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Whiting (WLL) Closes the Williston Buyout, D-J Basin Sale

Whiting (WLL) concludes the acquisition of Williston basin assets from a private company for a total cash value of $271 million.

This story originally appeared on Zacks

Whiting Petroleum Corporation WLL recently reported the completion of its formerly announced acquisition of leasehold interests and related properties in North Dakota's Williston Basin.

- Zacks

The company acquired the Williston basin assets from a private company for a total cash consideration of $271 million. The assets involve 8,752 net acres with net daily production of 4,200 barrels of oil equivalent per day (Boe/d), of which 80% comprises oil. It includes five gross/2.3 net drilled and uncompleted wells as well as 61 gross/39.5 net undrilled locations in Mountrail County.

The purchased assets are adjacent to Whiting’s existing operations in the Sanish field. Hence, the company expects minimal additional general and administrative costs to operate the acreage. The assets are expected to enable the company to increase its capital efficiency by extending laterals on certain wells when combined with its existing acreage.

The company also informed that it concluded the sale of its Redtail leasehold rights and related assets in the Denver-Julesburg (D-J) Basin of Colorado including associated midstream assets.

Whiting divested its Redtail to an undisclosed private entity in a $187-million deal. The deal, which includes the production and midstream assets, and covers 67,278 net acres with a daily output of nearly 7,100 Boe/d. Of the total, 51% comprises oil. The transactions will contribute to a significantly larger drilling inventory in the company’s major Sanish operating area.

Both purchases left a negligible impact on the company’s present production but added about 60 drillable sites that are now competing for funding.

The company completed redetermining its borrowing base under its revolving credit facility (the revolver) in conjunction with the closure of the two transactions. The borrowing base and aggregate commitments were both confirmed at $750 million, matching the prior level. The revolver was used to cover the $90-million difference between the purchase expenses and divestment proceeds of the two deals. By the end of this year, Whiting anticipates having a positive cash position and no outstanding revolver borrowings.

Headquartered in Denver, CO, Whiting is an independent energy player involved in exploring, developing and producing oil and gas properties in the United States. The company is scheduled to release third-quarter 2021 earnings results on Nov 4 2021. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is $2.52 per share and for revenues is $272.93 billion.

Zacks Rank & Other Stocks to Consider

Whiting currently sports a Zack Rank #1 (Strong Buy). Some other top-ranked players in the energy space are Canadian Natural Resources Limited CNQ, Continental Resources, Inc. CLR and Magnolia Oil & Gas Corp MGY, each presently flaunting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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