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Whiting (WLL) Incurs Q1 Loss on Weak Price Realizations

Whiting Petroleum Corporation WLL reported first-quarter 2019 adjusted net loss per share of 16 cents versus the Zacks Consensus Estimate of earnings of 20 cents. Lower-than-expected oil, natural gas liquids (NGLs) and gas prices led to the underperformance. Precisely, the company’s realized NGLs price was $6.62 a barrel, significantly lagging the Zacks Consensus Estimate of 18.78. Realized prices of oil and gas also missed the consensus estimate by 1.6% and 28%, respectively.

Further, its bottom line compared unfavorably with the year-ago EPS of 92 cents a share owing to weaker year-over-year commodity price realizations.

Total operating revenues came in at $389.5 million, missing the Zacks Consensus Estimate of $420 million. The top line also recorded a decline of 24.4% from the year-ago level of $515.1 million.

Whiting Petroleum Corporation Price, Consensus and EPS Surprise

Whiting Petroleum Corporation Price, Consensus and EPS Surprise | Whiting Petroleum Corporation Quote

On a further discouraging note, the company’s discretionary cash flow of $199.5 million was lower than the capital spending of $219 million, translating into a negative FCF of $19.5 million. Notably, total operating expenses of the company increased 4.4% from the prior-year level to a total of $435.5 million in the quarter under review.

Production & Prices

Whiting’s total oil and gas production recorded a nominal y/y increase of 1.2% to 11.58 million oil-equivalent barrels (comprising 82% liquids).

The average realized crude oil price during the first quarter was $47.71 per barrel, reflecting a decrease of 19% from the year-ago realization of $58.61. Moreover, the average realized natural gas liquids price was $6.62 per barrel, plummeting 72% from the year-ago period. Natural gas prices also declined 18% y/y to $1.36 per thousand cubic feet. 

Balance Sheet & Capital Expenditure

As of Mar 31, the oil explorer had approximately $1.7 million in cash and cash equivalents. Whiting had a long-term debt of $2,839.4 million, representing a debt-to-capitalization ratio of 40.3%. In the reported quarter, the company spent $219 million on capital program.

Guidance Intact

Whiting keeps its 2019 production and capital expenditure guidance unchanged. The firm expects 2019 production in the range of 46.7-47.7 million barrels of oil equivalent. It expects total oil output to grow 15% on a year-over-year basis. The company forecasts 2019 capital spending in the band of $800-$840 million, with 86% of the total outlay directed toward drilling and completion activities.

Zacks Rank & Other Key Picks

Whiting currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the same industry can also consider other top-ranked players such as:

Devon Energy Corporation DVN: Devon’s 2019 earnings are expected to grow 63.57% in 2019 on a year-over-year basis.

Murphy Oil Corporation MUR: Murphy surpassed earnings estimates in three out of the trailing four quarters, with average positive surprise of 17.33%. The company’s 2019 earnings are expected to grow 12.70% this year.

Bonanza Creek Energy, Inc. BCEI: The company delivered average positive earnings surprise of 14.53% in the trailing four quarters. Bonanza Creek’s 2019 earnings are expected to grow 23.09% y/y in 2019.

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