Took a quick glance at Whiting Petroleum Q1' 2019 to see if there was a special reason they have been extra decimated in the past year, including losing half their stock value in just about 2-months.
Whiting in a Williston basin focused producer who primarily does business in North Dakota.
Q1 results showed that Whiting, a Bakken shale producer, saw a 3% drop in crude production with an increase in NGL and natural gas production, quite the contrary to what the market wants to see. North Dakota is already well passed egress capabilities on natural gas and overproduction of NGLs by shale producer led to a 76% drop q-o-q in realized pricing. Overall, revenues were down significant and the company was not free cash flow positive despite claiming to be a peer leader in their presentation.
Debt slightly increased and keeps the company hasn't been generating enough cash to pay them off. going up. 2020 there are convertible notes (US$500 million worth) due and as of now, Whiting hasn't been able to generate enough free cash flow to give me confidence that they will make the payment without taking out an even higher interest loan, similar to what Centennial Resources had to do last year at 8.5%.
Be very careful here: I would wait to see if the promises in Q1 come to fruit in Q2, because getting gassier, more NGL, less crude from declines, more debt and nearing maturity dates is not what the market wants to see with shale companies.
Whiting in a Williston basin focused producer who primarily does business in North Dakota.
Q1 results showed that Whiting, a Bakken shale producer, saw a 3% drop in crude production with an increase in NGL and natural gas production, quite the contrary to what the market wants to see. North Dakota is already well passed egress capabilities on natural gas and overproduction of NGLs by shale producer led to a 76% drop q-o-q in realized pricing. Overall, revenues were down significant and the company was not free cash flow positive despite claiming to be a peer leader in their presentation.
Debt slightly increased and keeps the company hasn't been generating enough cash to pay them off. going up. 2020 there are convertible notes (US$500 million worth) due and as of now, Whiting hasn't been able to generate enough free cash flow to give me confidence that they will make the payment without taking out an even higher interest loan, similar to what Centennial Resources had to do last year at 8.5%.
Be very careful here: I would wait to see if the promises in Q1 come to fruit in Q2, because getting gassier, more NGL, less crude from declines, more debt and nearing maturity dates is not what the market wants to see with shale companies.