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Whiting Petroleum: Debt Reduction Efforts Continue


Whiting has been significantly reducing its debt via asset sales, convertible notes and debt repurchases.

Whiting is now down to around $4.5 billion in debt principal, down from $5.65 billion at the end of Q1 2016.

Combined with moderating declines, Whiting is in the position of reaching breakeven in 2017 at roughly $50 oil.

Debt reduction has come at a cost though, with Whiting selling off higher cost assets such as the North Ward Estes properties as well as adding significant amounts of shares.

The dilution may keep Whiting at near $8 without a major movement in oil prices.

Whiting Petroleum (NYSE:WLL) has been attempting to reduce its debt to a level that is more in line with the current view of future oil prices. Whiting has reduced its debt recently through a combination of asset sales, convertible notes and debt repurchases. The North Ward Estes sale raised $300 million, while conversion of the convertible notes and debt repurchases have reduced Whiting's debt by another $849 million. This puts Whiting at around $4.5 billion in debt, with the potential to reduce its debt by another $721 million if the rest of its convertible notes from its late June/early July note exchange are converted.

Source: Whiting Petroleum

Another Look At The North Ward Estes Sale

Additional available information about the North Ward Estes sale allows us to take a look at the impact of the sale on Whiting's metrics.

The North Ward Estes properties produced approximately 1.59 million BOE during the first half of 2016. This compares to approximately 3.4 million BOE during 2015 as Whiting reduced capital expenditures at that field (from $95 million in 2015 to $28 million during the first half of 2016). The North Ward Estes properties appear to have a differential of around $5 per BOE and...