Depreciation, depletion and amortization ($ per BOE)

6.38

14.07

General and administrative ($ per BOE)

1.35

3.96

Production and ad valorem taxes (% of sales revenue)

8%

9%


(1)

Whiting paid $106 million and received $46 million in pre-tax cash settlements on crude oil hedges during the six months ended June 30, 2021 and June 30, 2020, respectively.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(2)

Average NYMEX prices weighted for monthly production volumes.

(3)

Whiting paid $0.8 million in pre-tax cash settlements on NGL hedges during the six months ended June 30, 2021.  A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(4)

Whiting paid $0.4 million in pre-tax cash settlements on natural gas hedges during the six months ended June 30, 2021. A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

6


Selected Financial Data

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

Successor

Three Months Ended

June 30, 2021

March 31, 2021

Selected financial data:

(In thousands, except per share data)

Total operating revenues

$

351,646

$

307,391

Total operating expenses

409,431

305,754

Total other expense, net

3,704

2,583

Net loss

(61,489)

(946)

Per basic share

(1.57)

(0.02)

Per diluted share

(1.57)

(0.02)

Adjusted net income (1)

117,501

107,894

Per basic share

3.01

2.79

Per diluted share

3.01

2.79

Adjusted EBITDAX (1)

176,351

170,216

Net cash provided by operating activities

183,246

153,193

Adjusted free cash flow (1)

111,295

108,244

Successor

Predecessor

Six Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

Selected financial data:

(In thousands, except per share data)

Total operating revenues

$

659,037

$

336,446

Total operating expenses

715,185

4,462,827

Total other expense, net

6,287

77,533

Net loss

(62,435)

(4,202,886)

Per basic share

(1.61)

(45.98)

Per diluted share

(1.61)

(45.98)

Adjusted net income (loss) (1)

225,395

(188,526)

Per basic share

5.80

(2.06)

Per diluted share

5.80

(2.06)

Adjusted EBITDAX (1)

346,567

162,814

Net cash provided by operating activities

336,439

67,262

Adjusted free cash flow (1)

219,539

(119,887)


(1)

Reconciliations of net 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.

7


WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share and per share data)

Successor

June 30,

December 31,

2021

2020

ASSETS

Current assets:

Cash, cash equivalents and restricted cash

$

19,053

$

28,367

Accounts receivable trade, net

214,223

142,830

Prepaid expenses and other

14,740

19,224

Total current assets

248,016

190,421

Property and equipment:

Oil and gas properties, successful efforts method

1,929,550

1,812,601

Other property and equipment

68,443

74,064

Total property and equipment

1,997,993

1,886,665

Less accumulated depreciation, depletion and amortization

(177,084)

(73,869)

Total property and equipment, net

1,820,909

1,812,796

Other long-term assets

39,189

40,723

TOTAL ASSETS

$

2,108,114

$

2,043,940

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable trade

$

51,786

$

23,697

Revenues and royalties payable

191,248

151,196

Accrued capital expenditures

22,877

20,155

Accrued liabilities and other

35,143

42,007

Accrued lease operating expenses

28,642

23,457

Taxes payable

16,712

11,997

Derivative liabilities

265,130

49,485

Total current liabilities

611,538

321,994

Long-term debt

115,000

360,000

Asset retirement obligations

93,276

91,864

Operating lease obligations

16,265

17,415

Long-term derivative liabilities

89,354

9,750

Other long-term liabilities

12,909

14,113

Total liabilities

938,342

815,136

Commitments and contingencies

Equity:

Successor common stock, $0.001 par value, 500,000,000 shares authorized; 39,091,073 issued and outstanding as June 30, 2021 and 38,051,125 issued and outstanding as of December 31, 2020

39

38

Additional paid-in capital

1,193,095

1,189,693

Accumulated earnings (deficit)

(23,362)

39,073

Total equity

1,169,772

1,228,804

TOTAL LIABILITIES AND EQUITY

$

2,108,114

$

2,043,940

8


WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Three Months Ended

June 30, 2021

March 31, 2021

OPERATING REVENUES

Oil, NGL and natural gas sales

$

349,983

$

304,679

Purchased gas sales

1,663

2,712

Total operating revenues

351,646

307,391

OPERATING EXPENSES

Lease operating expenses

64,182

59,339

Transportation, gathering, compression and other

7,443

7,028

Purchased gas expense

1,178

1,902

Production and ad valorem taxes

25,669

24,150

Depreciation, depletion and amortization

51,618

53,729

Exploration and impairment

2,047

2,622

General and administrative

11,995

10,291

Derivative loss, net

255,409

146,693

Gain on sale of properties

(10,110)

-

Total operating expenses

409,431

305,754

INCOME (LOSS) FROM OPERATIONS

(57,785)

1,637

OTHER INCOME (EXPENSE)

Interest expense

(3,981)

(5,103)

Other income

277

2,520

Total other expense

(3,704)

(2,583)

NET LOSS

$

(61,489)

$

(946)

LOSS PER COMMON SHARE

Basic

$

(1.57)

$

(0.02)

Diluted

$

(1.57)

$

(0.02)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

39,067

38,698

Diluted

39,067

38,698

9


WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

Six Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

OPERATING REVENUES

Oil, NGL and natural gas sales

$

654,662

$

336,446

Purchased gas sales

4,375

-

Total operating revenues

659,037

336,446

OPERATING EXPENSES

Lease operating expenses

123,521

125,582

Transportation, gathering, compression and other

14,471

18,007

Purchased gas expense

3,080

-

Production and ad valorem taxes

49,819

30,842

Depreciation, depletion and amortization

105,347

267,517

Exploration and impairment

4,669

4,174,613

General and administrative

22,286

75,303

Derivative (gain) loss, net

402,102

(224,739)

Gain on sale of properties

(10,110)

(353)

Amortization of deferred gain on sale

-

(3,945)

Total operating expenses

715,185

4,462,827

LOSS FROM OPERATIONS

(56,148)

(4,126,381)

OTHER INCOME (EXPENSE)

Interest expense

(9,084)

(61,675)

Gain on extinguishment of debt

-

25,883

Interest income and other

2,797

72

Reorganization items

-

(41,813)

Total other expense

(6,287)

(77,533)

LOSS BEFORE INCOME TAXES

(62,435)

(4,203,914)

INCOME TAX EXPENSE (BENEFIT)

Current

-

2,718

Deferred

-

(3,746)

Total income tax benefit

-

(1,028)

NET LOSS

$

(62,435)

$

(4,202,886)

LOSS PER COMMON SHARE

Basic

$

(1.61)

$

(45.98)

Diluted

$

(1.61)

$

(45.98)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,883

91,409

Diluted

38,883

91,409

10


Non-GAAP Financial Measures

WHITING PETROLEUM CORPORATION

Reconciliation of Net Loss to Adjusted Net Income

(in thousands, except per share data)

Successor

Three Months Ended

June 30, 2021

March 31, 2021

Net loss

$

(61,489)

$

(946)

Adjustments:

Gain on sale of properties

(10,110)

-

Impairment expense

1,250

1,441

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

255,409

146,693

Total net cash settlements paid on commodity derivatives during the period

(67,559)

(39,294)

Adjusted net income (1)

$

117,501

$

107,894

Adjusted net income per share, basic (1)

$

3.01

$

2.79

Adjusted net income per share, diluted (1)

$

3.01

$

2.79


(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.

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WHITING PETROLEUM CORPORATION

Reconciliation of Net Loss to Adjusted Net Income

(in thousands, except per share data)

Successor

Predecessor

Six Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

Net loss

$

(62,435)

$

(4,202,886)

Adjustments:

Amortization of deferred gain on sale

-

(3,945)

Gain on sale of properties

(10,110)

(353)

Impairment expense

2,691

4,154,369

Gain on extinguishment of debt

-

(25,883)

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

402,102

(224,739)

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

(106,853)

46,214

Reorganization items, net

-

41,813

Restructuring and other one-time costs (1)

-

26,884

Adjusted net income (loss) (2)

$

225,395

$

(188,526)

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

$

5.80

$

(2.06)

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

$

5.80

$

(2.06)


(1)

Includes cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to filing for chapter 11 bankruptcy and charges related to a legal 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.

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WHITING PETROLEUM CORPORATION

Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDAX

(in thousands)

Successor

Three Months Ended

June 30, 2021

March 31, 2021

Net loss

$

(61,489)

$

(946)

Interest expense

3,981

5,103

Interest income

(1)

-

Depreciation, depletion and amortization

51,618

53,729

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

255,409

146,693

Total cash settlements paid on commodity derivatives during the period

(67,559)

(39,294)

Non-cash stock-based compensation

2,455

2,309

Impairment expense

1,250

1,441

Gain on sale of properties

(10,110)

-

Adjusted EBITDA (1)

175,554

169,035

Exploration expense

797

1,181

Adjusted EBITDAX (1)

$

176,351

$

170,216


(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.

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WHITING PETROLEUM CORPORATION

Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDAX

(in thousands)

Successor

Predecessor

Six Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

Net loss

$

(62,435)

$

(4,202,886)

Interest expense

9,084

61,675

Interest income

(1)

-

Income tax benefit

-

(1,028)

Depreciation, depletion and amortization

105,347

267,517

Amortization of deferred gain on sale

-

(3,945)

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

402,102

(224,739)

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

(106,853)

46,214

Non-cash stock-based compensation

4,764

2,932

Impairment expense

2,691

4,154,369

Gain on extinguishment of debt

-

(25,883)

Gain on sale of properties

(10,110)

(353)

Reorganization items, net

-

41,813

Restructuring and other one-time costs (1)

-

26,884

Adjusted EBITDA (2)

344,589

142,570

Exploration expense

1,978

20,244

Adjusted EBITDAX (2)

$

346,567

$

162,814


(1)

Includes cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to filing for chapter 11 bankruptcy and charges related to a legal 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.

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WHITING PETROLEUM CORPORATION

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

(in thousands)

Successor

Three Months Ended

June 30, 2021

March 31, 2021

Net cash provided by operating activities

$

183,246

$

153,193

Changes in working capital

(13,483)

10,653

Capital expenditures

(58,468)

(55,602)

Adjusted free cash flow (1)

$

111,295

$

108,244

Successor

Predecessor

Six Months Ended

Six Months Ended

June 30, 2021

June 30, 2020

Net cash provided by operating activities

$

336,439

$

67,262

Changes in working capital

(2,830)

(8,553)

Capital expenditures

(114,070)

(178,596)

Adjusted free cash flow (1)

$

219,539

$

(119,887)


(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.

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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 and the Niobrara play in northeast Colorado.  The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

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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 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: risks associated with our emergence from bankruptcy; 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 potential shutdown of the Dakota Access Pipeline; our level of success in development and production activities; impacts resulting from the allocation of resources among our strategic opportunities; our ability to replace our oil and natural gas reserves; the geographic concentration of our operations; our inability to access oil and gas markets due to market conditions or operational impediments; market availability of, and risks associated with, transport of oil and gas; weakened differentials impacting the price we receive for oil and natural gas; our ability to successfully complete asset acquisitions and dispositions and the risks related thereto; the impacts of hedging on our results of operations; our ability to use net operating loss carryforwards in future periods; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; the timing of our development expenditures; properties that we acquire may not produce as projected and may have unidentified liabilities; adverse weather conditions that may negatively impact development or production activities; we may incur substantial losses and be subject to liability claims as a result of our oil and gas operations, including uninsured or underinsured losses resulting from our oil and gas operations; lack of control over non-operated properties; unforeseen underperformance of or liabilities associated with acquired properties or other strategic partnerships or investments; competition in the oil and gas industry; cybersecurity attacks or failures of our telecommunication and other information technology infrastructure; our ability to comply with debt covenants, periodic redeterminations of the borrowing base under our Credit Agreement and our ability to generate sufficient cash flows from operations to service our indebtedness; our ability to generate sufficient cash flows from operations to meet the internally funded portion of our capital expenditures budget; 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; impacts to financial statements as a result of impairment write-downs and other cash and noncash charges; the impact of negative shifts in investor sentiment towards the oil and gas industry; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; the Biden administration could enact regulations that impose more onerous permitting and other costly environmental health and safety requirements; the impact and costs of compliance with laws and regulations governing our oil and gas operations; the potential impact of changes in laws that could have a negative effect on the oil and gas industry; impacts of local regulations, climate change issues, negative perception of our industry and corporate governance standards; negative impacts from litigation and 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.

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