Whiting Petroleum Announces 2020 Guidance and Organizational Changes to Better Position the Company for 2021
- Sep 17, 2020
- Business Wire
DENVER--(BUSINESS WIRE)--Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) announced today that it has evaluated and reduced its cost structure to better align Whiting’s business with the current operating environment. The Company is also updating its 2020 guidance to reflect an increased focus on capital discipline.
Whiting recently implemented a new organizational structure whereby the Company has reduced its total workforce by 16%, of which over 90% were corporate positions. Whiting expects these changes to the organization to generate approximately $20 million in annualized cost savings. In conjunction with the reorganization, Whiting is reducing the compensation of its officers by 15% to 20%, realigning officer bonus programs, reducing the number of corporate executives, and initiating salary reductions across a broad group of employees. The full impact of these G&A reductions is expected to be realized in 2021, while the effect in 2020 is largely expected to be offset by related one-time charges.
As the Company has emerged from restructuring and is responding to the current environment, it is updating its guidance for the second half of 2020. The following table provides guidance for the second half 2020 based on current forecasts.
"I'm pleased with what we have accomplished in bringing on a new board, new leadership and new vision for the Company post emergence. The changes implemented are building a culture of capital discipline and demonstrating efficiencies and cost savings throughout the organization. We look forward to announcing preliminary 2021 guidance in conjunction with our third quarter 2020 results,” said Lynn A. Peterson, Chief Executive Officer of Whiting.
Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that develops, produces, acquires and explores for crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.
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 revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as we “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: the effects of the Chapter 11 petitions (the “Chapter 11 Cases”) on the Company’s liquidity or results of operation or business prospects; the effects of the Chapter 11 Cases on the Company’s business and the interests of various constituents; declines in, or extended periods of low oil, NGL or natural gas prices; the Company’s level of success in exploration, development and production activities; the Company’s ability to generate sufficient cash flows from operations to meet the internally funded portion of its capital expenditures budget; the Company’s ability to obtain external capital to finance exploration and development operations; the Company’s inability to access oil and gas markets due to market conditions or operational impediments, including any court rulings which may result in the inability to transport oil on the Dakota Access Pipeline; the impact of negative shifts in investor sentiment towards the oil and gas industry; impacts resulting from the allocation of resources among the Company’s strategic opportunities; the geographic concentration of the Company’s operations; impacts to financial statements as a result of impairment write-downs and other cash and noncash charges; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors; inaccuracies of the Company’s reserve estimates or assumptions underlying them; the timing of the Company’s exploration and development expenditures; risks relating to decreases in the Company’s credit rating; market availability of, and risks associated with, transport of oil and gas; the Company’s ability to successfully complete asset dispositions and the risks related thereto; the Company’s ability to drill producing wells on undeveloped acreage prior to its lease expiration; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; weakened differentials impacting the price we receive for oil and natural gas; risks relating to any unforeseen liabilities of ours; the impacts of hedging on the Company’s results of operations; adverse weather conditions that may negatively impact development or production activities; uninsured or underinsured losses resulting from the Company’s oil and gas operations; lack of control over non-operated properties; failure of the Company’s properties to yield oil or gas in commercially viable quantities; the impact and costs of compliance with laws and regulations governing the Company’s oil and gas operations; the potential impact of changes in laws that could have a negative effect on the oil and gas industry; impacts of local regulations, climate change issues, negative public perception of the Company’s industry and corporate governance standards; the Company’s ability to replace its oil and natural gas reserves; negative impacts from litigation and legal proceedings; risks related to the Company’s level of indebtedness, the Company’s ability to comply with debt covenants, periodic redeterminations of the borrowing base under the Company’s credit agreement and the Company’s ability to generate sufficient cash flows from operations to service its indebtedness; unforeseen underperformance of or liabilities associated with acquired properties or other strategic partnerships or investments; competition in the oil and gas industry; any loss of the Company’s senior management or technical personnel; cybersecurity attacks or failures of the Company’s telecommunication and other information technology infrastructure; and other risks described under the caption “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the period ended December 31, 2019 and subsequent filings with the SEC. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.