Whiting Petroleum Corp cut its 2015 budget on July 29 less than two weeks after raising it, a turnaround that underscores the uncertainty engulfing the energy industry while crude prices sit roughly 50 percent below last year's levels.
The company, North Dakota's largest oil producer, tends to be seen as a key barometer of the health of the U.S. shale industry. Its spending trepidation is sure to have ripple effects on drilling contractors and other oilfield service providers.
Whiting now plans to spend $2.15 billion this year, running eight drilling rigs instead of a previous plan for 11, and mulling small divestments to bolster the company's balance sheet.
Just 12 days ago the company had boosted its budget by 15 percent to $2.3 billion, citing "strong results" from its second quarter.
As crude prices plunged below $50 per barrel, the Whiting board of directors met and decided to adjust the budget, yet again.
"We decided given the oil price environment we would trim that (budget) back," said Whiting spokesman Eric Hagen.
The Denver-based company reported a net loss of $149.3 million, or 73 cents per share, compared with a net profit of $151.4 million, or $1.26 per share, in the year-ago period.
Excluding one-time items, the company earned 4 cents per share. By that measure, analysts expected Whiting to break even for the quarter, according to Thomson Reuters I/B/E/S.
Production rose 55 percent to 170,240 barrels of oil equivalent per day.
Whiting plans to hold a conference call to discuss the results with investors and analysts on the morning of July 30.
The company's stock rose 7 percent on July 29 to close at $23.18, a jump in line with the broader market after U.S. government data showed a surprisingly large crude stockpile draw that signaled the market may have been wrong in predicting slumping demand for energy.
Recommended Reading
Ithaca Energy to Buy Eni's UK Assets in $938MM North Sea Deal
2024-04-23 - Eni, one of Italy's biggest energy companies, will transfer its U.K. business in exchange for 38.5% of Ithaca's share capital, while the existing Ithaca Energy shareholders will own the remaining 61.5% of the combined group.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.
TotalEnergies to Acquire Remaining 50% of SapuraOMV
2024-04-22 - TotalEnergies is acquiring the remaining 50% interest of upstream gas operator SapuraOMV, bringing the French company's tab to more than $1.4 billion.
TotalEnergies Cements Oman Partnership with Marsa LNG Project
2024-04-22 - Marsa LNG is expected to start production by first quarter 2028 with TotalEnergies holding 80% interest in the project and Oman National Oil Co. holding 20%.
Is Double Eagle IV the Most Coveted PE-backed Permian E&P Left?
2024-04-22 - Double Eagle IV is quietly adding leases and drilling new oil wells in core parts of the Midland Basin. After a historic run of corporate consolidation, is it the most attractive private equity-backed E&P still standing in the Permian Basin?