2Q17 and 2017 production guidance

Whiting Petroleum’s (WLL) production guidance for 2Q17 is 10.2 MMboe–10.8 MMboe (million barrels of oil equivalent). The company’s 2017 production guidance is 45.2 MMboe–46.2 MMboe, which represents a decline of ~4.0% compared to its production volumes in 2016.

However, between 1Q17 and 4Q17, WLL’s production is expected to rise 23%.

Whiting Petroleum’s Production Expectations for 2017

Whiting Petroleum’s 1Q17 production

Whiting Petroleum’s (WLL) 1Q17 production was ~117.4 Mboepd (thousand barrels of oil equivalent per day), which compares to 146.8 Mboepd in 1Q16 and 118.9 Mboepd in 4Q16. The majority of WLL’s 1Q17 operations came from its Williston Basin operations, where it focuses on the Bakken and Three Forks formations. Production from the Niobrara region formed 6% of its total 1Q17 production. So the company’s core operating region is the Bakken and Three Forks region.

Other key players in the Bakken include Continental Resources (CLR), Hess (HES), Newfield Exploration (NFX), and Oasis Petroleum (OAS).

Other operational highlights in 1Q17

Speaking about its operational efficiencies in 2Q17, WLL’s management noted, “Lease operating expense (LOE) benefited from a comprehensive water-handling plan and a maintenance program that has reduced well downtime across Whiting’s properties. Depreciation, depletion and amortization (DD&A) benefited from enhanced completions and the sale of the Company’s North Dakota midstream assets. Oil differentials benefited from the addition of new pipeline infrastructure in the Williston Basin.”

The company then noted that it had increased its production guidance for 2017 slightly, from a range of 45 MMboe–46 MMboe, provided in 4Q16, to 45.2 MMboe–46.2 MMboe.

Mismatch between capex and production guidance

However, this slight increase in forecast 2017 production still doesn’t match the forecast 2017 capital budget. WLL’s capex (capital expenditure) in 2017 is slated to increase by 98.5%, whereas production in 2017 is expected to fall ~4%, as we saw above.

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