Upstream energy firm, Whiting Petroleum Corporation (WLL), provided an update on its available proved reserves and financial position following the Kodiak Oil & Gas Corp. acquisition.
The company announced that its proved reserves, effective Dec 31, 2014, are estimated at 780 million barrels of oil equivalent (“MMBOE”). This represents 29% yearly growth over the combined reserves of Whiting and Kodiak of 606 MMBOE. The 780 MMBOE has been classified into 83% oil and 90% oil and natural gas liquids.
Moreover, on Dec 19, Whiting’s credit availability was raised to $4.5 billion by its banking syndicate, in keeping with its reserves growth and current market scenario. The company expects to be left with around $3.1 billion from this credit facility by the year end.
The company intends to maintain its strong liquidity position in 2015 as well and will plan its capital budget accordingly. Moreover, Whiting plans to monetize some assets to generate about $1 billion in funds and reduce leverage.
Whiting also announced that considering the current volatile pricing scenario, it will announce 2015 guidance during its 4Q14 results in Feb 2015.
On Dec 8, Whiting announced that it has completed the acquisition of Kodiak Oil & Gas Corp. to become the largest Bakken/Three Forks producer. Whiting had planned the Kodiak buyout to expand its foothold in the Bakken/Three Forks area and grow production. However, considering the current weakness in oil price, the deal proved to be less fruitful than anticipated.
Currently, Whiting Petroleum carries a Zacks Rank #4 (Sell).
Despite the current weakness in the energy sector one may consider better-ranked players like Seadrill Partners LLC (SDLP), Spectra Energy Partners, LP (SEP) and SandRidge Mississippian Trust I (SDT). All these stocks sport a Zacks Rank #1 (Strong Buy).
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