Whiting to ramp up Bakken activity in second quarter of 2018

By Patrick C. Miller | May 07, 2018

Whiting Petroleum Corp. is planning to increase the pace of operations in the Bakken shale play during the second quarter this year to accelerate the company’s growth.  

In reporting on first quarter results, Whiting said its focus will shift from drilled, uncompleted wells in Colorado’s DJ Basin to Bakken development during the second half of 2018.

“For the second quarter in a row, Whiting generated discretionary cash flow that significantly exceeded its capital expenditures,” said Bradley Holly, the company’s chairman, president and CEO. “As we move through the second quarter into the summer months, we plan to increase our pace of operations in the Bakken in order to accelerate our growth profile.

“We remain on target with our $750 million capex budget as the focus shifts from Redtail drilled, uncompleted wells to Bakken development in the second half of the year,” Holly added.

During the first quarter of 2018, Whiting’s production of 127,050 barrels per day exceeded its midpoint guidance. Quarterly production totaled 11.4 million barrels of oil equivalent.

“Optimized completions are greatly benefitting Whiting because it’s giving us a leg up on the competition,” Holly said. “We’re seeing real wide results in the field of how optimized completions are driving performance and driving success.”

Capex for the first quarter 2018 was $187 million. First quarter 2018 net cash provided by operating activities of $233 million exceeded capital expenditures by $46 million and first quarter 2018 discretionary cash flow of $290 million exceeded capital expenditures by $103 million.

Michael Stevens, Whiting’s senior vice president and chief operating officer, said, “Production exceeded midpoint of guidance and the oil prices were the highest we’ve been since prior to 2015. These two items—along with excellent cost control—allowed us to generate discretionary cash flow of $100 million greater than our capital expenditures.”

Holly said, “With that free cash flow, it gives us a ton of options to reinvest that in our own inventory, potentially pick up someone else’s inventory or to pay down debt, among other things.”

Whiting’s depreciation, depletion and amortization (DD&A) of $16.43 per barrel of oil equivalent, oil differentials of $4.31 per barrel and natural gas differentials of $1.48 per thousand cubic feet all came in below the low end of guidance. Guidance at the midpoint for such metrics called for $17.50 per boe, $4.50 per barrel and $1.50 per thousand cubic feet, respectively.

During the first quarter 2018 and subsequent to the quarter, Whiting added to its hedges. It’s now 71 percent hedged for 2018 and 15 percent hedged for 2019 as a percentage of March 2018 production.