What’s Fueling Whiting Petroleum’s Upward Momentum?

Whiting Petroleum stock

Whiting Petroleum (WLL) stock rose ~6.0% in the week ended May 15. WLL stock has been soaring since the start of this year. WLL stock has been surging along with crude oil prices (DBO)(UCO), which have remained above $70.00 per barrel recently.

What’s Fueling Whiting Petroleum’s Upward Momentum?

What’s supporting WLL stock?

Higher crude oil prices and positive earnings from the fourth quarter of 2017 and the first quarter have supported WLL stock. The company has also focused on lowering its costs. Operating expenses in the first quarter reached ~$417.0 million, compared to $449.0 million in the first quarter of 2017. The company was able to reduce its costs partly because of asset sales.

When asked about additional initiatives being taken by the company to lower costs, WLL management commented during its first-quarter earnings conference, “Some of the things that we’re currently focusing on and are continuing to focus on would be getting more of our water on the pipeline and continuing to try and renegotiate and bring our price for saltwater disposal down. That’s one of our highest cost categories.”

Key strategic initiatives for 2018

WLL management is considering the possible sale of its Redtail assets in the DJ Basin, saying that it expects bids through May. The company expects to make a decision by the end of the second quarter or the beginning of the third quarter. With the proceeds from the Redtail assets, the company expects to pay down debt and reinvest for growth.

Year-over-year performance

On a year-over-year basis, WLL stock has risen ~42.1%, while crude oil prices have risen ~53.0% year-over-year. The Energy Select Sector SPDR ETF (XLE) has increased ~14.0% year-over-year. Meanwhile, the S&P 500 SPDR ETF (SPY) has increased ~13.1% in the same period.