WLL Whiting Petroleum Corp

Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced fourth quarter 2021 results.

Fourth Quarter 2021 Highlights

• Revenue was $473 million for the quarter ending December 31, 2021
• Net income (GAAP) was $292 million or $7.34 per diluted share
• Adjusted net income (non-GAAP) was $168 million or $4.23 per diluted share
• Adjusted EBITDAX (non-GAAP) was $226 million
• Net cash provided by operating activities (GAAP) was $214 million
• Adjusted free cash flow (non-GAAP) was $156 million
• December 31, 2021 debt was $0

Lynn A. Peterson, President and CEO commented, “2021 was an eventful year as the Company had many accomplishments that strengthen us for the future. The Company generated over $500 million of adjusted free cash flow, paid off over $360 million on its revolver, spent over $120 million for acquisitions net of divestitures, and ended the year completely debt free. We divested of non-core assets in Colorado and added meaningful drilling inventory through the Company’s acquisition of working interest in its core Sanish field. The Company’s year-end reserve volumes increased 25% over the previous year driven by the significant change in commodity pricing as well as additions from our drilling program and acquisitions. As of December 31, 2021, our proved developed properties alone were valued at $3.6 billion, pre-tax and using SEC pricing of $66.56 per barrel. We recently announced our first fixed dividend that is competitive to industry peers on a yield basis, with the expectation of growing our total return of capital significantly in the coming quarters through buybacks and other strategies. We continue to develop Whiting’s strategies of value creation for the Company’s stakeholders, provide a safe environment for our employees and contractors, and advance our ESG initiatives.”

Fourth Quarter and Full Year 2021 Results

Revenue for the fourth quarter of 2021 increased $72 million to $473 million when compared to the third quarter of 2021, primarily due to increased commodity prices between periods. Revenue for the full year 2021 was $1.5 billion.

Net income for the fourth quarter of 2021 was $292 million, or $7.34 per share, as compared to $198 million, or $5.00 per share, for the third quarter of 2021. Net income for the twelve months ending December 31, 2021 was $428 million, or $10.78 per share. Adjusted net income (non-GAAP) for the fourth quarter of 2021 was $168 million, or $4.23 per diluted share, as compared to $142 million, or $3.57 per diluted share, for the third quarter of 2021. Adjusted net income (non-GAAP) for the twelve months ending December 31, 2021 was $535 million, or $13.49 per share. The primary difference between net income and adjusted net income for all 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 a previously announced divestiture.

The Company’s adjusted EBITDAX (non-GAAP) for the fourth quarter of 2021 was $226 million compared to $201 million for the third quarter of 2021. Net cash provided by operating activities was $214 million in the fourth quarter and adjusted free cash flow (non-GAAP) was $156 million. Adjusted EBITDAX (non-GAAP) for the twelve months ended December 31, 2021 was $774 million. Net cash provided by operating activities was $740 million and adjusted free cash flow (non-GAAP) was $504 million for the twelve months ended December 31, 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 fourth quarter averaged 92.8 thousand barrels of oil equivalent per day (MBOE/d) which was consistent with the previous quarter of 92.1 MBOE/d. Oil production averaged 52.9 thousand barrels of oil per day (MBO/d) compared to 51.8 MBO/d in the third quarter 2021.

Capital expenditures in the fourth quarter of 2021 were $66 million compared to the third quarter 2021 spend of $67 million. During the quarter, the Company drilled 17 gross/10.4 net operated wells and turned in line 16 gross/12.0 net operated wells. As of December 31, 2021, the Company has 34 gross (20.2 net) drilled uncompleted wells.

Lease operating expense (LOE) for the fourth quarter of 2021 was $62 million compared to $57 million in the third quarter of 2021. The increase was primarily due to more operated expense workovers and the effects of higher production. General and administrative expenses in the fourth quarter of 2021 were $15 million compared to $12 million in the third quarter 2021. Both quarters included approximately $3 million of non-cash stock compensation costs.

Liquidity

As of December 31, 2021, the Company had a borrowing base of $750 million on its revolving credit facility, no borrowings and unrestricted cash of $41 million, resulting in total liquidity of $790 million, net of outstanding letters of credit. Whiting expects to continue to fund its 2022 operations and its dividend fully within operating cash flow.

Proved Reserves

During 2021, the Company added 20.3 million barrels of oil equivalent (MMBOE) of reserves primarily due to successful drilling in the Williston Basin. Additionally, 15.9 MMBOE was added from acquisitions during the year, which was partially offset by a decrease of 10.7 MMBOE primarily due to the disposition of the Redtail field located in Colorado. As of December 31, 2021, the Company’s estimated proved reserves totaled 326.0 MMBOE. The Standardized Measure of those reserves was $3,679 million and the pre-tax PV10% of those reserves was $4,381 million, in each case using SEC pricing as noted below.

The following table summarizes our estimated proved reserves as of December 31, 2021 with the corresponding pre-tax PV10% values:

 

 

Proved Reserves (1)

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Tax

 

 

 

 

 

 

Natural

 

 

 

 

 

PV10%

 

 

Oil

 

NGLs

 

Gas

 

Total

 

%

 

Value (2)

Reserve Category

 

(MMBbl)

 

(MMBbl)

 

(Bcf)

 

(MMBOE)

 

Oil

 

(in millions)

Proved developed reserves

 

148.3

 

55.0

 

351.9

 

262.0

 

57%

 

$

3,587

Proved undeveloped reserves

 

40.3

 

11.4

 

74.1

 

64.0

 

63%

 

 

794

Total proved reserves

 

188.6

 

66.4

 

426.0

 

326.0

 

58%

 

$

4,381

Discounted future income tax expense

 

 

(702)

Standardized measure of discounted future net cash flows

 

$

3,679

(1)

 

Oil and gas reserve quantities and related discounted future net cash flows have been derived from a WTI oil price of $66.56 per Bbl and a Henry Hub gas price of $3.60 per MMBtu, which were calculated using an average of the first-day-of-the-month price for each month within the 12 months ended December 31, 2021 as required by SEC and FASB guidelines.

(2)

 

Pre-tax PV10% may be considered a non-GAAP financial measure as defined by the SEC and is derived from the standardized measure of discounted future net cash flows (the “Standardized Measure”), which is the most directly comparable GAAP financial measure. Pre-tax PV10% is computed on the same basis as the Standardized Measure but without deducting future income taxes. We believe pre-tax PV10% is a useful measure for investors when evaluating the relative monetary significance of our oil and natural gas properties. We further believe investors may utilize our pre-tax PV10% as a basis for comparison of the relative size and value of our proved reserves to other companies because many factors that are unique to each individual company impact the amount of future income taxes to be paid. Our management uses this measure when assessing the potential return on investment related to our oil and gas properties and acquisitions. However, pre-tax PV10% is not a substitute for the Standardized Measure. Our pre-tax PV10% and Standardized Measure do not purport to present the fair value of our proved oil, NGL and natural gas reserves.

Conference Call

Whiting will host a conference call on Thursday, February 24, 2022 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the fourth 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 Director 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://event.choruscall.com/mediaframe/webcast.html?webcastid=9BD9bizF

Replay Information:

Conference ID #: 4561404 Replay Dial-In (Toll Free): (877) 344-7529 (U.S.), (855) 669-9658 (Canada) Replay Dial-In (International): (412) 317-0088 Expiration Date: March 3, 2022

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 February 17, 2022:

 

 

 

 

 

 

 

 

 

 

Weighted Average

Settlement Period

 

Index

 

Derivative Instrument

 

Total Volumes

 

Units

 

Swap Price

 

Floor

 

Ceiling

Crude Oil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 (1)

 

NYMEX WTI

 

Fixed Price Swaps

 

2,761,000

 

Bbl

 

$71.05

 

-

 

-

2022 (1)

 

NYMEX WTI

 

Two-way Collars

 

10,351,500

 

Bbl

 

-

 

$47.13

 

$57.62

Q1 2023

 

NYMEX WTI

 

Fixed Price Swaps

 

810,000

 

Bbl

 

$75.14

 

-

 

-

Q1-Q3 2023

 

NYMEX WTI

 

Two-way Collars

 

3,443,500

 

Bbl

 

-

 

$46.75

 

$58.87

 

 

 

 

Total

 

17,366,000

 

 

 

 

 

 

 

 

Natural Gas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 (1)

 

NYMEX Henry Hub

 

Fixed Price Swaps

 

10,816,500

 

MMBtu

 

$3.51

 

-

 

-

2022 (1)

 

NYMEX Henry Hub

 

Two-way Collars

 

15,754,000

 

MMBtu

 

-

 

$2.67

 

$3.29

Q1 2023

 

NYMEX Henry Hub

 

Fixed Price Swaps

 

1,800,000

 

MMBtu

 

$4.25

 

-

 

-

Q1-Q3 2023

 

NYMEX Henry Hub

 

Two-way Collars

 

8,799,000

 

MMBtu

 

-

 

$2.42

 

$2.94

 

 

 

 

Total

 

37,169,500

 

 

 

 

 

 

 

 

Natural Gas Basis (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 (1)

 

NNG Ventura to NYMEX

 

Fixed Price Swaps

 

5,222,500

 

MMBtu

 

$0.53

 

-

 

-

Q1-Q2 2023

 

NNG Ventura to NYMEX

 

Fixed Price Swaps

 

5,920,000

 

MMBtu

 

$0.40

 

-

 

-

 

 

 

 

Total

 

11,142,500

 

 

 

 

 

 

 

 

NGL - Propane

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 (1)

 

Mont Belvieu

 

Fixed Price Swaps

 

18,417,000

 

Gallons

 

$1.07

 

-

 

-

2022 (1)

 

Conway

 

Fixed Price Swaps

 

56,112,000

 

Gallons

 

$1.07

 

-

 

-

 

 

 

 

Total

 

74,529,000

 

 

 

 

 

 

 

 

(1)

 

Includes settlement periods of February through December 2022.

(2)

 

The weighted average price associated with the natural gas basis swaps shown in the table above represents the average fixed differential to NYMEX as stated in the related contracts, which is compared to the Northern Natural Gas Ventura Index (“NNG Ventura”) for each period. If NYMEX combined with the fixed differential as stated in each contract is higher than the NNG Ventura index price at any settlement date, the Company receives the difference. Conversely, if the NNG Ventura index price is higher than NYMEX combined with the fixed differential, the Company pays the difference.

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

 

 

December 31,

 

September 30,

 

 

2021

 

2021

Selected operating statistics:

 

 

 

 

 

 

Production

 

 

 

 

 

 

Oil (MBbl)

 

 

4,871

 

 

 

4,763

 

NGLs (MBbl)

 

 

1,946

 

 

 

1,919

 

Natural gas (MMcf)

 

 

10,303

 

 

 

10,745

 

Total production (MBOE)

 

 

8,535

 

 

 

8,472

 

Average prices

 

 

 

 

 

 

Oil (per Bbl):

 

 

 

 

 

 

Price received

 

$

75.75

 

 

$

66.54

 

Effect of crude oil hedging (1)

 

 

(20.38

)

 

 

(16.57

)

Realized price

 

$

55.37

 

 

$

49.97

 

Weighted average NYMEX price (per Bbl) (2)

 

$

77.00

 

 

$

70.55

 

NGLs (per Bbl):

 

 

 

 

 

 

Price received

 

$

28.74

 

 

$

26.81

 

Effect of NGL hedging (3)

 

 

(2.08

)

 

 

(1.93

)

Realized price

 

$

26.66

 

 

$

24.88

 

Natural gas (per Mcf):

 

 

 

 

 

 

Price received

 

$

3.68

 

 

$

2.42

 

Effect of natural gas hedging (4)

 

 

(2.15

)

 

 

(0.82

)

Realized price

 

$

1.53

 

 

$

1.60

 

Weighted average NYMEX price (per MMBtu) (2)

 

$

5.13

 

 

$

3.95

 

Selected operating metrics:

 

 

 

 

 

 

Sales price, net of hedging ($ per BOE)

 

$

39.53

 

 

$

35.75

 

Lease operating ($ per BOE)

 

 

7.31

 

 

 

6.68

 

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

 

 

0.80

 

 

 

1.04

 

Depreciation, depletion and amortization ($ per BOE)

 

 

5.76

 

 

 

6.13

 

General and administrative ($ per BOE)

 

 

1.79

 

 

 

1.41

 

Production and ad valorem taxes (% of sales revenue)

 

 

7

%

 

 

7

%

(1)

 

Whiting paid $99 million and $79 million in pre-tax cash settlements on crude oil hedges during the three months ended December 31, 2021 and September 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 in pre-tax cash settlements on NGL hedges during the three months ended December 31, 2021 and September 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

(4)

 

Whiting paid $22 million and $9 million in pre-tax cash settlements on natural gas hedges during the three months ended December 31, 2021 and September 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Year Ended December 31, 2021

 

Four Months Ended December 31, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Year Ended December 31, 2020

Selected operating statistics:

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (MBbl)

 

 

19,316

 

 

 

6,857

 

 

 

 

15,273

 

 

 

22,130

 

NGLs (MBbl)

 

 

7,218

 

 

 

2,104

 

 

 

 

4,522

 

 

 

6,626

 

Natural gas (MMcf)

 

 

41,964

 

 

 

14,340

 

 

 

 

29,667

 

 

 

44,007

 

Total production (MBOE)

 

 

33,528

 

 

 

11,351

 

 

 

 

24,740

 

 

 

36,091

 

Average prices

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (per Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

64.77

 

 

$

37.05

 

 

 

$

28.86

 

 

$

31.40

 

Effect of crude oil hedging (1)

 

 

(14.70

)

 

 

(0.34

)

 

 

 

3.00

 

 

 

1.96

 

Realized price

 

$

50.07

 

 

$

36.71

 

 

 

$

31.86

 

 

$

33.36

 

Weighted average NYMEX price (per Bbl) (2)

 

$

67.86

 

 

$

41.84

 

 

 

$

38.23

 

 

$

39.35

 

NGLs (per Bbl):

 

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

22.53

 

 

$

5.90

 

 

 

$

4.45

 

 

$

4.91

 

Effect of NGL hedging (3)

 

 

(1.19

)

 

 

-

 

 

 

 

-

 

 

 

-

 

Realized price

 

$

21.34

 

 

$

5.90

 

 

 

$

4.45

 

 

$

4.91

 

Natural gas (per Mcf):

 

 

 

 

 

 

 

 

 

 

 

 

 

Price received

 

$

2.34

 

 

$

0.48

 

 

 

$

(0.06

)

 

$

0.11

 

Effect of natural gas hedging (4)

 

 

(0.74

)

 

 

(0.11

)

 

 

 

(0.01

)

 

 

(0.04

)

Realized price

 

$

1.60

 

 

$

0.37

 

 

 

$

(0.07

)

 

$

0.07

 

Weighted average NYMEX price (per MMBtu) (2)

 

$

3.59

 

 

$

2.44

 

 

 

$

1.76

 

 

$

1.98

 

Selected operating metrics:

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price, net of hedging ($ per BOE)

 

$

35.44

 

 

$

23.74

 

 

 

$

20.39

 

 

$

21.44

 

Lease operating ($ per BOE)

 

 

7.23

 

 

 

6.52

 

 

 

 

6.40

 

 

 

6.43

 

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

 

 

0.90

 

 

 

0.71

 

 

 

 

0.90

 

 

 

0.84

 

Depreciation, depletion and amortization ($ per BOE)

 

 

6.16

 

 

 

6.83

 

 

 

 

13.69

 

 

 

11.53

 

General and administrative ($ per BOE)

 

 

1.48

 

 

 

1.91

 

 

 

 

3.71

 

 

 

3.15

 

Production and ad valorem taxes (% of sales revenue)

 

 

7

%

 

 

9

%

 

 

 

9

%

 

 

9

%

(1)

 

Whiting paid $284 million and received $43 million in pre-tax cash settlements on crude oil hedges during the years ended December 31, 2021 and December 31, 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 $9 million in pre-tax cash settlements on NGL hedges during the year ended December 31, 2021. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

(4)

 

Whiting paid $31 million and $2 million in pre-tax cash settlements on natural gas hedges during the years ended December 31, 2021 and December 31, 2020, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting’s Annual Report on Form 10‑K for the year ended December 31, 2021 filed with the Securities and Exchange Commission.

 

 

Successor

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

 

2021

 

2021

Selected financial data:

 

 

 

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

Total operating revenues

 

$

473,408

 

$

401,037

Total operating expenses

 

 

177,379

 

 

199,304

Total other expense, net

 

 

2,940

 

 

3,571

Net income

 

 

292,179

 

 

198,162

Per basic share

 

 

7.47

 

 

5.07

Per diluted share

 

 

7.34

 

 

5.00

Adjusted net income (1)

 

 

168,493

 

 

141,553

Per basic share

 

 

4.31

 

 

3.62

Per diluted share

 

 

4.23

 

 

3.57

Adjusted EBITDAX (1)

 

 

226,356

 

 

201,102

Net cash provided by operating activities

 

 

213,914

 

 

189,890

Adjusted free cash flow (1)

 

 

156,269

 

 

127,742

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Year Ended December 31, 2021

 

Four Months Ended December 31, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Year Ended December 31, 2020

Selected financial data:

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues

 

$

1,533,481

 

$

273,358

 

 

$

459,004

 

 

$

732,362

 

Total operating expenses

 

 

1,091,867

 

 

238,379

 

 

 

4,651,298

 

 

 

4,889,677

 

Total other (income) expense, net

 

 

12,798

 

 

7,944

 

 

 

(170,459

)

 

 

(162,515

)

Net income (loss)

 

 

427,906

 

 

39,073

 

 

 

(3,965,461

)

 

 

(3,926,388

)

Per basic share (2)

 

 

10.97

 

 

1.03

 

 

 

(43.37

)

 

 

(103.11

)

Per diluted share (2)

 

 

10.78

 

 

1.03

 

 

 

(43.37

)

 

 

(103.11

)

Adjusted net income (loss) (1)

 

 

535,441

 

 

63,794

 

 

 

(209,656

)

 

 

(145,862

)

Per basic share (2)

 

 

13.73

 

 

1.68

 

 

 

(2.29

)

 

 

(3.83

)

Per diluted share (2)

 

 

13.49

 

 

1.67

 

 

 

(2.29

)

 

 

(3.83

)

Adjusted EBITDAX (1)

 

 

774,025

 

 

154,521

 

 

 

227,580

 

 

 

382,101

 

Net cash provided by operating activities

 

 

740,243

 

 

82,168

 

 

 

112,613

 

 

 

194,781

 

Adjusted free cash flow (1)

 

 

503,550

 

 

102,493

 

 

 

(132,564

)

 

 

(30,071

)

(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 year ended December 31, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

Successor

 

 

December 31,

 

December 31,

 

 

2021

 

2020

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

41,245

 

 

$

28,367

 

Accounts receivable trade, net

 

 

279,865

 

 

 

142,830

 

Prepaid expenses and other

 

 

17,158

 

 

 

19,224

 

Total current assets

 

 

338,268

 

 

 

190,421

 

Property and equipment:

 

 

 

 

 

 

Oil and gas properties, successful efforts method

 

 

2,274,908

 

 

 

1,812,601

 

Other property and equipment

 

 

61,624

 

 

 

74,064

 

Total property and equipment

 

 

2,336,532

 

 

 

1,886,665

 

Less accumulated depreciation, depletion and amortization

 

 

(254,237

)

 

 

(73,869

)

Total property and equipment, net

 

 

2,082,295

 

 

 

1,812,796

 

Other long-term assets

 

 

37,368

 

 

 

40,723

 

TOTAL ASSETS

 

$

2,457,931

 

 

$

2,043,940

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable trade

 

$

48,641

 

 

$

23,697

 

Revenues and royalties payable

 

 

258,527

 

 

 

151,196

 

Accrued capital expenditures

 

 

38,914

 

 

 

20,155

 

Accrued liabilities and other

 

 

30,726

 

 

 

42,007

 

Accrued lease operating expenses

 

 

32,408

 

 

 

23,457

 

Taxes payable

 

 

18,864

 

 

 

11,997

 

Derivative liabilities

 

 

209,653

 

 

 

49,485

 

Total current liabilities

 

 

637,733

 

 

 

321,994

 

Long-term debt

 

 

-

 

 

 

360,000

 

Asset retirement obligations

 

 

93,915

 

 

 

91,864

 

Operating lease obligations

 

 

14,710

 

 

 

17,415

 

Long-term derivative liabilities

 

 

46,720

 

 

 

9,750

 

Other long-term liabilities

 

 

1,228

 

 

 

14,113

 

Total liabilities

 

 

794,306

 

 

 

815,136

 

Commitments and contingencies

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock, $0.001 par value, 500,000,000 shares authorized; 39,133,637 issued and outstanding as of December 31, 2021 and 38,051,125 issued and outstanding as of December 31, 2020

 

 

39

 

 

 

38

 

Additional paid-in capital

 

 

1,196,607

 

 

 

1,189,693

 

Accumulated earnings

 

 

466,979

 

 

 

39,073

 

Total equity

 

 

1,663,625

 

 

 

1,228,804

 

TOTAL LIABILITIES AND EQUITY

 

$

2,457,931

 

 

$

2,043,940

 

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

 

2021

 

2021

OPERATING REVENUES

 

 

 

 

 

 

Oil, NGL and natural gas sales

 

$

462,842

 

 

$

394,333

 

Purchased gas sales

 

 

10,566

 

 

 

6,704

 

Total operating revenues

 

 

473,408

 

 

 

401,037

 

OPERATING EXPENSES

 

 

 

 

 

 

Lease operating expenses

 

 

62,393

 

 

 

56,562

 

Transportation, gathering, compression and other

 

 

6,801

 

 

 

8,835

 

Purchased gas expense

 

 

8,997

 

 

 

5,496

 

Production and ad valorem taxes

 

 

31,885

 

 

 

28,712

 

Depreciation, depletion and amortization

 

 

49,201

 

 

 

51,927

 

Exploration and impairment

 

 

2,666

 

 

 

3,446

 

General and administrative

 

 

15,273

 

 

 

11,961

 

Derivative (gain) loss, net

 

 

(4,530

)

 

 

122,559

 

(Gain) loss on sale of properties

 

 

4,693

 

 

 

(90,194

)

Total operating expenses

 

 

177,379

 

 

 

199,304

 

INCOME FROM OPERATIONS

 

 

296,029

 

 

 

201,733

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Interest expense

 

 

(3,426

)

 

 

(3,871

)

Other income

 

 

486

 

 

 

300

 

Total other expense

 

 

(2,940

)

 

 

(3,571

)

INCOME BEFORE INCOME TAXES

 

 

293,089

 

 

 

198,162

 

INCOME TAX EXPENSE

 

 

 

 

 

 

Current

 

 

910

 

 

 

-

 

Total income tax expense

 

 

910

 

 

 

-

 

NET INCOME

 

$

292,179

 

 

$

198,162

 

INCOME PER COMMON SHARE

 

 

 

 

 

 

Basic

 

$

7.47

 

 

$

5.07

 

Diluted

 

$

7.34

 

 

$

5.00

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

Basic

 

 

39,132

 

 

 

39,121

 

Diluted

 

 

39,819

 

 

 

39,622

 

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Year Ended December 31, 2021

 

Four Months Ended December 31, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Year Ended December 31, 2020

OPERATING REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil, NGL and natural gas sales

 

$

1,511,837

 

 

$

273,358

 

 

 

$

459,004

 

 

$

732,362

 

Purchased gas sales

 

 

21,644

 

 

 

-

 

 

 

 

-

 

 

 

-

 

Total operating revenues

 

 

1,533,481

 

 

 

273,358

 

 

 

 

459,004

 

 

 

732,362

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

242,476

 

 

 

73,981

 

 

 

 

158,228

 

 

 

232,209

 

Transportation, gathering, compression and other

 

 

30,107

 

 

 

8,038

 

 

 

 

22,266

 

 

 

30,304

 

Purchased gas expense

 

 

17,572

 

 

 

-

 

 

 

 

-

 

 

 

-

 

Production and ad valorem taxes

 

 

110,416

 

 

 

24,150

 

 

 

 

41,204

 

 

 

65,354

 

Depreciation, depletion and amortization

 

 

206,475

 

 

 

77,502

 

 

 

 

338,757

 

 

 

416,259

 

Exploration and impairment

 

 

10,781

 

 

 

7,865

 

 

 

 

4,184,830

 

 

 

4,192,695

 

General and administrative

 

 

49,520

 

 

 

21,734

 

 

 

 

91,816

 

 

 

113,550

 

Derivative (gain) loss, net

 

 

520,131

 

 

 

24,714

 

 

 

 

(181,614

)

 

 

(156,900

)

(Gain) loss on sale of properties

 

 

(95,611

)

 

 

395

 

 

 

 

927

 

 

 

1,322

 

Amortization of deferred gain on sale

 

 

-

 

 

 

-

 

 

 

 

(5,116

)

 

 

(5,116

)

Total operating expenses

 

 

1,091,867

 

 

 

238,379

 

 

 

 

4,651,298

 

 

 

4,889,677

 

INCOME (LOSS) FROM OPERATIONS

 

 

441,614

 

 

 

34,979

 

 

 

 

(4,192,294

)

 

 

(4,157,315

)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(16,381

)

 

 

(8,080

)

 

 

 

(73,054

)

 

 

(81,134

)

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

25,883

 

 

 

25,883

 

Interest income and other

 

 

3,583

 

 

 

136

 

 

 

 

211

 

 

 

347

 

Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

217,419

 

 

 

217,419

 

Total other income (expense)

 

 

(12,798

)

 

 

(7,944

)

 

 

 

170,459

 

 

 

162,515

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

428,816

 

 

 

27,035

 

 

 

 

(4,021,835

)

 

 

(3,994,800

)

INCOME TAX EXPENSE (BENEFIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

910

 

 

 

2,463

 

 

 

 

2,718

 

 

 

5,181

 

Deferred

 

 

-

 

 

 

(14,501

)

 

 

 

(59,092

)

 

 

(73,593

)

Total income tax expense (benefit)

 

 

910

 

 

 

(12,038

)

 

 

 

(56,374

)

 

 

(68,412

)

NET INCOME (LOSS)

 

$

427,906

 

 

$

39,073

 

 

 

$

(3,965,461

)

 

$

(3,926,388

)

INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (1)

 

$

10.97

 

 

$

1.03

 

 

 

$

(43.37

)

 

$

(103.11

)

Diluted (1)

 

$

10.78

 

 

$

1.03

 

 

 

$

(43.37

)

 

$

(103.11

)

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (1)

 

 

39,006

 

 

 

38,080

 

 

 

 

91,423

 

 

 

38,080

 

Diluted (1)

 

 

39,692

 

 

 

38,119

 

 

 

 

91,423

 

 

 

38,080

 

(1)

 

For the combined year ended December 31, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

Non-GAAP Financial Measures

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income to Adjusted Net Income

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

 

2021

 

2021

Net income

 

$

292,179

 

 

$

198,162

 

Adjustments:

 

 

 

 

 

 

(Gain) loss on sale of properties

 

 

4,693

 

 

 

(90,194

)

Impairment expense

 

 

1,577

 

 

 

2,439

 

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

 

 

(4,530

)

 

 

122,559

 

Total net cash settlements paid on commodity derivatives during the period

 

 

(125,426

)

 

 

(91,413

)

Adjusted net income (1)

 

$

168,493

 

 

$

141,553

 

Adjusted net income per share, basic (1)

 

$

4.31

 

 

$

3.62

 

Adjusted net income per share, diluted (1)

 

$

4.23

 

 

$

3.57

 

(1)

 

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

WHITING PETROLEUM CORPORATION

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

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Year Ended December 31, 2021

 

Four Months Ended December 31, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Year Ended December 31, 2020

Net income (loss)

 

$

427,906

 

 

$

39,073

 

 

 

$

(3,965,461

)

 

$

(3,926,388

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred gain on sale

 

 

-

 

 

 

-

 

 

 

 

(5,116

)

 

 

(5,116

)

(Gain) loss on sale of properties

 

 

(95,611

)

 

 

395

 

 

 

 

927

 

 

 

1,322

 

Impairment expense

 

 

6,707

 

 

 

3,233

 

 

 

 

4,161,885

 

 

 

4,165,118

 

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

(25,883

)

 

 

(25,883

)

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

 

 

520,131

 

 

 

24,714

 

 

 

 

(181,614

)

 

 

(156,900

)

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

 

 

(323,692

)

 

 

(3,942

)

 

 

 

45,483

 

 

 

41,541

 

Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

(217,419

)

 

 

(217,419

)

Restructuring and other one-time costs (1)

 

 

-

 

 

 

12,359

 

 

 

 

32,888

 

 

 

45,247

 

Tax impact of basis difference for Whiting Canadian Holding Company ULC

 

 

-

 

 

 

(12,038

)

 

 

 

(55,346

)

 

 

(67,384

)

Adjusted net income (loss) (2)

 

$

535,441

 

 

$

63,794

 

 

 

$

(209,656

)

 

$

(145,862

)

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

 

$

13.73

 

 

$

1.68

 

 

 

$

(2.29

)

 

$

(3.83

)

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

 

$

13.49

 

 

$

1.67

 

 

 

$

(2.29

)

 

$

(3.83

)

(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 year ended December 31, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

WHITING PETROLEUM CORPORATION

Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAX

(in thousands)

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

 

2021

 

2021

Net income

 

$

292,179

 

 

$

198,162

 

Interest expense

 

 

3,426

 

 

 

3,871

 

Income tax expense

 

 

910

 

 

 

-

 

Depreciation, depletion and amortization

 

 

49,201

 

 

 

51,927

 

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

 

 

(4,530

)

 

 

122,559

 

Total cash settlements paid on commodity derivatives during the period

 

 

(125,426

)

 

 

(91,413

)

Non-cash stock-based compensation

 

 

3,237

 

 

 

2,744

 

Impairment expense

 

 

1,577

 

 

 

2,439

 

(Gain) loss on sale of properties

 

 

4,693

 

 

 

(90,194

)

Adjusted EBITDA (1)

 

 

225,267

 

 

 

200,095

 

Exploration expense

 

 

1,089

 

 

 

1,007

 

Adjusted EBITDAX (1)

 

$

226,356

 

 

$

201,102

 

(1)

 

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

WHITING PETROLEUM CORPORATION

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

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Year Ended December 31, 2021

 

Four Months Ended December 31, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Year Ended December 31, 2020

Net income (loss)

 

$

427,906

 

 

$

39,073

 

 

 

$

(3,965,461

)

 

$

(3,926,388

)

Interest expense

 

 

16,381

 

 

 

8,080

 

 

 

 

73,054

 

 

 

81,134

 

Interest income

 

 

(1

)

 

 

(2

)

 

 

 

(211

)

 

 

(213

)

Income tax expense (benefit)

 

 

910

 

 

 

(12,038

)

 

 

 

(56,374

)

 

 

(68,412

)

Depreciation, depletion and amortization

 

 

206,475

 

 

 

77,502

 

 

 

 

338,757

 

 

 

416,259

 

Amortization of deferred gain on sale

 

 

-

 

 

 

-

 

 

 

 

(5,116

)

 

 

(5,116

)

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

 

 

520,131

 

 

 

24,714

 

 

 

 

(181,614

)

 

 

(156,900

)

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

 

 

(323,692

)

 

 

(3,942

)

 

 

 

45,483

 

 

 

41,541

 

Non-cash stock-based compensation

 

 

10,745

 

 

 

515

 

 

 

 

3,719

 

 

 

4,234

 

Impairment expense

 

 

6,707

 

 

 

3,233

 

 

 

 

4,161,885

 

 

 

4,165,118

 

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

(25,883

)

 

 

(25,883

)

(Gain) loss on sale of properties

 

 

(95,611

)

 

 

395

 

 

 

 

927

 

 

 

1,322

 

Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

(217,419

)

 

 

(217,419

)

Restructuring and other one-time costs (1)

 

 

-

 

 

 

12,359

 

 

 

 

32,888

 

 

 

45,247

 

Adjusted EBITDA (2)

 

 

769,951

 

 

 

149,889

 

 

 

 

204,635

 

 

 

354,524

 

Exploration expense

 

 

4,074

 

 

 

4,632

 

 

 

 

22,945

 

 

 

27,577

 

Adjusted EBITDAX (2)

 

$

774,025

 

 

$

154,521

 

 

 

$

227,580

 

 

$

382,101

 

(1)

 

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

(2)

 

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

WHITING PETROLEUM CORPORATION

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

(in thousands)

 

 

 

 

 

 

 

 

 

Successor

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

 

2021

 

2021

Net cash provided by operating activities

 

$

213,914

 

 

$

189,890

 

Changes in working capital

 

 

8,550

 

 

 

4,788

 

Accrued capital expenditures

 

 

(66,195

)

 

 

(66,936

)

Adjusted free cash flow (1)

 

$

156,269

 

 

$

127,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Non-GAAP

 

 

Year Ended December 31, 2021

 

Four Months Ended December 31, 2020

 

 

Eight Months Ended August 31, 2020

 

Combined Year Ended December 31, 2020

Net cash provided by operating activities

 

$

740,243

 

 

$

82,168

 

 

 

 

112,613

 

 

 

194,781

 

Changes in working capital

 

 

10,508

 

 

 

44,318

 

 

 

 

(59,815

)

 

 

(15,497

)

Accrued capital expenditures

 

 

(247,201

)

 

 

(23,993

)

 

 

 

(185,362

)

 

 

(209,355

)

Adjusted free cash flow (1)

 

$

503,550

 

 

$

102,493

 

 

 

$

(132,564

)

 

$

(30,071

)

(1)

 

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

About Whiting Petroleum Corporation

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

Forward-Looking Statements

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

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

• declines in, or extended periods of low oil, NGL or natural gas prices;
• the occurrence of epidemic or pandemic diseases, including the coronavirus pandemic;
• action or inaction of the Organization of Petroleum Exporting Countries and other oil exporting nations to set and maintain production levels;
• the impacts of hedging on our results of operations;
• regulatory developments, including the potential shutdown of the Dakota Access Pipeline and new or amended federal, state and local initiatives relating to the regulation of hydraulic fracturing, air emissions and other aspects of oil and gas operations that could have a negative effect on the oil and gas industry and/or increase costs of compliance;
• the geographic concentration of our operations;
• our inability to access oil and gas markets due to market conditions or operational impediments;
• adequacy of midstream and downstream transportation capacity and infrastructure;
• shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services;
• adverse weather conditions that may negatively impact development or production activities;
• potential losses and claims resulting from our oil and gas operations, including uninsured or underinsured losses;
• lack of control over non-operated properties;
• cybersecurity attacks or failures of our telecommunication and other information technology infrastructure;
• revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors;
• inaccuracies of our reserve estimates or our assumptions underlying them;
• impact of negative shifts in investor sentiment and public perception towards the oil and gas industry and corporate governance standards;
• climate change issues;
• litigation and other legal proceedings; and
• other risks described under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2021.

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20220223006203/en/

Company Contact: Brandon Day Title: Investor Relations Director Phone: 303-390-4969 Email: Brandond@whiting.com