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Whiting (WLL) Q2 Earnings In Line, Free Cash Flow Jumps

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Whiting Petroleum (WLL - Free Report) reported second-quarter adjusted net income per share of 62 cents, in line with the Zacks Consensus Estimate and turning around from the year-ago adjusted loss of 72 cents. The outperformance stems from strong Williston Basin production and higher oil realizations.

Total operating revenues of $526.4 million were above the Zacks Consensus Estimate of $501 million and was 69% above the second-quarter 2017 sales of $311.5 million.

Importantly, Whiting Petroleum’s discretionary cash flow exceeded capital expenditure by $107.2 million for the quarter. Over the past nine months, the company have generated $268.8 million of operating cash flow over and above capital spending. As costs continue to come down amid stronger oil pricing, the company is expected to generate significant amount of free cash flow over the next few years.

Whiting Petroleum Corporation Price, Consensus and EPS Surprise

 

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

Production & Prices

Whiting Petroleum’s total oil and gas production increased 12% compared with last year’s corresponding period to 11.48 million oil-equivalent barrels (84% liquids). Results were also above the Zacks Consensus Estimate of 11.35 million oil-equivalent barrels. Roughly 82% of the company’s output came from the Williston Basin region.

The average realized crude oil price during the second quarter was $62.61 per barrel, representing an increase of 56% from the year-ago realization of $40.12, while the average realized natural gas liquids price was $15.26 per barrel, up 47% from the year-ago period. Meanwhile, Whiting Petroleum fetched $1.32 per thousand cubic feet (Mcf) for natural gas during the March quarter of 2018, down 21% year over year.

Balance Sheet & Capital Expenditure

As of Jun 30, 2018, the oil explorer had approximately $16.6 million in cash and cash equivalents. Whiting Petroleum carried long-term debt of $2.8 billion, representing a debt-to-capitalization ratio of 41.4%. In the reported quarter, the company spent $203.3 million on capital programs.

Guidance

Whiting Petroleum expects third-quarter production in the range of 11.7–12.2 MMBOE and yearly output in the range of 47–47.7 MMBOE (up from the previous forecast of 46.5–47.2 MMBOE. For 2018, the company expects a capital budget of $750 million.

Zacks Rank & Stock Picks

Whiting Petroleum currently retains a Zacks Rank #3 (Hold).

Meanwhile, one can look at better-ranked oil and gas producers like Murphy Oil Corporation (MUR - Free Report) , Penn Virginia Corporation (PVAC - Free Report) and Eclipse Resources Corporation (ECR - Free Report) . All the companies sport a Zacks Rank #1 (Strong Buy).

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

Murphy Oil explores and produces crude oil, natural gas and natural gas liquids worldwide. In the last 60 days, three earnings estimates moved north, while one moved south for the current year. The Zacks Consensus Estimate for earnings has risen 12% in the same period.

Penn Virginia is an oil and gas exploration and production company with operations primarily focused on the Eagle Ford shale in south Texas. In the last 60 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings has risen 18% in the same period.

Eclipse Resources is engaged in the exploration and production of oil and natural gas properties in the Appalachian Basin, including the Utica and Marcellus Shales. In the last 60 days, four earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings has risen 50% in the same period.

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