Whiting’s 2017 capex
In its 2Q17 earnings conference, Whiting Petroleum (WLL) lowered its capex forecast for 2017 from $1.1 billion to $950 million. The company’s capex in 2016 was ~$554 million.
As we can see in the image above, a significant chunk of WLL’s 2017 capex will be allocated to the Williston Basin (54.5%) and Redtail regions (~35%). In the Williston basin, WLL’s operations are focused on the Bakken and Three Forks formations. Its core operations also include the DJ basin area, where it operates in the Redtail Niobrara regions.
The Williston Basin is home to the Bakken Shale, one of the biggest shale plays in the United States. Hess (HES) and Continental Resources (CLR) are some of the key operators in the Bakken Shale. Other operators in the region include Newfield Exploration (NFX) and Oasis Petroleum (OAS).
The top players in the DJ Basin include Anadarko Petroleum (APC) and Noble Energy (NBL). WLL’s management noted in 2Q17 that the updated guidance was based on a $45 crude oil price environment. Crude oil prices are currently trading around $49.30 per barrel.
Additionally, Whiting Petroleum also dropped two rigs, one in the Williston Basin and one in the DJ Basin. It will be running a four-rig program (all in the Williston Basin) through the end of 2017.
Key announcements by WLL
WLL has likely lowered its 2017 capex budget in response to lower crude oil prices. Another step the company took that was probably triggered by weak oil prices was an asset sale to tackle its debt load. In August, Whiting Petroleum announced that it planned to sell its North Dakota Fort Berthold assets for $500 million in cash. The proceeds were used to pay down a major portion of WLL’s $550 million bank debt.
On September 7, 2017, Whiting Petroleum announced it plans to undertake a reverse stock split of its common stock. To know more, read Whiting Petroleum: Is the Reverse Stock Split a Good Idea?
As we can see, WLL is focusing exclusively in the Bakken for the rest of the year. Continue to the following part of the series to know more.