Whiting Petroleum Reports Fourth Quarter and Full Year 2020 Financial and Operating Results

Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced fourth quarter and full year 2020 results.

Fourth Quarter and Full-Year 2020 Highlights

  • Revenue was $212 million and $732 million for the quarter and year ending December 31, 2020, respectively
  • Net loss was $1.2 million or $0.03 per diluted share for the quarter ending December 31, 2020
  • Adjusted EBITDAX was $120 million and $382 million for the quarter and year ending December 31, 2020, respectively (see further discussion regarding the calculation of adjusted EBITDAX in "About Non-GAAP Financial Measures" below)

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

Although GAAP requires that the Company report on results for the Successor Period and Current Predecessor YTD Period separately, our operating results are discussed below for the year ended December 31, 2020 by combining the results of the applicable Predecessor and Successor periods in order to provide the most meaningful comparison of our current results to prior periods.

Revenue for the fourth quarter of 2020 decreased $168 million to $212 million when comparing to the fourth quarter of 2019. A decrease in total production, which was primarily due to reduced development activity during 2020, accounted for approximately $114 million of the change in revenue. Lower commodity prices realized accounted for the remaining $54 million decrease in revenue between periods.

Net loss for the fourth quarter of 2020 was $1.2 million, or $0.03 per share, as compared to a net loss of $147 million, or $1.62 per share, for the fourth quarter of 2019. Adjusted net income for the fourth quarter of 2020 was $56 million or $1.46 per share. Adjusted net income and adjusted net income per share that exclude the effect of certain items are non-GAAP financial measures. Adjusted net income and adjusted net income per share represent net income (loss) and diluted net income (loss) per share, respectively, as determined under U.S. GAAP excluding the effects of non-cash gains and losses on derivative instruments, property impairments, gains and losses on asset sales and gains and losses on extinguishment of debt as applicable.

Adjusted EBITDAX for the fourth quarter of 2020 was $120 million compared to $241 million for the fourth quarter of 2019. Adjusted EBITDAX for the full-year of 2020 was $382 million compared to $979 million for the full-year of 2019. The Company’s revenues and EBITDAX for 2020 were similarly affected by lower production volumes due to reduced development activity during the year in response to the prevailing commodity price environment. This depressed commodity price environment also directly affected the Company’s results with lower prices received for its products. These effects were partially offset by reduced general and administrative expenses and DD&A primarily due to cost control measures implemented by the Company and its reorganization under bankruptcy. Select operating statistics are presented in the following tables:

Selected Operating and Financial Statistics

Successor

Predecessor

Three Months
Ended
December 31,
2020

Three Months
Ended
December 31,
2019

Selected operating statistics:

Production

Oil (MBbl)

5,110

7,376

NGLs (MBbl)

1,546

1,886

Natural gas (MMcf)

10,709

12,316

Total production (MBOE)

8,441

11,315

Average prices

Oil (per Bbl):

Price received

$

37.89

$

48.67

Effect of crude oil hedging (1)

(0.55

)

1.36

Realized price (2)

$

37.34

$

50.03

Weighted average NYMEX price (per Bbl) (3)

$

42.59

$

56.93

NGLs (per Bbl):

Realized price

$

6.88

$

8.79

Natural gas (per Mcf):

Price received

$

0.75

$

0.41

Effect of natural gas hedging (4)

(0.20

)

-

Realized price

$

0.55

$

0.41

Weighted average NYMEX price (per MMBtu) (3)

$

2.51

$

2.44

Selected operating metrics

Sales price, net of hedging ($ per BOE)

$

24.56

$

34.53

Lease operating ($ per BOE)

6.57

6.37

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

0.72

0.91

Depreciation, depletion and amortization ($ per BOE)

6.80

18.06

General and administrative ($ per BOE)

1.35

3.11

Production and ad valorem taxes (% of sales revenue)

9

%

9

%

__________

(1)

Whiting paid $3 million and received $10 million in pre-tax cash settlements on crude oil hedges during the three months ended December 31, 2020 and 2019, respectively. A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(2)

Whiting’s price received for oil was reduced by $2.43 per Bbl during the three months ended December 31, 2019 due to deficiency payments under a contract in the Company’s Redtail field. This contract ended in April 2020.

(3)

Average NYMEX prices weighted for monthly production volumes.

(4)

Whiting paid $2 million in pre-tax cash settlements on natural gas hedges during the three months ended December 31, 2020. A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

Successor

Predecessor

Non-GAAP

Predecessor

Four Months
Ended
December 31,
2020

Eight Months
Ended
August 31,
2020

Combined
Year Ended
December 31,
2020

Year Ended
December 31,
2019

Selected operating statistics:

Production

Oil (MBbl)

6,857

15,273

22,130

29,811

NGLs (MBbl)

2,104

4,522

6,626

7,596

Natural gas (MMcf)

14,340

29,667

44,007

50,483

Total production (MBOE)

11,351

24,740

36,091

45,820

Average prices

Oil (per Bbl):

Price received

$

37.05

$

28.86

$

31.40

$

50.06

Effect of crude oil hedging (1)

(0.34

)

3.00

1.96

0.83

Realized price (2)

$

36.71

$

31.86

$

33.36

$

50.89

Weighted average NYMEX price (per Bbl) (3)

$

41.84

$

38.23

$

39.35

$

56.97

NGLs (per Bbl):

Realized price

$

5.90

$

4.45

$

4.91

$

6.76

Natural gas (per Mcf):

Price received

$

0.48

$

(0.06

)

$

0.11

$

0.57

Effect of natural gas hedging (4)

(0.11

)

(0.01

)

(0.04

)

-

Realized price

$

0.37

$

(0.07

)

$

0.07

$

0.57

Weighted average NYMEX price (per MMBtu) (3)

$

2.44

$

1.76

$

1.98

$

2.58

Selected operating metrics

Sales price, net of hedging ($ per BOE)

$

23.74

$

20.39

$

21.44

$

34.86

Lease operating ($ per BOE)

6.52

6.40

6.43

7.17

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

0.71

0.90

0.84

0.93

Depreciation, depletion and amortization ($ per BOE)

6.83

13.69

11.53

17.82

General and administrative ($ per BOE)

1.91

3.71

3.15

2.89

Production and ad valorem taxes (% of sales revenue)

9

%

9

%

9

%

9

%

____________

(1)

Whiting received $43 million and $25 million in pre-tax cash settlements on crude oil hedges during the year ended December 31, 2020 and 2019, respectively. A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

(2)

Whiting’s realized oil prices were reduced by $2.14 per Bbl during the year December 31, 2019, due to deficiency payments under a contract in the Company’s Redtail field. This contract ended in April 2020.

(3)

Average NYMEX prices weighted for monthly production volumes.

(4)

Whiting paid $2 million in pre-tax cash settlements on natural gas hedges during the year ended December 31, 2020. A summary of Whiting’s outstanding hedges is included in “Commodity Price Hedging” later in this release.

Liquidity

As of December 31, 2020, the Company had a $750 million revolving credit facility with borrowings of $360 million and letters of credit of $2 million outstanding. The resulting total availability of $388 million along with $26 million in unrestricted cash resulted in total liquidity of $414 million. The Company has continued to pay down its revolver facility, with outstanding borrowings estimated to be $275 million as of February 28, 2021. Since emergence from bankruptcy on September 1, 2020, the Company is estimated to have reduced its outstanding borrowings on its revolver facility by approximately $150 million as of February 28, 2021. Whiting expects to continue to fund its operations fully within operating cash flow while reducing its debt through at least 2021.

Commodity Price Hedging

Whiting currently has approximately 70% of its forecasted crude oil production and 75% of its natural gas production hedged for 2021. The Company uses commodity hedges in order to reduce the effects of commodity price volatility and to adhere to the requirements of its credit facility. The following table summarizes Whiting’s hedging positions as of February 24, 2021:

Weighted Average Prices

Settlement Period

Index

Derivative Instrument

Total Volumes

Units

Swap Price

Floor

Ceiling

Crude Oil

2021(1)

NYMEX WTI

Fixed Price Swaps

5,523

MBbl

$44.36

-

-

2021(1)

NYMEX WTI

Two-way Collars

6,212

MBbl

-

$38.86

$47.09

2022

NYMEX WTI

Fixed Price Swaps

630

MBbl

$54.30

-

-

2022

NYMEX WTI

Two-way Collars

8,460

MBbl

-

$41.95

$52.35

2023(2)

NYMEX WTI

Two-way Collars

1,980

MBbl

-

$45.77

$56.01

Total

22,805

Natural Gas

2021(3)

NYMEX Henry Hub

Fixed Price Swaps

16,290

BBtu

$2.80

-

-

2021(3)

NYMEX Henry Hub

Two-way Collars

9,180

BBtu

-

$2.60

$2.79

2022

NYMEX Henry Hub

Fixed Price Swaps

3,390

BBtu

$2.65

-

-

2022

NYMEX Henry Hub

Two-way Collars

10,720

BBtu

-

$2.35

$2.85

2023(2)

NYMEX Henry Hub

Two-way Collars

1,800

BBtu

-

$2.60

$3.05

Total

41,380

____________

(1)

Includes settlement periods of February through December 2021.

(2)

Includes settlement periods of January through March 2023.

(3)

Includes settlement periods of March through December 2021.

Outlook for Full-Year 2021

The following table summarizes the Company’s previously provided 2021 guidance, which was based on $45 WTI crude oil and remains unchanged:

Full-Year 2021 Guidance

Production (MBOE per day)

82 - 88

Oil production (MBO per day)

48 - 52

Capital expenditures (MM)

$ 228 - $ 252

Lease operating expense (MM)

$ 220 - $ 245

General and administrative cash expense (MM)

$ 48 - $ 52

The Company currently has one drilling rig operating in its Sanish Field in North Dakota as well as one completion crew operating in the Foreman Butte/Hidden Bench areas. With the previously announced development program the Company expected to generate in excess of $150 million of free cash flow. Anticipating commodity price fluctuation throughout the year and considering that oil revenue represents over 90% of Whiting’s revenues, the Company expects a $1 change in WTI to impact free cash flow by approximately $10 million, subject to the effect of hedges at certain prices.

Management Comment

Lynn A. Peterson, President and CEO of WLL commented, "2020 was a demanding year for the Company and its staff, as it managed through bankruptcy and the significant impacts of the Covid-19 pandemic. As an organization, we had to change the way we operate, and the staff worked tirelessly through the year adapting to new work habits while facing the challenges that the pandemic caused in almost all aspects of life. For that I want to commend our employees for their efforts. The Company has made significant strides in driving down costs as evidenced by our previous operational release. We have attempted to right size the staff to the Company’s current activity levels and these efforts can be evidenced by the $71 million in net cash provided by operating activities and nearly $90 million of free cash flow during the fourth quarter of 2020. We believe Whiting exited the year well positioned financially and operationally with an exciting opportunity ahead of us to redefine how we fit within the energy sector.”

Conference Call

Whiting will host a conference call on Thursday, February 25, 2021 at 9:00 a.m. Eastern time (7:00 a.m. Mountain time) to discuss these results. The call will be conducted by President and CEO Lynn A. Peterson, CFO James Henderson, COO Charles J. Rimer and IR Manager Brandon Day. A Q&A session will immediately follow the discussion of the results for the quarter.

To participate in this call please dial:
Domestic Dial-in Number: (877) 328-5506
International Dial-in Number: (412) 317-5422
Webcast URL: https://dpregister.com/sreg/10152247/e26abb863d

Replay Information:
Conference ID #: 10152247
Replay Dial-In (Toll Free U.S. & Canada): (877) 344-7529 (U.S.), (855) 669-9658 (Canada)
Replay Dial-In (International): (412) 317-0088
Expiration Date: March 04, 2021

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Annual Report on Form 10‑K for the year ended December 31, 2020 to be filed with the Securities and Exchange Commission.

Successor

Predecessor

Three Months
Ended
December 31,
2020

Three Months
Ended
December 31,
2019

Selected financial data:

(In thousands, except per share data)

Total operating revenues

$

212,274

$

380,601

Total operating expenses

207,502

412,454

Total other expense, net

5,822

42,041

Net loss

(1,197

)

(147,487

)

Per basic share

(0.03

)

(1.62

)

Per diluted share

(0.03

)

(1.62

)

Adjusted net income (loss) (1)

55,543

(20,414

)

Per basic share

1.46

(0.22

)

Per diluted share

1.46

(0.22

)

Adjusted EBITDAX (1)

119,825

240,872

____________

(1)

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

Successor

Predecessor

Non-GAAP

Predecessor

Four Months
Ended
December 31,
2020

Eight Months
Ended
August 31,
2020

Combined
Year Ended
December 31,
2020

Year Ended
December 31,
2019

Selected financial data:

(In thousands, except per share data)

Total operating revenues

$

273,358

$

459,004

$

732,362

$

1,572,245

Total operating expenses

238,379

4,651,298

4,889,677

1,559,576

Total other (income) expense, net

7,944

(170,459

)

(162,515

)

181,615

Net income (loss)

39,073

(3,965,461

)

(3,926,388

)

(241,166

)

Per basic share (1)

1.03

(43.37

)

(103.11

)

(2.64

)

Per diluted share (1)

1.03

(43.37

)

(103.11

)

(2.64

)

Adjusted net income (loss) (2)

63,794

(209,656

)

(145,862

)

(78,236

)

Per basic share (1)

1.68

(2.29

)

(3.83

)

(0.86

)

Per diluted share (1)

1.67

(2.29

)

(3.83

)

(0.86

)

Adjusted EBITDAX (2)

154,521

227,580

382,101

979,048

____________

(1)

For the combined year ended December 31, 2020, the Company used the Successor’s basic and diluted weighted average share counts for the four months ended December 31, 2020 to calculate per share amounts. Refer to the Consolidated Statement of Operations presented later in this release for share counts used.

(2)

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

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share and per share data)

Successor

Predecessor

December 31,

December 31,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$

25,607

$

8,652

Restricted cash

2,760

-

Accounts receivable trade, net

142,830

308,249

Prepaid expenses and other

19,224

14,082

Total current assets

190,421

330,983

Property and equipment:

Oil and gas properties, successful efforts method

1,812,601

12,812,007

Other property and equipment

74,064

178,689

Total property and equipment

1,886,665

12,990,696

Less accumulated depreciation, depletion and amortization

(73,869

)

(5,735,239

)

Total property and equipment, net

1,812,796

7,255,457

Other long-term assets

40,723

50,281

TOTAL ASSETS

$

2,043,940

$

7,636,721

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share and per share data)

Successor

Predecessor

December 31,

December 31,

2020

2019

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable trade

$

23,697

$

80,100

Revenues and royalties payable

151,196

202,010

Accrued capital expenditures

20,155

64,263

Accrued liabilities and other

36,170

53,597

Accrued lease operating expenses

23,457

38,262

Accrued interest

476

53,928

Taxes payable

11,997

26,844

Derivative liabilities

49,485

10,285

Accrued employee compensation and benefits

5,361

21,125

Total current liabilities

321,994

550,414

Long-term debt

360,000

2,799,885

Asset retirement obligations

91,864

131,208

Operating lease obligations

17,415

31,722

Deferred income taxes

-

73,593

Other long-term liabilities

23,863

24,928

Total liabilities

815,136

3,611,750

Commitments and contingencies

Equity:

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

-

92

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

38

-

Additional paid-in capital

1,189,693

6,409,991

Accumulated earnings (deficit)

39,073

(2,385,112

)

Total equity

1,228,804

4,024,971

TOTAL LIABILITIES AND EQUITY

$

2,043,940

$

7,636,721

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

Three Months
Ended
December 31,
2020

Three Months
Ended
December 31,
2019

OPERATING REVENUES

Oil, NGL and natural gas sales

$

212,274

$

380,601

OPERATING EXPENSES

Lease operating expenses

55,455

72,043

Transportation, gathering, compression and other

6,058

10,293

Production and ad valorem taxes

18,242

35,416

Depreciation, depletion and amortization

57,392

204,322

Exploration and impairment

3,658

10,693

General and administrative

11,389

35,172

Derivative loss, net

55,308

46,338

Loss on sale of properties

-

283

Amortization of deferred gain on sale

-

(2,106

)

Total operating expenses

207,502

412,454

INCOME (LOSS) FROM OPERATIONS

4,772

(31,853

)

OTHER INCOME (EXPENSE)

Interest expense

(5,952

)

(45,773

)

Gain on extinguishment of debt

-

3,232

Interest income and other

130

500

Reorganization items, net

-

-

Total other income (expense)

(5,822

)

(42,041

)

LOSS BEFORE INCOME TAXES

(1,050

)

(73,894

)

INCOME TAX EXPENSE

-

Current

147

-

Deferred

-

73,593

Income tax expense

147

73,593

NET LOSS

$

(1,197

)

$

(147,487

)

LOSS PER COMMON SHARE

Basic

$

(0.03

)

$

(1.62

)

Diluted

$

(0.03

)

$

(1.62

)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,090

91,317

Diluted

38,090

91,317

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

Non-GAAP

Predecessor

Four Months
Ended
December 31,
2020

Eight Months
Ended
August 31,
2020

Combined
Year Ended
December 31,
2020

Year Ended
December 31,
2019

OPERATING REVENUES

Oil, NGL and natural gas sales

$

273,358

$

459,004

$

732,362

$

1,572,245

OPERATING EXPENSES

Lease operating expenses

73,981

158,228

232,209

328,427

Transportation, gathering, compression and other

8,038

22,266

30,304

42,438

Production and ad valorem taxes

24,150

41,204

65,354

138,212

Depreciation, depletion and amortization

77,502

338,757

416,259

816,488

Exploration and impairment

7,865

4,184,830

4,192,695

54,738

General and administrative

21,734

91,816

113,550

132,609

Derivative (gain) loss, net

24,714

(181,614

)

(156,900

)

53,769

Loss on sale of properties

395

927

1,322

1,964

Amortization of deferred gain on sale

-

(5,116

)

(5,116

)

(9,069

)

Total operating expenses

238,379

4,651,298

4,889,677

1,559,576

INCOME (LOSS) FROM OPERATIONS

34,979

(4,192,294

)

(4,157,315

)

12,669

OTHER INCOME (EXPENSE)

Interest expense

(8,080

)

(73,054

)

(81,134

)

(191,047

)

Gain on extinguishment of debt

-

25,883

25,883

7,830

Interest income and other

136

211

347

1,602

Reorganization items, net

-

217,419

217,419

-

Total other income (expense)

(7,944

)

170,459

162,515

(181,615

)

INCOME (LOSS) BEFORE INCOME TAXES

27,035

(4,021,835

)

(3,994,800

)

(168,946

)

INCOME TAX EXPENSE (BENEFIT)

Current

2,463

2,718

5,181

-

Deferred

(14,501

)

(59,092

)

(73,593

)

72,220

Income tax expense (benefit)

(12,038

)

(56,374

)

(68,412

)

72,220

NET INCOME (LOSS)

$

39,073

$

(3,965,461

)

$

(3,926,388

)

$

(241,166

)

INCOME (LOSS) PER COMMON SHARE

Basic

$

1.03

$

(43.37

)

$

(103.11

)

$

(2.64

)

Diluted

$

1.03

$

(43.37

)

$

(103.11

)

$

(2.64

)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,080

91,423

38,080

91,285

Diluted

38,119

91,423

38,080

91,285

About Non-GAAP Financial Measures

WHITING PETROLEUM CORPORATION

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

(in thousands, except per share data)

Successor

Predecessor

Three Months
Ended
December 31, 2020

Three Months
Ended
December 31, 2019

Net loss

$

(1,197

)

$

(147,487

)

Adjustments:

Amortization of deferred gain on sale

-

(2,106

)

Loss on sale of properties

-

283

Impairment expense

3,233

2,137

Gain on extinguishment of debt

-

(3,232

)

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

55,308

46,338

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

(4,973

)

10,060

Restructuring and other significant cost drivers (1)

3,025

-

Tax impact of basis difference for Whiting Canadian Holding Company ULC

147

73,593

Adjusted net income (loss) (2)

$

55,543

$

(20,414

)

Adjusted net income (loss) per share, basic

$

1.46

$

(0.22

)

Adjusted net income (loss) per share, diluted

$

1.46

$

(0.22

)

____________

(1)

Includes charges related to a legal settlement as well as third-party advisory and legal fees incurred after emerging from chapter 11 bankruptcy.

(2)

Adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP measures. Management believes 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.

WHITING PETROLEUM CORPORATION

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

(in thousands, except per share data)

Successor

Predecessor

Non-GAAP

Predecessor

Four Months
Ended
December 31,
2020

Eight Months
Ended
August 31,
2020

Combined
Year Ended
December 31,
2020

Year Ended
December 31,
2019

Net income (loss)

$

39,073

$

(3,965,461

)

$

(3,926,388

)

$

(241,166

)

Adjustments:

Amortization of deferred gain on sale

-

(5,116

)

(5,116

)

(9,069

)

Loss on sale of properties

395

927

1,322

1,964

Impairment expense

3,233

4,161,885

4,165,118

17,866

Gain on extinguishment of debt

-

(25,883

)

(25,883

)

(7,830

)

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

24,714

(181,614

)

(156,900

)

53,769

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

(3,942

)

45,483

41,541

24,857

Reorganization items, net

-

(217,419

)

(217,419

)

-

Restructuring and other significant cost drivers (1)

12,359

32,888

45,247

7,780

Tax impact of basis difference for Whiting Canadian Holding Company ULC

(12,038

)

(55,346

)

(67,384

)

73,593

Adjusted net income (loss) (2)

$

63,794

$

(209,656

)

$

(145,862

)

$

(78,236

)

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

$

1.68

$

(2.29

)

$

(3.83

)

$

(0.86

)

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

$

1.67

$

(2.29

)

$

(3.83

)

$

(0.86

)

____________

(1)

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

(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 counts for the four months ended December 31, 2020 to calculate per share amounts. Refer to the Consolidated Statement of Operations presented earlier in this release for share counts used.

WHITING PETROLEUM CORPORATION

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

(in thousands)

Successor

Predecessor

Three Months
Ended
December 31, 2020

Three Months
Ended
December 31, 2019

Net loss

$

(1,197

)

$

(147,487

)

Interest expense

5,952

45,773

Interest income

(2

)

-

Income tax expense

147

73,593

Depreciation, depletion and amortization

57,392

204,322

Amortization of deferred gain on sale

-

(2,106

)

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

55,308

46,338

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

(4,973

)

10,060

Non-cash stock-based compensation

515

2,635

Gain on extinguishment of debt

-

(3,232

)

Loss on sale of properties

-

283

Impairment expense

3,233

2,136

Restructuring and other significant cost drivers (1)

3,025

-

Adjusted EBITDA (2)

119,400

232,315

Exploration expense

425

8,557

Adjusted EBITDAX (2)

$

119,825

$

240,872

____________

(1)

Includes charges related to a legal settlement as well as third-party advisory and legal fees incurred after emerging from chapter 11 bankruptcy.

(2)

Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. Such measures are presented because management believes they provide useful information to investors for analysis of the Company’s ability to internally fund debt service, working capital requirements, acquisitions and exploration and development. 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. Adjusted EBITDA and Adjusted EBITDAX for the three months ended December 31, 2019 were recast to conform with the current presentation. The revised presentation more closely aligns with similar non-GAAP measures presented by the Company’s peers as well as the Company’s definitions of such measures.

WHITING PETROLEUM CORPORATION

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

(in thousands)

Successor

Predecessor

Non-GAAP

Predecessor

Four Months
Ended
December 31,
2020

Eight Months
Ended
August 31,
2020

Combined
Year Ended
December 31,
2020

Year Ended
December 31,
2019

Net income (loss)

$

39,073

$

(3,965,461

)

$

(3,926,388

)

$

(241,166

)

Interest expense

8,080

73,054

81,134

191,047

Interest income

(2

)

(211

)

(213

)

(2

)

Income tax expense (benefit)

(12,038

)

(56,374

)

(68,412

)

72,220

Depreciation, depletion and amortization

77,502

338,757

416,259

816,488

Amortization of deferred gain on sale

-

(5,116

)

(5,116

)

(9,069

)

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

24,714

(181,614

)

(156,900

)

53,769

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

(3,942

)

45,483

41,541

24,857

Non-cash stock-based compensation

515

3,719

4,234

7,721

Gain on extinguishment of debt

-

(25,883

)

(25,883

)

(7,830

)

Loss on sale of properties

395

927

1,322

1,964

Impairment expense

3,233

4,161,885

4,165,118

17,866

Reorganization items, net

-

(217,419

)

(217,419

)

-

Restructuring and other significant cost drivers (1)

12,359

32,888

45,247

14,311

Adjusted EBITDA (2)

149,889

204,635

354,524

942,176

Exploration expense

4,632

22,945

27,577

36,872

Adjusted EBITDAX (2)

$

154,521

$

227,580

$

382,101

$

979,048

____________

(1)

Includes severance and restructuring charges incurred during two separate company restructurings in August 2019 and September 2020, cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to filing for and after emerging from chapter 11 bankruptcy and litigation settlements. The restructuring charges for the year ended December 31, 2019 exclude forfeitures of $7 million related to non-cash stock-based compensation which are reflected in “non-cash stock-based compensation.”

(2)

Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. Such measures are presented because management believes they provide useful information to investors for analysis of the Company’s ability to internally fund debt service, working capital requirements, acquisitions and exploration and development. 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. Adjusted EBITDA and Adjusted EBITDAX for the year ended December 31, 2019 were recast to conform with the current presentation. The revised presentation more closely aligns with similar non-GAAP measures presented by the Company’s peers as well as the Company’s definitions of such measures.

WHITING PETROLEUM CORPORATION

Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow and

Free Cash Flow

(in thousands)

Successor

Predecessor

Three Months
Ended
December 31,2020

Three Months
Ended
December 31, 2019

Net cash provided by operating activities

$

70,528

$

235,035

Changes in working capital

39,314

(46,352

)

Capital expenditures

(20,504

)

(102,702

)

Free cash flow (1)

$

89,338

$

85,981

Successor

Predecessor

Non-GAAP

Predecessor

Four Months
Ended

December 31,
2020

Eight Months
Ended
August 31,
2020

Combined
Year Ended
December 31,
2020

Year Ended
December 31,
2019

Net cash provided by operating activities

$

82,168

$

112,613

$

194,781

$

755,960

Changes in working capital

44,318

(59,815

)

(15,497

)

7,848

Capital expenditures

(23,993

)

(185,362

)

(209,355

)

(778,254

)

Free cash flow (1)

$

102,493

$

(132,564

)

$

(30,071

)

$

(14,446

)

____________

(1)

Free cash flow is a non-GAAP measure. Such 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. Such 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.

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.

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 revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as 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; 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 Exit 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; the impacts of hedging on our results of operations; our ability to use net operating loss carryforwards in future periods; 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.

Contacts:

Company Contact: Brandon Day
Title: Investor Relations Manager
Phone: 303‑837‑1661
Email: Brandond@whiting.com

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