On April 25, Whiting Petroleum Corp. (NYSE: WLL), which has a market cap of $6.44 billion and a price-to-earnings ratio of 11.60, posted first quarter net income available to common shareholders of $98.2 million, or 83 cents a share, compared with $19.1 million, or 16 cents a share, a year ago.
Excluding items, Whiting earned $1.03 per share.
Along with an average daily production rate increase of 22 percent to 80,747 barrels of oil equivalent in the first quarter, the Denver-based oil and gas company’s revenue rose 30.4 percent to $563.7 million on a year-over-year basis.
Whiting raised its capital expenditure estimate for the year by $200 million to $1.8 billion, as well as increased its full-year production outlook from 77,300-81,100 boe per day to 79,235-82,515 boe a day.
Equities research analysts at Barrington Research, which started coverage of Whiting shares on May 2, reported analysts expect Whiting will earn $1.13 per share in the second quarter.
All in all, “Whiting is off to a great start this year,” company Chairman and CEO James J. Volker said per an earnings call transcript provided online by Seeking Alpha at www.SeekingAlpha.com. He noted the company’s first quarter production was 14 percent higher than the fourth quarter of last year.
“We now project 17 percent to 22 percent growth over 2011 versus our prior forecast of 14 percent to 20 percent,” Volker said, pointing out that Whiting “had announced several notable exploration wells at our DJ Basin Niobrara and Permian basin Wolfcamp plays and we’re expanding our activity in those areas.”
He also said the company’s revised budget partly “reflects the high pace of activity in the Williston basin,” where Whiting is currently running 19 rigs and has more than 2,500 drilling locations that Volker said represents 10 years-plus work.
The company’s first-quarter financials show Whiting controls nearly 702,000 net acres in the Bakken and related Williston basin plays, an increase of more than 20,000 acres in the first quarter. (See adjacent chart.)
The Pronghorn play on the southeastern edge of the Bakken maturity limit received a lot of attention during the company’s April 26 presentation.
Here is some of what Volker and other company executives had to say about Pronghorn:
• Target is Pronghorn Sand and upper Three Forks horizon, which can be tapped with one wellbore.
• The two typical production profile EURs (estimated ultimate recovery) range from 600,000 boe to 350,000 boe.
• Average well cost is about $7 million.
• Pronghorn delivered very similar results to the Sanish Bakken in terms of productivity.
• Did have nine rigs in Lewis & Clark Pronghorn area, recently lowered to five, because going to be drilling all wells off pads there, either two or three wells per pad “depending how the pattern works out. … We think we’re going to see a benefit on the cost side. … And we also think we’re going to be able to drill more wells with fewer rigs because we’re going to be eliminating all those rig move days out of there. So our goal is to get to the same endpoint with fewer rigs.”
• Pronghorn acreage de-risking is up in the first quarter “about 8,000 or 9,000 acres” in the 100,000-acre prospect.
Slides from Whiting’s April 26 presentation and a May 1 presentation are available on its website: http://www.whiting.com/investor-relations/presentations-and-media-events/
Slide 15 from the April 26 presentation shows a comparison between the average IP, or initial production for the first 24 hours, and for first 30, 60, and 90 day production of Whiting-operated Sanish Bakken and Pronghorn wells in 2011.
The Sanish Bakken average IP is 2,017, with the Pronghorn at 803, but after the first day production begins to level out, with the first 30 days at 803 boe per day for the Sanish Bakken and 772 for Pronghorn; in the first 60 days, Pronghorn slightly surpasses the Sanish Bakken, 659 to 650; in the 90-day period, Sanish Bakken is in the lead again with 589 boe a day to Pronghorn’s 577.
Best cumulative production
The next slide shows Whiting in the lead for cumulative production by operator in the first six months from all Bakken and Three Forks wells drilled in North Dakota since January 2009.
The data was compiled by IHS Energy Inc. and the North Dakota Industrial Commission, and carries an April 2012 date.
Whiting’s average six-month output is 4,000 boes higher than the second ranked operator and “more than 27,000 boes better than the average of the next 25 operators.”
The top five operators in the lead for cumulative production in the first six months are, from first to last, Whiting, Brigham, Enerplus, Murex and Slawson.
Jewel in the pack
Finally, in the Seeking Alpha transcript, slide 17 shows “412,000 barrels per day of planned expansion for the Williston basin for the balance of 2012,” including rail and pipeline transport.
“This should bring total takeaway capacity to over 1 million barrels per day by year-end 2012, and go a long way toward relieving the high differentials we experienced in the first quarter of 2012,” Whiting said on the slide.
