Whiting Writes Off Kodiak | Russell T. Rudy Energy LLC
“Rigzone” reports that Whiting Petroleum, the largest oil producer in North Dakota, has written off $2.57 billion in assets. $870 million of this write off relates to the 2014 purchase of Kodiak Oil for $1.55 billion. The write down of the Kodiak assets is surprising to many industry observers, as these were largely prime acreage in the core of the Bakken shale. In the Kodiak transaction, Whiting effectively bought 167 million barrels of oil equivalent reserves for $23.77 per barrel.
Whiting also wrote off $1.7 billion in Texas properties that are currently being produced via CO2 flooding and are no longer economic at today’s prices.
As a result of these write downs, Whiting lost $9.14 per share in the third quarter of this year, but still beat Wall Street’s expectation. It should be noted that both Occidental and Anadarko have announced write offs recently as a result of the oil price collapse.
On the bright side, Whiting’s CEO, Jim Volker, stressed that the company has enough cash and access to credit to get through this downturn. He also expressed the company’s commitment to improvement through cost cuts and technology.
In spite of these financial reversals, Whiting has increased production to 160,590 barrels of oil equivalent per day with oil prices at roughly half their previous levels.
To read the article in its entirety, please go to http://www.rigzone.com/news/oil_gas/a/141329/Whiting .
