Whiting Petroleum Corporation (NYSE:WLL) continues impressing investors with its strong operational performance. The stability in oil prices adds to the company’s financial performance and trader’s sentiments.
Whiting Petroleum shares rose 25% today following stronger than expected results for the fourth quarter and improving market dynamics for oil prices. WLL stock currently trades around $28 and it has the 52-week trading range of $15.88 – $47.00.
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Its business model is directly correlated to oil prices. Energy markets have been stabilizing strongly since the start of this year. At present, WTI crude trades around $63.03/bbl, while Brent crude stands around $66.52/bbl.
The majority of U.S. based exploration and production companies have substantially reduced their breakeven level over the last two years. Whiting Petroleum has also been aggressively working on cost-cutting strategies along with investments in higher margin areas to decrease the breakeven point.
The company’s strategies are working. In the final quarter of 2017, the company’s total production of 11.8 million barrels of oil equivalent (MMBOE) increased 12% from the past year period, supported by investments in The Bakken/Three Forks play and the DJ Basin.
Production improved 5% sequentially from the Bakken/Three Forks play- where Whiting drilled 27 wells in the fourth quarter. Production grew 75% sequentially from the DJ Basin in the fourth quarter. Consequently, its revenue rose 38% to $474 million from the same period last year.
Whiting Petroleum has also reduced its general & administrative expenses to $2.46 per BOE, compared to $2.61 per BOE in the past year period.
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The disciplined investment strategies allowed the company to fund its capital requirements from internal cash generation. Whiting Petroleum’s operating cash flows exceeded the capital requirements by $116 million.
Whiting looks to invest $750 million in growth opportunities in 2018. Moreover, the company believes higher oil prices will allow it to generate strong cash flows to support the capital investments. Whiting Petroleum expects to generate average annual production in the range of 128,400 BOE/d in 2018, representing a growth of 9% over 2017.
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