0001255474false00012554742021-11-032021-11-03

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 3, 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 November 3, 2021, Whiting Petroleum Corporation issued a press release announcing its financial and operating results for the third quarter ended September 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 November 3, 2021.

2

WHITING PETROLEUM CORPORATION

FORM 8-K

EXHIBIT INDEX

Exhibit

Number

    

Description

(99)

Press Release of Whiting Petroleum Corporation, dated November 3, 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: November 3, 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

November 3, 2021

Title: Investor Relations Manager

For immediate release

Phone: 303-837-1661

Email: Brandond@whiting.com

Whiting Petroleum Reports Third Quarter 2021 Financial and Operating Results

Denver, November 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

2


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.

3


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.

4


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.

5


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.

6


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

7


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

8


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.

9


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.

10


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.

11


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.

12


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.

13


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)