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Why Whiting Petroleum Corp Stock Is Soaring Today

By Matthew DiLallo - Feb 22, 2018 at 12:10PM

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The shale driller beat expectations and provided an upbeat outlook for this year.

What happened

Shares of Whiting Petroleum Corp (WLL) are jumping today, rising more than 25% as of 10:45 a.m. EST, after the driller reported stronger-than-expected fourth-quarter results and a bullish outlook for 2018.

So what

While the Bakken Shale-focused Whiting Petroleum reported an adjusted loss of $15.7 million, or $0.17 per share, that was a vast improvement from its year-ago adjusted loss of $82.6 million, or $1.12 per share. Furthermore, it was $0.13-per-share better than analysts expected. Several factors contributed to the improved results, including delivering production at the high end of its guidance range, better oil pricing, and keeping costs to the low end of guidance.

An oil pump with the sun shining brightly behind it

Image source: Getty Images.

While production rose 12% over the past quarter, full-year output declined due to asset sales. However, Whiting expects that to reverse this year by investing $750 million, which will give it the money to complete enough wells to produce an average of 128,400 barrels of oil equivalent per day. That represents 9% growth over 2017's average rate, fueled by a 14% increase from the company's Bakken assets. One thing that's worth noting about this plan is that while Whiting expects to complete 22 previously drilled wells in its Redtail area in the DJ Basin, it doesn't expect to drill any wells there this year. Additionally, the company noted that it can fully fund its 2018 capital plan with cash flow and is on pace to generate free cash flow at current oil prices.

Now what

Whiting is working toward a goal "of becoming a top-tier E&P company as measured by capital efficient growth and free cash flow generation," according to CEO Bradley Holly. While its 2018 plan puts it on that pace, the company remains well behind rivals, which are growing faster and producing a gusher of free cash flow that they're beginning to return to shareholders. That said, after a couple of rough years, Whiting is finally heading in the right direction.

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