Q2 08 Average Production of 44,200 BOE/D Up 8.0% from Q2 07 June 2008 Production of 47,100 BOE/D Up 12.7% from March 2008 Average of 41,800 BOE/D
DENVER, July 30 /PRNewswire-FirstCall/ -- Whiting Petroleum Corporation
(NYSE: WLL) today reported record second quarter 2008 net income of
$80.4 million, or $1.90 per basic and diluted share, on total revenues of
$345.8 million. This compares to second quarter 2007 net income of
$26.5 million, or $0.72 per basic and diluted share, on total revenues of
$192.9 million. During the second quarter of 2008, as a result of rising
commodity prices, Whiting recognized a non-cash, after-tax unrealized loss on
commodity derivative contracts of $12.9 million, or $0.30 per share.
Discretionary cash flow in the second quarter of 2008 totaled a record
$216.3 million, more than double the $100.2 million reported for the same
period in 2007. A reconciliation of discretionary cash flow to net cash
provided by operating activities is included at the end of this news release.
The increases in net income and discretionary cash flow in the second quarter
of 2008 versus the comparable 2007 period were primarily the result of an 8%
increase in the Company's total equivalent production, a 67% increase in the
Company's net realized oil price and a 44% increase in its net realized gas
price.
Production in the second quarter of 2008 totaled a record of 4.02 million
barrels of oil equivalent (MMBOE), of which 2.80 million barrels were crude
oil (70%) and 1.22 MMBOE was natural gas (30%). This second quarter 2008
production total equates to a daily average production rate of 44,200 barrels
of oil equivalent (BOE), compared to the 40,920 BOE per day average rate in
2007's second quarter. The second quarter 2008 daily average production rate
of 44,200 BOE also represents a 7.5% increase from the first quarter 2008
daily average rate of 41,120 BOE. June 2008 average production of 47,100 BOE
per day represents a 12.7% increase from the March 2008 average daily rate of
41,800 BOE.
The net profits interest in properties conveyed to third-party holders of
Whiting USA Trust I, which closed April 30, 2008, represented production of
approximately 3,100 BOE per day in April 2008. These volumes were included in
Whiting's production totals only for the month of April 2008. Whiting's
acquisition of the Flat Rock field in the Uinta Basin closed May 30, 2008.
Net production of 3,010 BOE per day from the Uinta Basin properties was
included in Whiting's production totals only for the month of June 2008.
Production increases were due to a combination of successful drilling in
the prolific Piceance and Bakken projects and continued increases in the
Company's CO2 flood projects. The primary contributor to Whiting's production
increases in the second quarter of 2008 came from new wells in the Middle
Bakken formation in the Sanish and Parshall fields in Mountrail County, North
Dakota. The following table summarizes the Company's net production from the
Sanish and Parshall fields in the second quarter and in June 2008:
Average
Number of Operated andQ2 08 Net June Net
Producing Non-Op. Production Production
Field Wells WI NRI (BOE/D) (BOE/D)
Sanish 17 63% 51%2,4003,400
Parshall 48 25% 20%4,0005,000
Totals 656,4008,400
Whiting has increased its exploration and development budget $85 million
to $850 million for 2008. The increase is due primarily to additional
exploration and development activities across the Company's regions.
Six Months Financial and Operating Results
For the six months ended June 30, 2008, Whiting reported net income of
$142.8 million, or $3.38 per basic and $3.37 per diluted share, on total
revenues of $609.8 million. This compares to first half 2007 net income of
$37.1 million, or $1.01 per basic and diluted share, on total revenues of
$352.8 million. Discretionary cash flow for the first six months of 2008
totaled $377.8 million, compared to $174.2 million in the comparable 2007
period.
Production in the first half of 2008 totaled 7.76 MMBOE, or 42,660 BOE per
day, compared to first half 2007 production of 7.26 MMBOE, or 40,090 BOE per
day.
James J. Volker, Whiting's Chairman, President and CEO, commented, "All of
our production growth in the first half of 2008 was organic. Our net
production from the Middle Bakken formation more than doubled from March to
June to a rate of more than 8,400 barrels of oil equivalent per day. Our net
production from the Boies Ranch prospect in the Piceance Basin ramped up to
more than 6 million cubic feet per day in June from 744 thousand cubic feet
per day in March. In addition, combined production from our CO2 projects
increased 3% to 11,700 BOE per day in June from 11,400 BOE in March."
Mr. Volker continued, "We expect the momentum established in the second
quarter to continue into the second half of this year and into 2009. We have
raised our production guidance for 2008 to a range of 16.5 MMBOE to
16.7 MMBOE. The mid-point of this range would represent a 12.9% increase over
our 2007 production total of 14.7 MMBOE."
As of July 30, 2008, 14 operated drilling rigs and 34 operated workover
rigs were active on our properties. We were also participating in the
drilling of 10 non-operated wells, most of which are located in the Parshall
field. The breakdown of our operated rigs is as follows:
Region DrillingWorkover
Rocky Mountain
Bakken / Williston 5 4
Piceance 2 1
Green River 1 2
Permian 2 6
Mid-Continent 0 2
Gulf Coast 1 1
Postle 2 5
North Ward Estes1 13
Totals 14 34
Other Noteworthy Events and Results
-- Whiting completed six significant single-lateral Bakken oil and gas
producers in the Sanish field during the past 10 weeks. The following table
summarizes the results:
IP
(BOE/D)
Completion24-hr.1st 30
Well NameWI NRI DateTest Days (BOE/D)
Stenseth Trust
11-5H 73% 59%07/06/08 3,044 N/A
Lacey 11-1H86% 70%07/01/08 2,330 N/A
Behr 11-34H54% 44%06/20/08 3,245 1,335
Abbott 11-18H 99% 80%06/16/08 1,959 1,088
Locken 14-28H 78% 63%05/31/08 1,719 935
Braaflat 11-11H97% 78%05/23/08 2,997 1,505
-- On May 30, 2008, Whiting completed its acquisition from Chicago Energy
Associates, LLC of interests in producing gas wells and development acreage in
the Flat Rock field in Uintah County, Utah for $364.4 million in cash. The
acquisition also included gas gathering facilities. The effective date of the
acquisition was January 1, 2008. Whiting funded the purchase price with
borrowings under its existing bank credit facility.
Net production from the Flat Rock field averaged 18.1 million cubic feet
(MMcf) of gas per day (3,010 BOE per day) in June 2008. Whiting recently
began drilling its first well in Flat Rock. The Ute Tribal 1-30-14-20, in
which Whiting holds a 100% working interest, is scheduled to test the Entrada
sandstone at a depth of approximately 11,500 feet. Approximately 17.5 MMcf of
gas per day of the field's daily gas output of 18.1 MMcf is from seven Entrada
gas wells. Whiting expects to drill and complete four additional 100%-owned
Entrada wells by year-end 2008.
Forty-nine square miles of 3-D seismic support a current plan of up to
59 additional wells to more fully develop the Entrada and other formations on
the 22,029 gross and 11,533 net acres included in the acquisition. Of these
59 additional wells, Whiting expects to operate 15 while 44 are expected to be
operated by another experienced area operator.
-- On April 30, 2008, Whiting closed the initial public offering of
Whiting USA Trust I at $20.00 per trust unit. Whiting received net proceeds
from this offering of $215.1 million. The trust units began trading on the
NYSE on April 25, 2008 under the symbol WHX. After completion of the
offering, Whiting owns 2,186,389 (15.77%) out of the 13,863,889 total
outstanding trust units. Based on the net proceeds from the initial public
offering of $215.1 million, Whiting received $31.17 per BOE from the offering.
-- As mentioned previously, Whiting's net production from the Middle
Bakken formation in the Sanish and Parshall fields of Mountrail County, North
Dakota averaged 8,400 BOE per day in June 2008, more than double the 4,153 BOE
average daily rate in March 2008.
Whiting's net production from the Sanish field in June 2008 averaged
3,400 BOE per day, compared to a net daily rate of 1,175 BOE in March 2008.
Whiting is currently drilling or completing seven operated wells in the Sanish
field with an average working interest of 82%. The Company currently has five
operated rigs working in the field and expects to have nine operated rigs
drilling in the area by year-end 2008. Whiting has completed nine operated
wells in the Sanish field in 2008 and expects to complete an additional 20 to
25 wells during the balance of the year. Whiting expects all of these to be
single-lateral wells drilled on 1,280-acre spacing units. Ultimately, Whiting
estimates that it has 128 operated locations in the Sanish field that are
expected to be drilled during the next 36 months. Potential in-fill drilling
(drilling an 8,000-foot to 10,000-foot lateral across two 1,280-acre spacing
units) would add to this total. In addition, Whiting plans to test the Three
Forks/Sanish formation in Mountrail County in the third quarter of 2008. We
hold a total of 118,571 gross acres (83,310 net acres) in the Sanish field.
In late June, the Company completed construction of the first phase of its
Robinson Lake gas processing plant in the Sanish field and was selling
approximately 170 net barrels per day of natural gas liquids (NGLs) in July
2008. The installation of a 17-mile natural gas pipeline in the Sanish field
is nearing completion. Gas sales from Sanish of approximately 1 MMcf per day
are expected to begin in the fourth quarter of 2008. Following the
anticipated expansion of the Robinson Lake gas plant in the first quarter of
2009, Whiting-operated net gas sales are expected to approximate 3 MMcf to
4 MMcf per day.
In the Parshall field, Whiting owns interests in 72,790 gross acres
(14,982 net acres). As of June 30, 2008, Whiting had participated in a total
of 48 wells that produce from the Bakken formation, 24 of which were completed
in 2008. Whiting expects to participate in a total of 60 to 70 wells (up from
the previous estimate of 50 to 60 wells) in the Parshall field in 2008 with an
average working interest of 25%. Eight drilling rigs were working in the
Parshall field as of July 30, 2008. Whiting's net production from the
Parshall field in June 2008 averaged 5,000 BOE per day, compared to a net
daily rate of 2,978 BOE in March 2008.
-- At our Boies Ranch prospect in Rio Blanco County, Colorado, 13 wells
were producing at a combined average net rate to Whiting of 6.1 MMcf of gas
per day in June 2008. Whiting holds an average working interest of 71% and an
average net revenue interest of 62% in the 13 gas wells. In addition, two
wells are being drilled and eight wells are being completed or waiting on
completion. Of these eight wells, Whiting expects five to be completed and
producing into a sales line by the end of August 2008 and the remaining three
by the end of September.
Whiting recently completed a 3-mile, 10-inch diameter pipeline that has a
total daily capacity of approximately 80 MMcf of gas at its Boies Ranch
prospect (Sulphur Creek field). Start-up of the pipeline facilities occurred
on May 13, 2008. The new pipeline connects to a supply trunk line feeding a
750 MMcf per day treating and processing facility connected to the Rockies
Express pipeline (REX) that gives Whiting access to multiple intrastate and
interstate markets. The new pipeline connection will allow Whiting to market
all of its gas at Boies Ranch without restriction. The 42-inch diameter REX
pipeline currently has a capacity of transporting 1.5 Bcf of gas per day.
Whiting holds 2,760 gross acres (1,570 net acres) on the Boies Ranch and
Jimmy Gulch prospects. In addition, we own 14,133 gross federal lease acres
(2,501 net acres) in this immediate area. Based on 20-acre spacing units,
Whiting plans to drill a total of 110 wells on Boies Ranch and Jimmy Gulch,
24 of which are planned for 2008. Downspacing to 10 acres in certain areas of
the field would generate additional locations. Drilling operations are
expected to commence at Jimmy Gulch in August 2008.
-- Whiting's expansion of its CO2 flood at the Postle field, located in
Texas County, Oklahoma, continues to generate positive results. Production
from the field has increased from a net 4,200 BOE per day at the time of its
acquisition in August 2005 to a net 6,300 BOE per day in June 2008, an
increase of 50%. This project is part of the Company's plan to expand the
existing water and CO2 flood from the eastern half of the Postle field to the
western half of the field. The field includes six producing units covering a
total of approximately 25,600 gross acres (24,223 net acres) with working
interests of 94% to 100%.
-- The North Ward Estes field in Ward and Winkler Counties, Texas is
responding to the Company's CO2 injection, which was initiated in May 2007.
Net production from North Ward Estes in June 2008 averaged 5,400 BOE per day,
up from 3,600 BOE per day during the first quarter of 2005, just prior to our
July 2005 agreement to acquire the North Ward Estes field. The current rate
continues to increase over the net daily rate of 5,200 BOE per day in March of
2008 and 5,050 BOE per day in December 2007.
The following table summarizes the Company's net production and commodity
price realizations for the quarters ended June 30, 2008 and 2007:
Three Months Ended
Production 6/30/08 6/30/07Change
Oil and condensate (MMbbls) 2.802.38 18%
Natural gas (Bcf)7.348.06 (9%)
Equivalent (MMBOE) 4.023.728%
Average Sales Price
Oil and condensate (per Bbl):
Price received $113.28 $57.38 97%
Effect of crude oil hedging (17.19) -
Realized price $96.09 $57.38 67%
Natural gas (per Mcf):
Price received $10.02 $6.95 44%
Effect of natural gas hedging - -
Realized price $10.02 $6.95 44%
The decline in gas sales was primarily the result of the sale of South
Texas properties, which was effective July 1, 2007.
Whiting recorded a loss of $48.1 million on its crude oil hedges during
the second quarter of 2008, and no gain or loss on its natural gas hedges in
the second quarter of 2008. A summary of Whiting's outstanding hedges is
included later in this news release.
Second Quarter and First Half Costs and Margins
A summary of production, cash revenues and cash costs on a per BOE basis
is as follows:
Per BOE, Except Production
Three Months Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
Production (MMBOE) 4.02 3.72 7.76 7.26
Sales price, net of hedging $85.14$51.74 $78.08 $48.56
Lease operating expense14.29 13.9614.5813.92
Production tax 6.48 3.24 5.63 2.99
General & administrative5.72 2.38 4.46 2.36
Exploration 1.45 1.16 1.83 1.54
Cash interest expense 3.52 5.13 3.63 5.09
Cash income tax expense(0.21) 0.41 0.11 0.30
$53.89$25.46 $47.84 $22.36
With the exception of the Company's basis differentials, all of its
financial and operating statistics for the second quarter were in line with or
better than its previously announced guidance.
During the second quarter, the company-wide basis differential for crude
oil compared to NYMEX was $10.72 per barrel, which compared to $7.64 per
barrel in the second quarter of 2007 and $8.38 per barrel in the first quarter
of 2008. Whiting expects its oil price differential to remain at $10.00 to
$11.00 in the second half of 2008.
During the second quarter, the company-wide basis differential for natural
gas compared to NYMEX was $0.92 per Mcf, which compared to $0.60 per Mcf in
the second quarter of 2007 and $0.14 per Mcf in the first quarter of 2008.
Whiting expects its gas price differential to be in the range of $0.50 to
$1.00 in second half of 2008.
Second Quarter 2008 Drilling Summary
The table below summarizes Whiting's drilling activity and exploration and
development costs incurred for the three months and six months ended June 30,
2008:
Gross/Net Wells Completed
Expl. & Dev.
Total New% Success Cost
Producing Non-Producing DrillingRate (in millions)
Q20884 / 30.1 4 / 1.6 88 / 31.796% / 95% $222.4
6M08 131 / 55.8 9 / 2.1140 / 57.994% / 96% $410.3
Outlook for Third Quarter and Full-year 2008
The following table provides a summary of certain estimates for the third
quarter and full-year 2008 based on current forecasts. Whiting's full-year
2008 capital budget is $850 million (excluding acquisition costs).
Whiting has adjusted third quarter production guidance for planned
maintenance on the pipeline that transports crude oil from the Sanish and
Parshall fields. The maintenance is scheduled to take place from August 19
through August 23, 2008 and could affect as much as 40,000 barrels, or less
than 1%, of total net production during the third quarter. Whiting is looking
at different markets for its crude oil production from this area during that
period.
In addition, Whiting is making alternative marketing arrangements for its
Piceance Basin gas production to mitigate the impact of scheduled testing on a
section of the REX pipeline for most of September. As previously mentioned,
net production from the Company's Boies Ranch prospect averaged 6.1 MMcf of
gas per day in June 2008.
Guidance for the third quarter and full-year 2008 is as follows:
Guidance
Third Quarter Full-Year
2008 2008
Production (MMBOE) 4.30 - 4.40 16.50 - 16.70
Lease operating expense per BOE $13.70 - $14.00 $14.00 - $14.30
General and admin. expense per BOE $3.90 - $4.10 $4.20 - $4.40
Interest expense per BOE $4.05 - $4.25 $4.00 - $4.20
Depr., depletion and amort. per BOE $14.10 - $14.50 $14.00 - $14.40
Prod. taxes (% of production revenue) 6.6% - 6.9%6.6% - 6.9%
Oil Price Differentials to NYMEX per Bbl $10.00 - $11.00 $9.50 - $10.00
Gas Price Differentials to NYMEX per Mcf $0.50 - $1.00 $0.50 - $0.70
Oil Hedges and Fixed-Price Gas Contracts
Whiting Petroleum Corporation's outstanding hedges and fixed-price gas
contracts as of July 1, 2008 are summarized below:
As a
Contracted NYMEX Price Collar Percentage of
2008Volume RangeJune 2008
Hedges (Bbls per Month) (per Bbl)Oil Production
Q3 110,000$48.00 - $70.85 12%
Q3 120,000$60.00 - $75.60 13%
Q3 100,000$65.00 - $81.00 10%
Q4 110,000$48.00 - $70.20 12%
Q4 120,000$60.00 - $75.85 13%
Q4 100,000$65.00 - $81.20 10%
Natural Gas As a
Volumes in 2008 ContractPercentage of
Fixed Price MMBtu perPrice (1)June 2008
Contracts Month per MMBtu Gas Production
July 2008 - May 201125,000$4.94 1%
July 2008 - Sep. 201267,000$4.38 2%
(1) Annual 4% price escalation on fixed price contracts.
In conjunction with the Whiting USA Trust I, Whiting entered into certain
oil and natural gas hedges on the underlying properties. Whiting's retained
10% interest in the underlying properties combined with its ownership of
2,186,389 trust units results in third-party public holders of trust units
receiving 75.8%, and Whiting retaining 24.2%, of the future economic results
of the hedge contracts listed below.
Contracted VolumeNYMEX Price Collar Range
Oil Natural Gas
Bbls perMcf perOilGas
HedgesMonth Month (per Bbl) (per MMBtu)
2008 52,177 235,314 $82.00 - $132.81$7.00 - $17.38
2009 48,166 198,974 $76.00 - $137.43$6.50 - $17.11
2010 43,488 170,589 $76.00 - $134.98$6.50 - $15.06
2011 39,614 150,313 $74.00 - $140.15$6.50 - $14.62
2012 36,189 132,232 $74.00 - $141.72$6.50 - $14.27
Selected Operating and Financial Statistics
Three Months EndedSix Months Ended
June 30, June 30,
2008 2007 2008 2007
Selected operating statistics
Production
Oil and condensate, Mbbl 2,798 2,381 5,392 4,626
Natural gas, MMcf 7,344 8,056 14,234 15,785
Oil equivalents, MBOE 4,022 3,724 7,764 7,257
Average Prices
Oil, Bbl (excludes hedging) $113.28 $57.38$101.88 $53.48
Natural gas, Mcf (excludes
hedging) $10.02 $6.95 $8.99 $6.65
Per BOE Data
Sales price (including
hedging) $85.14 $51.74 $78.08 $48.56
Lease operating $14.29 $13.96 $14.58 $13.92
Production taxes $6.48 $3.24 $5.63 $2.99
Depreciation, depletion and
amortization $13.63 $13.25 $13.56 $12.94
General and administrative $5.72 $2.38 $4.46 $2.36
Selected Financial Data
(In thousands, except per
share data)
Total revenues and other
income $345,775 $192,904 $609,825 $352,826
Total costs and expenses$217,911 $151,305 $383,179 $294,708
Net income $80,449$26,471 $142,763$37,137
Net income per common share,
basic $1.90 $0.72 $3.38 $1.01
Net income per common share,
diluted $1.90 $0.72 $3.37 $1.01
Average shares outstanding,
basic42,320 36,808 42,296 36,789
Average shares outstanding,
diluted 42,446 36,905 42,416 36,936
Net cash provided by
operating activities $206,638$87,592 $329,091 $149,953
Net cash used in investing
activities$(398,163) $(117,890) $(568,664) $(242,729)
Net cash provided by
financing activities $210,000$30,000 $250,000$90,294
Conference Call
The Company's management will host a conference call with investors,
analysts and other interested parties on Thursday, July 31, 2008 at 11:00 a.m.
EDT (10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting's second quarter 2008
financial and operating results. Please call (888) 873-4896 (U.S./Canada) or
(617) 213-8850 (International) and enter the pass code 40529254 to be
connected to the call. Access to a live Internet broadcast will be available
at http://www.whiting.com by clicking on the link titled "Webcasts." Slides
for the conference call will be available on this website beginning at
11:00 a.m. (EDT) on July 31, 2008.
A telephonic replay will be available beginning approximately two hours
after the call on Thursday, July 31, 2008 and continuing through Thursday,
August 7, 2008. You may access this replay at (888) 286-8010 (U.S./Canada) or
(617) 801-6888 (International) and entering the pass code 34686270. You may
also access a web archive at http://www.whiting.com beginning approximately
one hour after the conference call.
About Whiting Petroleum Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an independent
oil and gas company that acquires, exploits, develops and explores for crude
oil, natural gas and natural gas liquids primarily in the Permian Basin, Rocky
Mountains, Mid-Continent, Gulf Coast and Michigan regions of the United
States. The Company trades publicly under the symbol WLL on the New York
Stock Exchange. For further information, please visit http://www.whiting.com.
Forward-Looking Statements
This news release contains statements that we believe to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than historical facts,
including, without limitation, statements regarding our future financial
position, business strategy, projected revenues, earnings, costs, capital
expenditures and debt levels, and plans and objectives of management for
future operations, are forward-looking statements. When used in this news
release, words such as we "expect," "intend," "plan," "estimate,"
"anticipate," "believe" or "should" or the negative thereof or variations
thereon or similar terminology are generally intended to identify
forward-looking statements. Such forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ materially
from those expressed in, or implied by, such statements.
These risks and uncertainties include, but are not limited to: declines in
oil or gas prices; our level of success in exploitation, exploration,
development and production activities; adverse weather conditions that may
negatively impact development or production activities; the timing of our
exploration and development expenditures, including our ability to obtain
drilling rigs and CO2; our ability to obtain external capital to finance
acquisitions; our ability to identify and complete acquisitions and to
successfully integrate acquired businesses, including the properties acquired
from Chicago Energy; unforeseen underperformance of or liabilities associated
with acquired properties, including the properties acquired from Chicago
Energy; our ability to successfully complete potential asset dispositions;
inaccuracies of our reserve estimates or our assumptions underlying them;
failure of our properties to yield oil or gas in commercially viable
quantities; uninsured or underinsured losses resulting from our oil and gas
operations; our inability to access oil and gas markets due to market
conditions or operational impediments; the impact and costs of compliance with
laws and regulations governing our oil and gas operations; risks related to
our level of indebtedness and periodic redeterminations of our borrowing base
under our credit agreement; our ability to replace our oil and gas reserves;
any loss of our senior management or technical personnel; competition in the
oil and gas industry in the regions in which we operate; risks arising out of
our hedging transactions; and other risks described under the caption "Risk
Factors" in our Form 10-K for the year ended December 31, 2007. We assume no
obligation, and disclaim any duty, to update the forward-looking statements in
this news release.
SELECTED FINANCIAL DATA
For further information and discussion on the selected financial data
below, please refer to Whiting Petroleum Corporation's Second Quarter
Form 10-Q for the three and six months ended June 30, 2008, to be filed with
the Securities and Exchange Commission.
WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
June 30, December 31,
2008 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $25,205$14,778
Accounts receivable trade, net 199,782110,437
Deferred income taxes 39,890 27,720
Prepaid expenses and other 33,152 9,232
Total current assets298,029162,167
PROPERTY AND EQUIPMENT:
Oil and gas properties, successful efforts
method:
Proved properties 3,874,820 3,313,777
Unproved properties 131,430 55,084
Other property and equipment51,456 37,778
Total property and equipment 4,057,706 3,406,639
Less accumulated depreciation, depletion
and amortization (715,426) (646,943)
Total property and equipment, net 3,342,280 2,759,696
DEBT ISSUANCE COSTS 12,881 15,016
OTHER LONG-TERM ASSETS52,006 15,132
TOTAL $3,705,196 $2,952,011
WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)
June 30, December 31,
2008 2007
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $50,366$19,280
Accrued capital expenditures 79,096 59,441
Accrued liabilities41,188 29,098
Accrued interest 10,633 11,240
Oil and gas sales payable 39,425 26,205
Accrued employee compensation and benefits 25,756 21,081
Production taxes payable 25,193 12,936
Current portion of deferred gain on sale 16,070 -
Current portion of tax sharing liability2,587 2,587
Current portion of derivative liability 139,268 72,796
Total current liabilities 429,582254,664
NON-CURRENT LIABILITIES:
Long-term debt 1,118,411868,248
Asset retirement obligations 41,067 35,883
Production Participation Plan liability51,889 34,042
Tax sharing liability 23,693 23,070
Deferred income taxes 317,889242,964
Long-term derivative liability 37,871 -
Deferred gain on sale 82,418 -
Other long-term liabilities 2,290 2,314
Total non-current liabilities1,675,528 1,206,521
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value;
75,000,000 shares authorized, 42,586,046
and 42,480,497 shares issued and
outstanding as of June 30, 2008 and
December 31, 2007, respectively 43 42
Additional paid-in capital970,387968,876
Accumulated other comprehensive loss (81,131) (46,116)
Retained earnings 710,787568,024
Total stockholders' equity 1,600,086 1,490,826
TOTAL$3,705,196 $2,952,011
WHITING PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
REVENUES AND OTHER INCOME:
Oil and gas sales$390,536 $192,646 $677,267 $352,359
Loss on oil hedging
activities (48,111) -(71,023)-
Amortization of deferred
gain on sale 2,957 - 2,957 -
Interest income and other 393258624 467
Total revenues and other
income345,775192,904609,825 352,826
COSTS AND EXPENSES:
Lease operating57,470 51,983113,176 101,037
Production taxes 26,057 12,079 43,74321,690
Depreciation, depletion and
amortization 54,811 49,335105,32293,906
Exploration and impairment 8,643 6,643 19,62715,820
General and administrative 23,007 8,876 34,62217,161
Change in Production
Participation Plan liability 11,690 2,058 17,847 4,150
Interest expense 15,671 20,754 31,21740,253
Mark-to-market derivative
(gain) loss 20,562 (423)17,625 691
Total costs and expenses 217,911151,305383,179 294,708
INCOME BEFORE INCOME TAXES 127,864 41,599226,64658,118
INCOME TAX EXPENSE:
Current (837) 1,515872 2,141
Deferred 48,252 13,613 83,01118,840
Total income tax expense47,415 15,128 83,88320,981
NET INCOME $80,449$26,471 $142,763 $37,137
NET INCOME PER COMMON SHARE,
BASIC$1.90 $0.72 $3.38 $1.01
NET INCOME PER COMMON SHARE,
DILUTED $1.90 $0.72 $3.37 $1.01
WEIGHTED AVERAGE SHARES
OUTSTANDING, BASIC 42,320 36,808 42,29636,789
WEIGHTED AVERAGE SHARES
OUTSTANDING, DILUTED42,446 36,905 42,41636,936
WHITING PETROLEUM CORPORATION
Reconciliation of Net Cash Provided by Operating Activities to Discretionary
Cash Flow
(In thousands)
Three Months Ended
June 30,
2008 2007
Net cash provided by operating activities $206,638$87,592
Exploration5,815 4,318
Changes in working capital 3,887 8,268
Discretionary cash flow (1) $216,340 $100,178
Six Months Ended
June 30,
2008 2007
Net cash provided by operating activities $329,091 $149,953
Exploration 14,227 11,178
Changes in working capital34,454 13,110
Discretionary cash flow (1) $377,772 $174,241
(1) Discretionary cash flow is computed as net income plus exploration and
impairment costs, depreciation, depletion and amortization, deferred income
taxes, non-cash interest costs, non-cash compensation plan charges, unrealized
derivative losses and other non-current items less the gain on sale of
properties and marketable securities. The non-GAAP measure of discretionary
cash flow is presented because management believes it provides useful
information to investors for analysis of the Company's ability to internally
fund acquisitions, exploration and development. Discretionary cash flow
should not be considered in isolation or as a substitute for net income,
income from operations, net cash provided by operating activities or other
income, cash flow or liquidity measures under GAAP and may not be comparable
to other similarly titled measures of other companies.
SOURCE Whiting Petroleum Corporation
