Whiting CEO outlines Bakken optimism

By Luke Geiver | June 01, 2016

Drilling in the Bakken is the most important thing for Whiting Petroleum Corp., said President and CEO Jim Volker, during his address before a massive crowd on hand for a Bakken event that drew oil CEO’s and Donald Trump. Volker spoke on Whiting’s current Bakken portfolio but also delved into several other broader topics related to oil states, prices and banking support.

While Volker explained the basics of Whiting’s oil and gas portfolio and some of its recent agreements with a private group to share the costs to develop some of its Bakken acreage, he also spoke about North Dakota versus other oil states and his recent dealings in oil hedging.

“This state is really one of the best run states for having all the constituents all pulling on the same oar,” he said. “It feels like home here.”

Following his commentary on North Dakota, Volker spoke on Whiting’s plans to hedge. For 2016, the company is roughly 50 percent hedged. The Denver-based company has a 22-bank coalition behind it and has $2.5 billion of credit available if it wants to ramp up activity or make an acquisition. “The crude oil is a reflection of the bets being placed on the oil market,” he said. In some hedging negotiations earlier this month some oil traders were willing to give a 2016 ceiling price of $68, he said, “because they think oil will be higher.” 

Of the 150,000 barrels per day Whiting produces across all of its acreage, 125,000 barrels of that total production volume comes from North Dakota. “We are optimistic about the Bakken,” he said.

Although Wall Street analysts are currently more enamored with the Midland Basin, Volker believes the Bakken and DJ Basin create more net present value than any other basins in the country. At $50/b, Whiting receives 55 percent initial rate of return on its Bakken wells, a number that equates to roughly 4 to 1 on money invested into the well over the life of that well. “At $60/b you are getting your money back in about a year,” he added. “This allows you to develop your acreage with your own cash flow.” 


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