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What’s Happening with Whiting Petroleum Stock Recently?


Nov. 20 2020, Updated 12:20 p.m. ET

Whiting’s stock performance

Whiting Petroleum (WLL) stock has been surging since the beginning of the year, rising ~2.8% in the five trading sessions leading up to June 11 and ~96% year-to-date.

Rising crude oil prices (DBO) have been supporting this rally. Recently, though, oil prices have tumbled, coming under pressure due to rising US production and concerns over increased output by OPEC and Russia. Toward the end of last week, however, crude oil prices rose following a weaker US dollar. Read US Crude Oil Prices Increased on June 7 to learn more.

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What’s behind WLL’s rally?

Strong Q1 2018 earnings may also have supported WLL. Its production rose 8% YoY (year-over-year) in Q1 2018. Its 2018 production guidance is 128.4 Mboepd (thousand barrels of oil equivalent per day), ~9% higher than its 2017 production. Whiting Petroleum’s capex guidance for 2018 is $750 million compared to $912 million in 2017.

WLL’s market cap is $4.8 billion. Its peer Oasis Petroleum (OAS), which has a similar market cap of ~$4.2 billion, has forecast E&P (exploration and production) capex of $835 million in 2018 compared to $836 million in 2017. Newfield Exploration (NFX), which has a higher market cap of $6 billion, has forecast a capex budget of $1.3 billion for 2018, the same as its 2017 spending. In comparison, SM Energy (SM), which has a lower market cap of ~$2.7 billion, has forecast capex of $1.3 billion for 2018 compared to its 2017 capex of $936 million.

Whiting’s management has also been focusing on lowering its costs. WLL’s operating expenses in Q1 2018 were ~$417 million compared to $449 million in Q1 2017. Well costs are expected to reduce 25% in 2018 compared to their 2014 levels and 4.2% compared to their 2017 levels.

Also, WLL management is projecting ~$200 million worth of free cash flow in 2018 at $55 NYMEX oil prices, which are currently trading at ~$65 per barrel. The company’s first-quarter net cash provided by operating activities was $233 million and exceeded its capex by $46 million.

Continued efforts to reduce operating costs leading to improved cash flows, along with increasing crude oil prices, should continue to benefit WLL stock.

Year-over-year performance

On a YoY basis, WLL stock has risen ~135%, while crude oil prices have risen ~45%. In comparison, the Energy Select Sector SPDR ETF (XLE) has risen ~19% YoY. Meanwhile, the S&P 500 SPDR ETF (SPY) has risen ~14.3% in the same period.


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