Specialist
Former Director at Whiting Petroleum Corp
Agenda
- Post-bankruptcy portfolio overview of Whiting Petroleum's (NYSE: WLL) key assets
- Williston Basin asset acquisition assessment and opportunities
- Financial strategy and cost restructuring opportunities
- Infrastructure and regulatory challenges facing oil producers in the Williston Basin and Whiting's approach
- Whiting’s production outlook and potential to meet 2021 targets
Questions
1.
What is your assessment of the current environment for upstream producers in the Bakken and Williston area? How has consolidation and the volatility in the energy markets changed the landscape over the past couple of years?
2.
What is your assessment of Whiting’s post-bankruptcy successes? Its capture structure has been reworked and potentially strengthened. How do you compare that, especially as you’re noting its actual acreage and inventory that it has left?
3.
You noted Whiting’s debt reduction and its goal to be debt free by the end of 2021. How confident are you in its ability to do that and maintain it?
4.
You mentioned Whiting’s being around 75% hedged. Considering that, as you mentioned, its hedge is now linked to oil in the mid-40s, how do you think about its hedging strategy to mitigate against potential commodity fluctuations, while also taking advantage of the higher prices currently? That number is conservative for Whiting, and if oil stays where it is, the company is creating a loss there.
5.
Do you think 75% hedged is a good level for Whiting to maintain? Do you think it should be more or less hedged?
6.
What will it take to regain the investment community’s trust within the oil markets and E&Ps, given the difficult energy environment over the past two years? As you said, there’s been a lot of focus on production, now the market is more demanding of returns to shareholders. What is the influx of capital stemming from carbon-neutral and cleaner energy solutions?
7.
What is the positioning of oil producers in the next few years within the energy landscape in the US, but also globally given the energy crisis?
8.
Whiting’s core assets have always been in the Bakken and Williston area. Are there any other areas that think Whiting has potential upsides on, especially as it’s getting into some of the company’s less core acreage?
9.
You noted the Colorado assets in the past as having a potential upside. Given that divestiture, do you think that ultimately was the right decision, to be focusing back on the Williston? Are there any other potential areas that you might consider as ripe for divestiture?
10.
Do you think the completion of Whiting’s asset acquisition in the Williston is a smart move for expanding on its core acreage, rather than further diversifying, as there has been a lot of basin diversification over the past year in the rest of the industry?
11.
As you noted the potential for Whiting to be gearing up for sale, do you think that it is an attractive acquisition target and who do you think would be a logical buyer for Whiting? Not only has there been oil on oil M&A but Travis also acquired Semarex and diversified from natural gas to oil. Are the options open and who might be that likely buyer, in your opinion?
12.
Whiting noted that there is opportunity for 60 new drilling locations from the acquisition, but it also highlighted the Sanish field, where it’s historically struggled. Perhaps it’s been more outdated acreage now because it wasn’t able to achieve those longer laterals, but it has highlighted that the assets or the acreage it has now acquired there will allow it to increase those laterals. Do you think it’s smart of the company to focus on the Sanish field, thinking about how much inventory is actually left there? What is Whiting’s ability to quickly expand those laterals and realise that within the Sanish field?
13.
Whiting also noted potentially the possibility for a three-mile lateral with this added acreage in the Sanish. Does that make sense to you, knowing the well economics there? It noted the need for a new permit for that. What are the regulatory challenges there?
14.
Outside of the Sanish, overall, within the Williston, Whiting noted a significant amount of undeveloped acres in its core Williston inventory. Do you think these have strong development potential, especially, as you noted it has drilled out most of its tier 1 and is now into tier 2? Noting your comments as well on the steadier state, given the lower decline of some of the tier 2 acreage, do you think that’s a long-term smart play for Whiting?
15.
A key focus recently is Whiting’s continuous well economic improvement, especially through its drilling optimisation, lateral motors and it also incorporated some back-fills again to focus on that lateral length. How much further can it increase those well economics and drilling efficiencies? Can it reduce these further and is there a limit on this?
16.
What is your outlook for Whiting’s production? The company noted a sequential improvement in production in oil in Q3 2021, so how do you think about the run rate?
17.
Do you think Whiting can continue to improve upon the production? Is that possible without introducing more rigs?
18.
Whiting noted its focus right now on its free cash flow generation and anticipated free cash flow as being dependent on USD 60 per barrel. What is the current commodity price environment like for the near term and any potential risk to that?
19.
Is there anything else that you would like to add or highlight that we haven’t touched on?
