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Key Observations on Whiting Petroleum’s Performance in the Bakken

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WLL’s Bakken performance

According to Whiting Petroleum’s (WLL) September presentation, its initial three-month average gross revenue per well, represented by the bars in the chart below, exceeded those of its peers. The chart maps data for all wells completed in the Bakken formation between March 2016 and February 2017.

WLL’s peers in the analysis include Oasis Petroleum (OAS), Newfield Exploration (NFX), Hess (HES), QEP Resources (QEP), WPX Energy (WPX), and Continental Resources (CLR).

WLL’s management noted in the 2Q17 earnings conference, “even though our wells earned good returns at and below current prices, we believe in disciplined capital allocation. We have been able to reduce our capital spending by 14% for 2017 and still plan to deliver 14% production growth.”

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Bakken economics

In a previous series, we discussed the break-even prices of major US shale plays including the Bakken where Whiting Petroleum’s operations are mainly focused.

The Bakken region has one of the highest break-even oil prices near $55 per barrel. In comparison, the Midland and Delaware basins, which lie in the Permian Basin, have the lowest break-even prices at just over $40 per barrel.

WLL had noted in its September 2017 presentation that it expects its oil price differentials to NYMEX to range between $7.50 and $8.50 this year.

WLL’s Bakken peer, Oasis Petroleum (OAS), considers itself even at $45 crude oil prices. Currently, crude oil prices are trading at $47.29.

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