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Whiting Petroleum: What’s Supporting the Upsurge?


Apr. 4 2018, Updated 3:46 p.m. ET

Whiting Petroleum stock

Whiting Petroleum (WLL) stock continued to surge in the week ended April 2, 2018, despite a drop in crude oil prices. However, crude oil prices have stayed strong since the end of 2017, which has supported WLL stock. On a year-over-year basis, crude oil prices have risen 25.0%.

Year-over-year, WLL stock has fallen ~12.4%. In comparison, the Energy Select Sector SPDR ETF (XLE) has declined ~5.3% year-over-year. XLE and WLL have both underperformed the broader market ETF (SPY). The S&P 500 SPDR ETF has risen ~9.4% in the same period.

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WLL’s capex trends

Whiting Petroleum (WLL) has made some drastic capital spending decisions over the past few years. In 2016, the company cut its capital spending by 76.0%. In 2017, it forecast a capex budget that was almost double that at $1.1 billion, which was later lowered to $950.0 million. In 2018, the company has forecast an even lower capex budget of $750.0 million.

Whiting Petroleum’s fiscal 2018 production guidance is ~9.0% higher than its 2017 production, despite lower spending levels. This trend could also support WLL stock. WLL’s production guidance for 2017 was 10.6% lower than its 2016 production levels, despite the high spending levels.

WLL forecast ~$200.0 million of free cash flow in 2018 at $55.00 NYMEX oil prices. Crude oil prices are currently trading at $63.00 per barrel.


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