Shares of Whiting Petroleum Corp (WLL) plunged 31.6% last month, according to data provided by S&P Global Market Intelligence. While the Bakken Shale-focused driller reported strong third-quarter results and won upgrades from several analysts, that wasn't enough to overcome the pressure from the sell-off in crude prices.
Oil took a nasty tumble in October, falling more than 10%, which was its the biggest monthly percentage decline since July 2016. Fueling crude's sell-off was a combination of rising production and fears that energy demand could slow down due to a weakening global economy. Those factors more than offset the potential for oil market supply disruptions as new sanctions take effect on Iran in November. Given that oil provides Whiting with the bulk of its cash flow, last month's slide could impact the company's financial results going forward, which is why it weighed so heavily on the stock.
The sell-off in the oil market overshadowed what would have been a good month for Whiting Petroleum. Several analysts upgraded the stock due to the improving operating environment in the Bakken and the company's strengthening balance sheet. Wells Fargo, for example, noted that the company's improving prospects position it to deliver top-tier debt-adjusted cash flow per share growth.
That upside was on full display when Whiting Petroleum reported its third-quarter results at the end of the month. The oil company turned in an adjusted profit of $0.92 per share, which beat analysts' expectations by an impressive $0.31 per share. Powering Whiting's strong quarter was a 13% surge in oil production, which along with higher oil prices enabled the company to generate $264 million in cash flow, including $56 million in free cash after funding its drilling program.
Whiting Petroleum had been on quite a run before selling off last month, with its shares more than doubling from its low point in February to its peak at the end of September. However, the stock has now lost nearly 40% of its value since that pinnacle due to the recent slump in oil prices. As a result, Whiting has the potential to bounce back sharply if crude prices rally, which makes it an intriguing rebound candidate.