Whiting Petroleum Reports Third Quarter 2021 Financial and Operating Results

By: Whiting Petroleum Corporation via Business Wire

November 03, 2021 at 16:05 PM EDT

Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced third quarter 2021 results.

Third Quarter 2021 Highlights

Revenue was $401 million for the quarter ending September 30, 2021
Net income (GAAP) was $198 million or $5.00 per diluted share
Adjusted net income (non-GAAP) was $142 million or $3.57 per diluted share
Adjusted EBITDAX (non-GAAP) was $201 million
September 30, 2021 net debt was $59 million (non-GAAP)

Lynn A. Peterson, President and CEO commented, “The team continues to execute on our business plan as demonstrated by the substantial cash provided by operating activities of $190 million during the quarter and $526 million for the nine-month period. The Company generated adjusted free cash flow during the quarter of $128 million and $347 million for the nine months ended September 30, 2021. Commodity prices have continued to strengthen during the year and under current prices, the Company expects to continue to generate substantial free cash flow during the fourth quarter and end the year with no debt and positive cash on our balance sheet.”

Third Quarter 2021 Results

Revenue for the third quarter of 2021 increased $49 million to $401 million when compared to the second quarter of 2021, primarily due to increased commodity prices between periods.

Net income for the third quarter of 2021 was $198 million, or $5.00 per share, as compared to a net loss of $61 million, or $1.57 per share, for the second quarter of 2021. Adjusted net income (non-GAAP) for the third quarter of 2021 was $142 million, or $3.57 per diluted share, as compared to $118 million, or $3.01 per diluted share, for the second quarter of 2021. The primary difference between net income (loss) and adjusted net income for both periods is non-cash expense related to the change in the value of the Company’s hedging portfolio. The third quarter was also affected by the gain on sale of properties related to the previously announced divestiture.

The Company’s adjusted EBITDAX (non-GAAP) for the third quarter of 2021 was $201 million compared to $176 million for the second quarter of 2021. This resulted in net cash provided by operating activities of $190 million and adjusted free cash flow (non-GAAP) of $128 million. Adjusted EBITDAX (non-GAAP) for the nine months ended September 30, 2021 was $548 million. Net cash provided by operating activities was $526 million and adjusted free cash flow (non-GAAP) was $347 million for the nine months ended September 30, 2021.

Adjusted net income, adjusted net income per share, adjusted EBITDAX and adjusted free cash flow are non-GAAP financial measures. Please refer to the end of this release for disclosures and reconciliations regarding these measures.

Production for the third quarter averaged 92.1 thousand barrels of oil equivalent per day (MBOE/d) which was consistent with the previous quarter of 92.6 MBOE/d. Oil production averaged 51.8 thousand barrels of oil per day (MBO/d) compared to 53.4 MBO/d in the second quarter 2021.

Capital expenditures in the third quarter of 2021 were $67 million compared to the second quarter 2021 spend of $58 million. During the quarter, the Company drilled 10 gross/5.6 net operated wells and turned in line 17 gross/9.1 net operated wells.

Lease operating expense (LOE) for the third quarter of 2021 was $57 million compared to $64 million in the second quarter of 2021. The decrease was primarily due to less operated expense workovers and ongoing cost reduction measures. General and administrative expenses in the third quarter of 2021 of $12 million was consistent with the second quarter of 2021. Both quarters included approximately $3 million of non-cash stock compensation costs.

Liquidity

As of September 30, 2021, the Company had a borrowing base of $750 million, borrowings of $72 million and unrestricted cash of $13 million, resulting in total liquidity of $689 million, net of outstanding letters of credit. Whiting expects to continue to fund its operations fully within operating cash flow. Based on the above guidance, the Company forecasts to be in a positive net cash position with no outstanding balance on its credit facility by the end of the 2021.

Conference Call

Whiting will host a conference call on Thursday, November 4, 2021 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the third quarter 2021 results. The call will be conducted by President and Chief Executive Officer Lynn A. Peterson, Executive Vice President Finance and Chief Financial Officer James P. Henderson, Executive Vice President Operations and Chief Operating Officer Charles J. Rimer and Investor Relations Manager Brandon Day. A question and answer session will immediately follow the discussion of the results for the quarter.

To participate in this call please dial:

Domestic Dial-in Number: (877) 328-5506

International Dial-in Number: (412) 317-5422

Webcast URL: https://dpregister.com/sreg/10160438/ed94216c08

Replay Information:

Conference ID #: 10160438

Replay Dial-In (Toll Free): (877) 344-7529 (U.S.), (855) 669-9658 (Canada)

Replay Dial-In (International): (412) 317-0088

Expiration Date: November 11, 2021

Commodity Price Hedging

The Company uses commodity hedges in order to reduce the effects of commodity price volatility and to satisfy the requirements of its credit facility. The following table summarizes Whiting’s hedging positions as of October 31, 2021:


					Weighted Average
Settlement Period	Index	Derivative Instrument	Total Volumes	Units	Swap Price	Floor	Ceiling
Crude Oil
2021⁽¹⁾	NYMEX WTI	Fixed Price Swaps	2,162,000	Bbl	$44.90	-	-
2021⁽¹⁾	NYMEX WTI	Two-way Collars	1,150,000	Bbl	-	$42.48	$51.80
2022	NYMEX WTI	Fixed Price Swaps	2,275,000	Bbl	$69.29	-	-
2022	NYMEX WTI	Two-way Collars	11,204,000	Bbl	-	$47.07	$57.59
Q1-Q3 2023	NYMEX WTI	Two-way Collars	3,443,500	Bbl	-	$46.75	$58.87

Crude Oil Differentials
2021⁽¹⁾	UHC Clearbrook to NYMEX	Fixed Price Swaps	30,500	Bbl	-$1.95	-	-

Natural Gas
2021⁽¹⁾	NYMEX Henry Hub	Fixed Price Swaps	5,290,000	MMBtu	$3.16	-	-
2021⁽¹⁾	NYMEX Henry Hub	Two-way Collars	2,760,000	MMBtu	-	$2.60	$2.79
2022	NYMEX Henry Hub	Fixed Price Swaps	8,009,000	MMBtu	$3.24	-	-
2022	NYMEX Henry Hub	Two-way Collars	17,304,000	MMBtu	-	$2.70	$3.32
Q1-Q3 2023	NYMEX Henry Hub	Two-way Collars	6,999,000	MMBtu	-	$2.42	$2.94

Natural Gas Basis
2021⁽¹⁾	NNG Ventura to NYMEX	Fixed Price Swaps	2,760,000	MMBtu	-$0.07	-	-
Q1-Q2 2022	NNG Ventura to NYMEX	Fixed Price Swaps	6,230,000	MMBtu	$0.51	-	-
Q1-Q2 2023	NNG Ventura to NYMEX	Fixed Price Swaps	4,740,000	MMBtu	$0.20	-	-

NGL - Propane
2021⁽¹⁾	Mont Belvieu	Fixed Price Swaps	9,660,000	Gallons	$0.78	-	-
2021⁽¹⁾	Conway	Fixed Price Swaps	7,728,000	Gallons	$1.31	-	-
2022	Mont Belvieu	Fixed Price Swaps	19,110,000	Gallons	$1.08	-	-
2022	Conway	Fixed Price Swaps	19,110,000	Gallons	$1.17	-	-

⁽¹⁾ Includes settlement periods of October through December 2021.

Selected Operating and Financial Statistics

References to “Successor” refer to Whiting and its financial position and results of operations after its emergence from reorganization under chapter 11 of the Bankruptcy Code. References to “Predecessor” refer to Whiting and its financial position and results of operations on or before the emergence date (September 1, 2020).


	Successor
	Three Months Ended
	September 30,			June 30,
	2021			2021
Selected operating statistics:
Production
Oil (MBbl)		4,763			4,860
NGLs (MBbl)		1,919			1,793
Natural gas (MMcf)		10,745			10,666
Total production (MBOE)		8,472			8,431
Average prices
Oil (per Bbl):
Price received	$	66.54		$	63.46
Effect of crude oil hedging ⁽¹⁾		(16.57	)		(13.64	)
Realized price	$	49.97		$	49.82
Weighted average NYMEX price (per Bbl) ⁽²⁾	$	70.55		$	66.03
NGLs (per Bbl):
Price received	$	26.81		$	15.76
Effect of NGL hedging ⁽³⁾		(1.93	)		(0.47	)
Realized price	$	24.88		$	15.29
Natural gas (per Mcf):
Price received	$	2.42		$	1.25
Effect of natural gas hedging ⁽⁴⁾		(0.82	)		(0.04	)
Realized price	$	1.60		$	1.21
Weighted average NYMEX price (per MMBtu) ⁽²⁾	$	3.95		$	2.74
Selected operating metrics:
Sales price, net of hedging ($ per BOE)	$	35.75		$	33.50
Lease operating ($ per BOE)		6.68			7.61
Transportation, gathering, compression and other ($ per BOE)		1.04			0.88
Depreciation, depletion and amortization ($ per BOE)		6.13			6.12
General and administrative ($ per BOE)		1.41			1.42
Production and ad valorem taxes (% of sales revenue)		7	%		7	%

⁽¹⁾		Whiting paid $79 million and $66 million in pre-tax cash settlements on crude oil hedges during the three months ended September 30, 2021 and June 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.
⁽²⁾		Average NYMEX prices weighted for monthly production volumes.
⁽³⁾		Whiting paid $4 million and $1 million in pre-tax cash settlements on NGL hedges during the three months ended September 30, 2021 and June 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.
⁽⁴⁾		Whiting paid $9 million and $0.4 million in pre-tax cash settlements on natural gas hedges during the three months ended September 30, 2021 and June 30, 2021, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.


	Successor						Predecessor			Non-GAAP
	Nine Months Ended September 30, 2021			One Month Ended September 30, 2020			Eight Months Ended August 31, 2020			Combined Nine Months Ended September 30, 2020
Selected operating statistics:
Production
Oil (MBbl)		14,445			1,746			15,273			17,020
NGLs (MBbl)		5,272			559			4,522			5,081
Natural gas (MMcf)		31,661			3,631			29,667			33,299
Total production (MBOE)		24,993			2,910			24,740			27,650
Average prices
Oil (per Bbl):
Price received	$	61.06		$	34.58		$	28.86		$	29.45
Effect of crude oil hedging ⁽¹⁾		(12.78	)		0.28			3.00			2.72
Realized price	$	48.28		$	34.86		$	31.86		$	32.17
Weighted average NYMEX price (per Bbl) ⁽²⁾	$	64.78		$	39.63		$	38.23		$	38.37
NGLs (per Bbl):
Price received	$	20.23		$	3.19		$	4.45		$	4.31
Effect of NGL hedging ⁽³⁾		(0.86	)		-			-			-
Realized price	$	19.37		$	3.19		$	4.45		$	4.31
Natural gas (per Mcf):
Price received	$	1.90		$	(0.30	)	$	(0.06	)	$	(0.09	)
Effect of natural gas hedging ⁽⁴⁾		(0.28	)		0.15			(0.01	)		0.01
Realized price	$	1.62		$	(0.15	)	$	(0.07	)	$	(0.08	)
Weighted average NYMEX price (per MMBtu) ⁽²⁾	$	3.09		$	2.24		$	1.76		$	1.81
Selected operating metrics:
Sales price, net of hedging ($ per BOE)	$	34.04		$	21.34		$	20.39		$	20.49
Lease operating ($ per BOE)		7.21			6.37			6.40			6.39
Transportation, gathering, compression and other ($ per BOE)		0.93			0.68			0.90			0.88
Depreciation, depletion and amortization ($ per BOE)		6.29			6.91			13.69			12.98
General and administrative ($ per BOE)		1.37			3.55			3.71			3.69
Production and ad valorem taxes (% of sales revenue)		7	%		10	%		9	%		9	%

⁽¹⁾		Whiting paid $185 million and received $46 million in pre-tax cash settlements on crude oil hedges during the nine months ended September 30, 2021 and September 30, 2020, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.
⁽²⁾		Average NYMEX prices weighted for monthly production volumes.
⁽³⁾		Whiting paid $5 million in pre-tax cash settlements on NGL hedges during the nine months ended September 30, 2021. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.
⁽⁴⁾		Whiting paid $9 million and received $0.3 million in pre-tax cash settlements on natural gas hedges during the nine months ended September 30, 2021 and September 30, 2020, respectively. Refer to “Commodity Price Hedging” above for a summary of Whiting’s outstanding hedges.

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting’s Quarterly Report on Form 10‑Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission.


	Successor
	Three Months Ended
	September 30,		June 30,
	2021		2021
Selected financial data:
(In thousands, except per share data)
Total operating revenues	$	401,037	$	351,646
Total operating expenses		199,304		409,431
Total other expense, net		3,571		3,704
Net income (loss)		198,162		(61,489	)
Per basic share		5.07		(1.57	)
Per diluted share		5.00		(1.57	)
Adjusted net income⁽¹⁾		141,553		117,501
Per basic share		3.62		3.01
Per diluted share		3.57		3.01
Adjusted EBITDAX ⁽¹⁾		201,102		176,351
Net cash provided by operating activities		189,890		183,246
Adjusted free cash flow ⁽¹⁾		127,742		111,295


	Successor				Predecessor			Non-GAAP
	Nine Months Ended September 30, 2021		One Month Ended September 30, 2020		Eight Months Ended August 31, 2020			Combined Nine Months Ended September 30, 2020
Selected financial data:
(In thousands, except per share data)
Total operating revenues	$	1,060,074	$	61,084	$	459,004		$	520,088
Total operating expenses		914,489		30,877		4,651,298			4,682,175
Total other (income) expense, net		9,858		2,122		(170,459	)		(168,337	)
Net income (loss)		135,727		40,270		(3,965,461	)		(3,925,191	)
Per basic share ⁽²⁾		3.48		1.06		(43.37	)		(103.16	)
Per diluted share ⁽²⁾		3.44		1.06		(43.37	)		(103.16	)
Adjusted net income (loss)⁽¹⁾		366,948		8,250		(209,656	)		(201,406	)
Per basic share ⁽²⁾		9.42		0.22		(2.29	)		(5.29	)
Per diluted share ⁽²⁾		9.29		0.22		(2.29	)		(5.29	)
Adjusted EBITDAX ⁽¹⁾		547,669		34,689		227,580			262,269
Net cash provided by operating activities		526,329		11,640		112,613			124,253
Adjusted free cash flow ⁽¹⁾		347,281		13,155		(132,564	)		(119,409	)

⁽¹⁾		Reconciliations of net income (loss) to adjusted net income (loss) and adjusted EBITDAX and net cash provided by operating activities to adjusted free cash flow are included later in this news release.
⁽²⁾		For the combined nine months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share and per share data)

	Successor
	September 30,			December 31,
	2021			2020
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	12,909		$	28,367
Accounts receivable trade, net		217,698			142,830
Prepaid expenses and other		14,325			19,224
Total current assets		244,932			190,421
Property and equipment:
Oil and gas properties, successful efforts method		2,166,379			1,812,601
Other property and equipment		45,671			74,064
Total property and equipment		2,212,050			1,886,665
Less accumulated depreciation, depletion and amortization		(203,628	)		(73,869	)
Total property and equipment, net		2,008,422			1,812,796
Other long-term assets		37,883			40,723
TOTAL ASSETS	$	2,291,237		$	2,043,940
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable trade	$	57,518		$	23,697
Revenues and royalties payable		193,474			151,196
Accrued capital expenditures		38,255			20,155
Accrued liabilities and other		35,572			42,007
Accrued lease operating expenses		22,730			23,457
Taxes payable		16,744			11,997
Derivative liabilities		299,602			49,485
Total current liabilities		663,895			321,994
Long-term debt		72,000			360,000
Asset retirement obligations		85,120			91,864
Operating lease obligations		15,550			17,415
Long-term derivative liabilities		83,355			9,750
Other long-term liabilities		2,159			14,113
Total liabilities		922,079			815,136
Commitments and contingencies
Equity:
Successor common stock, $0.001 par value, 500,000,000 shares authorized; 39,127,389 issued and outstanding as of September 30, 2021 and 38,051,125 issued and outstanding as of December 31, 2020		39			38
Additional paid-in capital		1,194,319			1,189,693
Accumulated earnings		174,800			39,073
Total equity		1,369,158			1,228,804
TOTAL LIABILITIES AND EQUITY	$	2,291,237		$	2,043,940

WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data)
	Successor
	Three Months Ended
	September 30,			June 30,
	2021			2021
OPERATING REVENUES
Oil, NGL and natural gas sales	$	394,333		$	349,983
Purchased gas sales		6,704			1,663
Total operating revenues		401,037			351,646
OPERATING EXPENSES
Lease operating expenses		56,562			64,182
Transportation, gathering, compression and other		8,835			7,443
Purchased gas expense		5,496			1,178
Production and ad valorem taxes		28,712			25,669
Depreciation, depletion and amortization		51,927			51,618
Exploration and impairment		3,446			2,047
General and administrative		11,961			11,995
Derivative loss, net		122,559			255,409
Gain on sale of properties		(90,194	)		(10,110	)
Total operating expenses		199,304			409,431
INCOME (LOSS) FROM OPERATIONS		201,733			(57,785	)
OTHER INCOME (EXPENSE)
Interest expense		(3,871	)		(3,981	)
Other income		300			277
Total other expense		(3,571	)		(3,704	)
NET INCOME (LOSS)	$	198,162		$	(61,489	)
INCOME (LOSS) PER COMMON SHARE
Basic	$	5.07		$	(1.57	)
Diluted	$	5.00		$	(1.57	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		39,121			39,067
Diluted		39,622			39,067

WHITING PETROLEUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data)
	Successor						Predecessor			Non-GAAP
	Nine Months Ended September 30, 2021			One Month Ended September 30, 2020			Eight Months Ended August 31, 2020			Combined Nine Months Ended September 30, 2020
OPERATING REVENUES
Oil, NGL and natural gas sales	$	1,048,995		$	61,084		$	459,004		$	520,088
Purchased gas sales		11,079			-			-			-
Total operating revenues		1,060,074			61,084			459,004			520,088
OPERATING EXPENSES
Lease operating expenses		180,083			18,526			158,228			176,754
Transportation, gathering, compression and other		23,306			1,980			22,266			24,246
Purchased gas expense		8,576			-			-			-
Production and ad valorem taxes		78,531			5,908			41,204			47,112
Depreciation, depletion and amortization		157,274			20,110			338,757			358,867
Exploration and impairment		8,115			4,207			4,184,830			4,189,037
General and administrative		34,247			10,345			91,816			102,161
Derivative (gain) loss, net		524,661			(30,594	)		(181,614	)		(212,208	)
(Gain) loss on sale of properties		(100,304	)		395			927			1,322
Amortization of deferred gain on sale		-			-			(5,116	)		(5,116	)
Total operating expenses		914,489			30,877			4,651,298			4,682,175
INCOME (LOSS) FROM OPERATIONS		145,585			30,207			(4,192,294	)		(4,162,087	)
OTHER INCOME (EXPENSE)
Interest expense		(12,955	)		(2,128	)		(73,054	)		(75,182	)
Gain on extinguishment of debt		-			-			25,883			25,883
Interest income and other		3,097			6			211			217
Reorganization items, net		-			-			217,419			217,419
Total other income (expense)		(9,858	)		(2,122	)		170,459			168,337
INCOME (LOSS) BEFORE INCOME TAXES		135,727			28,085			(4,021,835	)		(3,993,750	)
INCOME TAX EXPENSE (BENEFIT)
Current		-			2,316			2,718			5,034
Deferred		-			(14,501	)		(59,092	)		(73,593	)
Total income tax benefit		-			(12,185	)		(56,374	)		(68,559	)
NET INCOME (LOSS)	$	135,727		$	40,270		$	(3,965,461	)	$	(3,925,191	)
INCOME (LOSS) PER COMMON SHARE
Basic ⁽¹⁾	$	3.48		$	1.06		$	(43.37	)	$	(103.16	)
Diluted ⁽¹⁾	$	3.44		$	1.06		$	(43.37	)	$	(103.16	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic ⁽¹⁾		38,963			38,051			91,423			38,051
Diluted ⁽¹⁾		39,479			38,051			91,423			38,051

⁽¹⁾For the combined nine months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.

Non-GAAP Financial Measures

WHITING PETROLEUM CORPORATION Reconciliation of Net Income (Loss) to Adjusted Net Income (in thousands, except per share data)

	Successor
	Three Months Ended
	September 30,			June 30,
	2021			2021
Net income (loss)	$	198,162		$	(61,489	)
Adjustments:
Gain on sale of properties		(90,194	)		(10,110	)
Impairment expense		2,439			1,250
Total measure of derivative loss reported under U.S. GAAP		122,559			255,409
Total net cash settlements paid on commodity derivatives during the period		(91,413	)		(67,559	)
Adjusted net income ⁽¹⁾	$	141,553		$	117,501
Adjusted net income per share, basic⁽¹⁾	$	3.62		$	3.01
Adjusted net income per share, diluted⁽¹⁾	$	3.57		$	3.01

⁽¹⁾

Adjusted net income and adjusted net income per share are non-GAAP measures. Management believes they provide useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that adjusted net income is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income and adjusted net income per share should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

WHITING PETROLEUM CORPORATION Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (in thousands, except per share data)
	Successor						Predecessor			Non-GAAP
	Nine Months Ended September 30, 2021			One Month Ended September 30, 2020			Eight Months Ended August 31, 2020			Combined Nine Months Ended September 30, 2020
Net income (loss)	$	135,727		$	40,270		$	(3,965,461	)	$	(3,925,191	)
Adjustments:
Amortization of deferred gain on sale		-			-			(5,116	)		(5,116	)
(Gain) loss on sale of properties		(100,304	)		395			927			1,322
Impairment expense		5,130			-			4,161,885			4,161,885
Gain on extinguishment of debt		-			-			(25,883	)		(25,883	)
Total measure of derivative (gain) loss reported under U.S. GAAP		524,661			(30,594	)		(181,614	)		(212,208	)
Total net cash settlements received (paid) on commodity derivatives during the period		(198,266	)		1,031			45,483			46,514
Reorganization items, net		-			-			(217,419	)		(217,419	)
Restructuring and other one-time costs ⁽¹⁾		-			9,333			32,888			42,221
Tax impact of basis difference for Whiting Canadian Holding Company ULC		-			(12,185	)		(55,346	)		(67,531	)
Adjusted net income (loss) ⁽²⁾	$	366,948		$	8,250		$	(209,656	)	$	(201,406	)
Adjusted net income (loss) per share, basic ⁽²⁾⁽³⁾	$	9.42		$	0.22		$	(2.29	)	$	(5.29	)
Adjusted net income (loss) per share, diluted ⁽²⁾⁽³⁾	$	9.29		$	0.22		$	(2.29	)	$	(5.29	)

⁽¹⁾		Includes severance and restructuring charges incurred during a company restructuring in September 2020, cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to and after emerging from chapter 11 bankruptcy and a litigation settlement.
⁽²⁾		Adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP measures. Management believes they provide useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that adjusted net income (loss) is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted net income (loss) and adjusted net income (loss) per share should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
⁽³⁾		For the combined nine months ended September 30, 2020, the Company used the Successor’s basic and diluted weighted average share count to calculate per share amounts.


WHITING PETROLEUM CORPORATION Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDAX (in thousands)
	Successor
	Three Months Ended
	September 30,			June 30,
	2021			2021
Net income (loss)	$	198,162		$	(61,489	)
Interest expense		3,871			3,981
Interest income		-			(1	)
Depreciation, depletion and amortization		51,927			51,618
Total measure of derivative loss reported under U.S. GAAP		122,559			255,409
Total cash settlements (paid) on commodity derivatives during the period		(91,413	)		(67,559	)
Non-cash stock-based compensation		2,744			2,455
Impairment expense		2,439			1,250
(Gain) on sale of properties		(90,194	)		(10,110	)
Adjusted EBITDA ⁽¹⁾		200,095			175,554
Exploration expense		1,007			797
Adjusted EBITDAX ⁽¹⁾	$	201,102		$	176,351

⁽¹⁾

Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. These measures are presented because management believes they provide useful information to investors for analysis of the Company’s performance. Adjusted EBITDA and Adjusted EBITDAX should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

WHITING PETROLEUM CORPORATION Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDAX (in thousands)
	Successor						Predecessor			Non-GAAP
	Nine Months Ended September 30, 2021			One Month Ended September 30, 2020			Eight Months Ended August 31, 2020			Combined Nine Months Ended September 30, 2020
Net income (loss)	$	135,727		$	40,270		$	(3,965,461	)	$	(3,925,191	)
Interest expense		12,955			2,128			73,054			75,182
Interest income		(1	)		(6	)		(211	)		(217	)
Income tax benefit		-			(12,185	)		(56,374	)		(68,559	)
Depreciation, depletion and amortization		157,274			20,110			338,757			358,867
Amortization of deferred gain on sale		-			-			(5,116	)		(5,116	)
Total measure of derivative (gain) loss reported under U.S. GAAP		524,661			(30,594	)		(181,614	)		(212,208	)
Total cash settlements received (paid) on commodity derivatives during the period, net of premiums/costs		(198,266	)		1,031			45,483			46,514
Non-cash stock-based compensation		7,508			-			3,719			3,719
Impairment expense		5,130			-			4,161,885			4,161,885
Gain on extinguishment of debt		-			-			(25,883	)		(25,883	)
(Gain) loss on sale of properties		(100,304	)		395			927			1,322
Reorganization items, net		-			-			(217,419	)		(217,419	)
Restructuring and other one-time costs ⁽¹⁾		-			9,333			32,888			42,221
Adjusted EBITDA ⁽²⁾		544,684			30,482			204,635			235,117
Exploration expense		2,985			4,207			22,945			27,152
Adjusted EBITDAX ⁽²⁾	$	547,669		$	34,689		$	227,580		$	262,269

⁽¹⁾		Includes severance and restructuring charges incurred during a company restructuring in September 2020, cash retention incentives paid to Predecessor executives and directors in 2020, third-party advisory and legal fees incurred prior to and after emerging from chapter 11 bankruptcy and a litigation settlement.
⁽²⁾		Adjusted EBITDA and Adjusted EBITDAX are non-GAAP measures. These measures are presented because management believes they provide useful information to investors for analysis of the Company’s performance. Adjusted EBITDA and Adjusted EBITDAX should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

WHITING PETROLEUM CORPORATION Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow (in thousands)
	Successor
	Three Months Ended
	September 30,			June 30,
	2021			2021
Net cash provided by operating activities	$	189,890		$	183,246
Changes in working capital		4,788			(13,483	)
Accrued capital expenditures		(66,936	)		(58,468	)
Adjusted free cash flow ⁽¹⁾	$	127,742		$	111,295


	Successor						Predecessor			Non-GAAP
	Nine Months Ended September 30, 2021			One Month Ended September 30, 2020			Eight Months Ended August 31, 2020			Nine Months Ended September 30, 2020
Net cash provided by operating activities	$	526,329		$	11,640			112,613			124,253
Changes in working capital		1,958			5,004			(59,815	)		(54,811	)
Accrued capital expenditures		(181,006	)		(3,489	)		(185,362	)		(188,851	)
Adjusted free cash flow ⁽¹⁾	$	347,281		$	13,155		$	(132,564	)	$	(119,409	)

⁽¹⁾

Adjusted free cash flow is a non-GAAP measure. This measure is presented because management believes it provides useful information to investors for analysis of the Company’s ability to internally fund acquisitions and development activity and reduce its borrowings outstanding under its revolving credit facility. This measure should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies. The Company is unable to present a reconciliation of forward-looking adjusted free cash flow because components of the calculation, including fluctuations in working capital accounts, are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. The Company believes that forward-looking estimates of adjusted free cash flow are important to investors because they assist in the analysis of its ability to generate cash from our operations.

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company engaged in the development, production and acquisition of crude oil, NGLs and natural gas primarily in the Rocky Mountains region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Montana. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

Forward-Looking Statements

This news release contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected production, cash flows, revenues, costs, capital expenditures and debt levels, the effect of acquisitions and divestitures and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as “guidance,” or “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.

These risks and uncertainties include, but are not limited to, risks associated with:

declines in, or extended periods of low oil, NGL or natural gas prices;
the occurrence of epidemic or pandemic diseases, including the coronavirus pandemic;
actions of the Organization of Petroleum Exporting Countries and other oil exporting nations to set and maintain production levels;
the impacts of hedging on our results of operations;
regulatory developments, including the potential shutdown of the Dakota Access Pipeline and new or amended federal, state and local initiatives relating to the regulation of hydraulic fracturing, air emissions and other aspects of oil and gas operations that could have a negative effect on the oil and gas industry and/or increase costs of compliance;
the geographic concentration of our operations;
our inability to access oil and gas markets due to market conditions or operational impediments;
adequacy of midstream and downstream transportation capacity and infrastructure;
shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services;
adverse weather conditions that may negatively impact development or production activities;
potential losses and claims resulting from our oil and gas operations, including uninsured or underinsured losses;
lack of control over non-operated properties;
cybersecurity attacks or failures of our telecommunication and other information technology infrastructure;
revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors;
inaccuracies of our reserve estimates or our assumptions underlying them;
impact of negative shifts in investor sentiment and public perception towards the oil and gas industry and corporate governance standards;
climate change issues;
litigation and other legal proceedings; and
other risks described under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2020.

We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006157/en/

Contacts

Company Contact: Brandon Day

Title: Investor Relations Manager

Phone: 303‑837‑1661

Email: Brandond@whiting.com

Whiting Petroleum Reports Third Quarter 2021 Financial and Operating Results

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