Whiting Petroleum Is a Must Buy

Whiting Petroleum (WLL) announced its fourth quarter 2015 results on February 24th. There was serious difference in everything between the fourth quarter of 2015 and the fourth quarter of 2014. Due to this, the revenue was down to $ 423.5 million from $ 696.1 million while the adjusted net income available to the common shareholders was -$ 87.8 million, down from $ 58.3 million of the same quarter of 2014. On adjusted basis, the loss per diluted share was $ 0.43 compared to a profit of $ 0.44 in Q4 2014.

Whiting Petroleum production rate averaged 155,210 BOEs per day in the fourth quarter i.e. at the high end of its guidance despite selling 3,300 BOEs a day as a result of property sales during the quarter and 12,400 BOEs a day during the year 2015.
The increase in production rate of Whiting from 131,260 BOEs per day of the same quarter last year was driven by 22 % higher productivity per well Q-o-Q due to enhanced completion designs in the Williston Basin. The proved reserves of Whiting Petroleum increased 5 % to 821 million barrels of oil equivalent despite asset sales equivalent to almost 7 % of its year-end 2014 reserves.

Overall, Whiting Petroleum sold assets worth $ 512 million as planned. The company also seems to be in a robust liquidity position with $ 2.7 billion of liquidity and no major bond maturities until 2019 and it was well in compliance with the debt covenants at year end 2015.

Further, Whiting Petroleum has executed its cost-cutting plans very well in an effort to combat the sharp fall in oil prices in 2015. The Depreciation, Depletion & Amortization (DD&A) expenses per BOE of Whiting Petroleum dropped 20 %, Lease Operating Expenses (LOE) per BOE decreased 22 % and its G&A expenses per BOE dropped 32 % compared to the previous year.


Thus, Whiting Petroleum is in a sound financial as well as operational condition right now. And with the CAPEX control measures and the oil prices bottomed out, it is certainly going to climb higher on the Wall Street.
Published on Apr 21, 2016
By Vinay Singh

Copyrighted 2020. Content published with author's permission.

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