Whiting to restart wells at 90 days of \\$50/bl

OREANDA-NEWS. April 29, 2016.  Top Bakken producer Whiting Petroleum will start bringing wells online once oil prices touch \\$50/bl and stay there for at least 90 days.

Bringing down its inventory of drilled but uncompleted wells (DUC) "would be one of the first things we would do at higher prices," chief executive Jim Volcker said in an earnings call today. "\\$50/bl is the price where we would move forward on that."

The independent yesterday raised its output guidance on the back of an agreement it signed with an undisclosed private party to share drilling and completion costs.

Volcker said there are more opportunities to sign similar joint venture agreements across its other acreage but a call on how to develop those resources will depend on where oil prices are.

"We will evaluate as oil prices rise whether we want to drill those or whether we want to JV them," he said.

Under the agreement signed on 14 April, the party will pay 65pc of drilling and completion costs for a 50pc working interest in 44 gross Williston basin wells in North Dakota.

Whiting raised its output guidance for the year to 131,400-136,900 b/d of oil equivalent (boe/d), without raising its capital expenditures (capex). Back in February when the producer announced a steep cut of 80pc in its 2016 capex from a year earlier to \\$500mn, it had reduced its output guidance for the year to 128,000-138,000 boe/d. That compared with an output of 163,200 boe/d in 2015.

As oil prices rise, the independent's first priority will be to pay down its debt, Volcker said. Long-term debt rose to \\$5.3bn as of 31 March from \\$5.2bn at the end of last year. The second priority will be to look at adding rigs while keeping its spending "right around discretionary cash flow," he said.

At its February guidance, the independent said it expects to have an inventory of 73 DUCs in the Bakken and Three Forks formations by the end of this year and a further 95 in the Niobrara formation.

Whiting will also continue with its plan to sell non-core assets, after it disposed of properties worth \\$512mn last year. Unlike last year, however, it didn't disclose a date or a target for asset sales since "people saying we wouldn't get there" grew tiresome, Volker said.

"We had a plan, we stuck to it," he said. "This year we have the same thing. I am highly confident we will execute."

The independent yesterday said it posted a loss of \\$172mn in the first quarter compared with a loss of \\$106mn a year earlier.