Whiting Petroleum stock

Whiting Petroleum (WLL) stock rose 4.4% in the week ending January 9, 2018, from the previous week ending January 2, 2018. However, the stock has fallen ~44% on a YoY (year-over-year) basis.

How Will 4Q17 Drive Whiting Petroleum Stock?

As you can see in the above graph, Whiting Petroleum has been on an uptrend—mainly due to rising crude oil prices (USO) (UCO). Crude oil prices closed at $62.96 per barrel on January 9, 2018—the highest price in three years. Crude oil prices (USO) (UCO) have remained at or above $60 per barrel since December 29, 2017. Oil prices have been supported by positive expectations about global growth, a production cut extension by OPEC countries, and geopolitical tensions.

On a YoY basis, crude oil prices have risen 20%. Meanwhile, natural gas prices (UNG) (UGAZ) have fallen 12% during the same period.

Whiting Petroleum underperformed the energy sector (XLE), which fell 1.2% on a YoY basis. It underperformed the broader market (SPY) (SPX-INDEX), which rose ~22% during the same period.

How will 4Q17 earnings impact Whiting Petroleum stock?

Whiting Petroleum is expected to report its 4Q17 and fiscal 2017 earnings on February 20, 2018. In, 4Q17, its revenue and earnings are expected to be better than the previous year. Stronger crude oil prices in 4Q17 could support higher revenues in 4Q17. Investors will be watching to see how things play out for Whiting Petroleum and if positive earnings boost its stock. Crude oil makes up a major chunk of Whiting Petroleum’s total production. In 3Q17, ~84% of Whiting Petroleum’s production was made up of crude oil and natural gas liquids.

Investors will also watch to see Whiting Petroleum’s capex plans for 2018. Whiting Petroleum’s management announced a capital budget of $1.1 billion for 2017, which was reduced to $950 million. However, the increased capex wasn’t supported by a production growth forecast. Whiting Petroleum’s production guidance for 2017 was 117.5 Mboepd (thousand barrels of oil equivalent per day)—compared to its production of ~130 Mboepd in 2016, which likely disappointed some investors.

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