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Whiting Petroleum’s 1Q16 Operational Highlights

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Whiting Petroleum’s 1Q16 production

Whiting Petroleum’s (WLL) total production volumes in 1Q16 were ~147 MBoepd (thousand barrels of oil equivalent per day). This represents a YoY decline of ~12%.

On April 14, WLL had entered into a “wellbore participation agreement” with an unknown private player. Under the agreement, the private party will pay 65% of drilling and completion costs to earn a 50% working interest in 44 gross Williston Basin wells.

Through this agreement, WLL anticipates adding production and proved reserves without increasing its capex budget. As a result, WLL has increased its 2016 production forecast to 131.4–136.9 MBoepd from the previous range of 128–138 Mboepd it had provided in its 4Q15 earnings.

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1Q16 realized prices

Whiting Petroleum’s (WLL) crude oil price realizations, including the effect of hedges in 1Q16, were $32.61 per barrel—25% lower than the realized prices in 1Q15.

Its natural gas price realizations were $1.05 per thousand cubic feet—60% lower than the realized prices in 1Q15. Whiting Petroleum’s natural gas liquids price realizations were $5.48 per barrel, down ~58% compared to 1Q15.

Capex guidance

Whiting Petroleum’s capex guidance remained unchanged. WLL had provided a 2016 capex budget of $500 million. This represents an 80% decline YoY. It’s one of the highest capex cuts announced by an oil and gas company this year. Whiting Petroleum expects to invest $440 million, or 88% of the 2016 capex, in its core Bakken and Niobrara regions.

Many upstream companies have reduced their 2016 capex in response to lower energy prices (USO) (UNG). Newfield Exploration (NFX) and Concho Resources (CXO) lowered their 2016 capex by ~50% and 35%, respectively, from 2015.

Anadarko Petroleum’s (APC) 2016 capex is also ~50% less than its 2015 capex. These companies make up ~10% of the iShares US Oil & Gas Exploration & Production ETF (IEO).

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