UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement | |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ¨ | Definitive Proxy Statement | |
| x | Definitive Additional Materials | |
| ¨ | Soliciting Material Pursuant to Section 240.14a-12 | |
Whiting Petroleum Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required | |||
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. | |||
| (1) | Title of each class of securities to which transaction applies:
| |||
| (2) | Aggregate number of securities to which transaction applies:
| |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
| |||
| (4) | Proposed maximum aggregate value of transaction:
| |||
| (5) | Total fee paid:
| |||
| ¨ | Fee paid previously with preliminary materials. | |||
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
| (1) | Amount Previously Paid:
| |||
| (2) | Form, Schedule or Registration Statement No.:
| |||
| (3) | Filing Party:
| |||
| (4) | Date Filed:
| |||
Whiting Petroleum Corporation
ENERGY + TECHNOLOGY = GROWTH
WHITING
The New Independent American Exploration & Production Company: Different, Stronger, Better
AICPA
National AICPA Oil & Gas Conference
November 18, 2014
Forward-Looking Statements, Non-GAAP
Measures, Reserve and Resource Information
This presentation contains statements that Whiting Petroleum Corporation (“Whiting”) believes to be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including statements regarding the expected benefits of Whiting’s proposed acquisition (the “Acquisition”) of Kodiak Oil & Gas Corp. (“Kodiak”) to Whiting and Kodiak and their shareholders, the anticipated completion of the Acquisition or the timing thereof, the expected future reserves, production, financial position, business strategy, revenues, earnings, costs, capital expenditures and debt levels of the combined company, and plans and objectives of management for future operations, are 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 ability to obtain shareholder and court approvals of the proposed Acquisition; the ability to complete the proposed Acquisition on anticipated terms and timetable; Whiting’s and Kodiak’s ability to integrate successfully after the Acquisition and achieve anticipated benefits from the Acquisition; the possibility that various closing conditions for the Acquisition may not be satisfied or waived; risks relating to any unforseen liabilities of Whiting or Kodiak; declines in oil, NGL or natural gas prices; level of success in exploration, development and production activities; the impacts of federal and state laws; the impacts of hedging on results of operations; uncertainty regarding future operating results and plans, objectives and expectations; and other risks described under the caption “Risk Factors” in Whiting’s and Kodiak’s Annual Reports on Form 10-K for the period ended December 31, 2013, Quarterly Reports on Form 10-Q for the period ended June 30, 2014 and Kodiak’s Quarterly Report on Form 10-Q for the period ended June 30, 2014. Whiting assumes no obligation, and disclaim any duty, to update the forward-looking statements in this communication. Whiting’s production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. In this presentation, we refer to Adjusted Net Income, Discretionary Cash Flow and EBITDAX, which are non-GAAP measures that the Company believes are helpful in evaluating the performance of its business. A reconciliation of such non-GAAP measures to the relevant GAAP measures can be found at the end of the presentation.
Whiting uses in this presentation the terms proved, probable and possible reserves. Proved reserves are reserves which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward from known reservoirs under existing economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. Probable reserves are reserves that are less certain to be recovered than proved reserves, but which, together with proved reserves, are as likely as not to be recovered. Possible reserves are reserves that are less certain to be recovered than probable reserves. Estimates of probable and possible reserves which may potentially be recoverable through additional drilling or recovery techniques are by nature more uncertain than estimates of proved reserves and accordingly are subject to substantially greater risk of not actually being realized by the Company.
Whiting uses in this presentation the term “total resources,” which consists of contingent and prospective resources, which SEC rules prohibit in filings of U.S. registrants. Contingent resources are resources that are potentially recoverable but not yet considered mature enough for commercial development due to technological or business hurdles. For contingent resources to move into the reserves category, the key conditions or contingencies that prevented commercial development must be clarified and removed. Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development projects prepared. Estimates of resources are by nature more uncertain than reserves and accordingly are subject to substantially greater risk of not actually being realized by the Company.
Energy + Technology =WHITING Growth
NYSE: WLL
2
Why Whiting Focuses on Oil
Oil / Gas Price Ratio 18:1
NYMEX Crude Oil and Natural Gas Prices
January 4, 2000 - November 12, 2014
$160
$140
NYMEX Crude $120
Oil Price $100
($/Bbl) $80
$60
$40
$20
$0
$77.18
$4.19
$ 18
$16 NYMEX
$14 Natural
$12 Gas Price
$10 ($/BTU)
$8
$6
$4
$2
$0
January 4, 2000
July 4, 2000
January 4, 2001
July 4, 2001
January 4, 2002
July 4, 2002
January 4, 2003
July 4, 2003
January 4, 2004
July 4, 2004
January 4, 2005
July 4, 2005
January 4, 2006
July 4, 2006
January 4, 2007
July 4, 2007
January 4, 2008
July 4, 2008
January 4, 2009
July 4, 2009
January 4, 2010
July 4, 2010
January 4, 2011
July 4, 2011
January 4, 2012
July 4, 2012
January 4, 2013
July 4, 2013
January 4, 2014
July 4, 2014
NYMEX Crude Oil Price ($/Bbl) NYMEX Natural Gas Price ($/BTU)
Source: Energy Information Association
Energy + Technology = WHITING Growth
NYSE: WLL
3
The Near Term
OECD Inventories at Low End of 5 Year Range
OECD Industry Total Oil Stocks
Relative to Five-Year Average
mb
100
50
0
-50
-100
-150
Aug 12 Feb 13 Aug 13 Feb 14 Aug 14
Asia Oceania
Europe
Americas
OECD
Source: International Energy Agency
Energy + Technology = WHITING Growth
NYSE: WLL
4
Worldwide Vehicle Production Continues to Exceed
Population Growth
31% versus 10%
World Population
7,200,000,000
7,000,000,000
6,800,000,000
6,600,000,000
6,400,000,000
6,200,000,000
6,000,000,000
6.5 B
10%
7.1 B
2005 2006 2007 2008 2009 2010 2011 2012 2013
World Population
World Automobile Production
90,000,000
85,000,000
80,000,000
75,000,000
70,000,000
65,000,000
60,000,000
55,000,000
50,000,000
66 MM
31%
87 MM
2005 2006 2007 2008 2009 2010 2011 2012 2013
World Automobile Production
(1) Includes passenger and commercial vehicles
Source: United States Census Board and International
Organization of Motor Vehicle Manufacturers
Energy + Technology = WHITING Growth
NYSE: WLL
5
The Long Term
+7 to +14 MMBOPD of Additional Supply Necessary by 2020 to
Meet Global Demand
Global Demand
MMBOPD
110
105
100
95
90
85
80
75
1% Annual Historical Growth
2009-2013
2% Growth
Scenario
+14 MMBOPD
1% Growth
Scenario
+7 MMBOPD
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1% Growth in Consumption
2% Growth in Consumption
Global Consumption
Source: International Energy Agency; Whiting Estimates
Energy + Technology = WHITING Growth
NYSE: WLL
6
Not Just Emerging Market Growth
U.S. Demand Grows by 747,955 BOPD or +4%
December 2012 - September 2014
MMBOPD
20.00
19.50
19.00
18.50
18.00
17.50
17.00
18.1
18.9
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Source: Energy Information Administration
Energy + Technology = WHITING Growth
NYSE: WLL
Outside North America Major Producers Have Fallen Short
North Africa + West Africa + UK North Sea + Mexico + Venezuela + Brazil
Production Has Decreased 1.8 MMBOPD 2009 - 2014
Includes Increase in Libyan Output
20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
-10%
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
North Africa
West Africa
United Kingdom North Sea Mexico
Venezuela
Brazil
Source: EIA Short Term Energy Outlook
Energy + Technology = WHITING Growth
NYSE: WLL
8
U.S. Growth Has Met The Challenge
Adding ~5.5 MMBOPD 2009 - 2014: North Dakota Production
Growth A Major Driver
Total US Production of Crude Oil
Jan. 2009 - Aug. 2014
MMBOPD
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Total US Production (MMBOPD)
North Dakota Production of Crude Oil:
Jan. 2009 - Aug. 2014
1,200.0
1,000.0
800.0
600.0
400.0
200.0
0.0
1,132 MBOPD
Jan-09
Aug-09
Mar-09
Oct-10
May-11
Dec-11
Jul-12
Feb-13
Sep-13
Apr-14
North Dakota Production (MBOPD)
Source: EIA Short Term Energy Outlook
Source: North Dakota Industrial Commission
Energy + Technology = WHITING Growth
NYSE: WLL
9
U.S. Becoming More Energy Independent
Crude Oil Imports Decreased 2.3 MMBOPD
Crude Oil Consumption
18.0
16.0
14.0
12.0
10.0
MMBOPD 8.0
6.0
4.0
2.0
0.0
Imports 9.9 MMBOPD
Imports 7.6 MMBOPD
U.S. Production 8.7 MMBOPD
Total Consumption 16.3 MMBOPD(1)
Jan-2009
Mar-2009
May-2009
Jul-2009
Sep-2009
Nov-2009
Jan-2010
Mar-2010
May-2010
Jul-2010
Sep-2010
Nov-2010
Jan-2011
Mar-2011
May-2011
Jul-2011
Sep-2011
Nov-2011
Jan-2012
Mar-2012
May-2012
Jul-2012
Sep-2012
Nov-2012
Jan-2013
Mar-2013
May-2013
Jul-2013
Sep-2013
Nov-2013
Jan-2014
Mar-2014
May-2014
Jul-2014
US Crude Oil Production (MMBOPD) US Imports Crude (MMBOPD)
(1) Does not include 2.3 MMBOPD of NGLs.
Source: EIA Short Term Energy Outlook
Energy + Technology = WHITING Growth
NYSE: WLL
10
U.S. Becoming More Energy Independent
U.S. Petroleum Products Exports Increased 2.2 MMBOEPD
U.S. Petroleum Products Imports Decreased 1.3 MMBOEPD
Today U.S. is a Net Exporter of 1.7 MMBOEPD US Exports of Petroleum Products
January 2009 - May 2014 (MBOEPD)
4,000 3,000 2,000 1,000 0
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
US Exports of Petroleum Products (MBOEPD)
US Imports of Petroleum Products
January 2009 - May 2014 (MBOEPD)
4,000 3,000 2,000 1,000 0
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
US Imports of Petroleum Products (MBOEPD)
Source: EIA Short Term Energy Outlook
Energy + Technology = WHITING Growth
NYSE: WLL
11
Major Economic Benefits to US
Trade Deficit Decreases by $188 Billion 2005-2014(1)
US Trade Deficit ($ Billions) 2005-2014(1)
900
800 -27%
700
600
500
$ Billions
400
2008-2009
Recession
300
200
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(1) Mid-year 2014 data annualized
Source: US Department of Commerce United States Census Bureau US International Trade in Goods and Services
Energy + Technology = WHITING Growth
NYSE: WLL
12
Light Sweet Oil Saturation Scenario Unlikely
There is Currently ~1.6 MMBOPD of Replaceable Demand for Light
Sweet Crude
Demand Outlets for Light Sweet Crude August 2014
1,800.0
1,600.0
1,400.0
1,200.0
1,000.0
MBOPD 800.0
600.0
400.0
200.0
-
Future Exports to Canada Refinery Expansion Exports from Condensate Splitters Canadian Syncrude Imports Waterborne Import rejection Total
Source: Macquarie Commodities Research
Energy + Technology = WHITING Growth
NYSE: WLL
13
Williston Basin Oil Production & Export Capacity(1)
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Barrels Per Day
Aug. 2014
Production
1,132,331 BOPD(2)
Rail Capacity
Proposed Pipelines/Refining
Confirmed Pipelines/Refining
Williston Basin NDPA Production Case 1
Williston Basin NDPA Production Case 2
Jan-07
Mar-08
May-09
Jul-10
Sep-11
Nov-12
Jan-14
Mar-15
May-16
Jul-17
Sep-18
Nov-19
Jan-21
Mar-22
May-23
Jul-24
Sep-25
Noc-26
Jan-28
Mar-29
(1) Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning. Source: The North Dakota Pipeline Authority Presentation
(2) Based on information from NDIC and Montana Board of Oil and Gas
Energy + Technology = WHITING Growth
NYSE: WLL
14
Whiting Petroleum – A Company on the Move
Four Significant Third Quarter 2014 Achievements
1) Record Production Reaches 116,675 BOE/d in Q3 2014, up 6% over Q2 2014.
- Record Bakken / Three Forks Production of 87,480 BOE/d, Up 33% YoY, 9% Sequentially.
2) Slickwater Completions Generate Strong Initial Results.
- Brehm 13-7H Well in Sanish Field IPs at 3,770 BOE/d on August 31, 2014.
- Pronghorn Federal 44-11PH IPs 2,987 BOE/d on July 9, 2014.
- Sundheim 21-27-1H Well in Missouri Breaks Field Posts 64% Greater 200-Day Cumulative Production than the Offset Well Completed Using Older Technology.
3) Tarpon Pad Demonstrates Whiting Controls Sweet Spot of Williston Basin.
- Flatland Federal 11-4HR IPs 7,120 BOE/d from the Middle Bakken on October 10, 2014.
- Flatland Federal 11-4TFH IPs 7,824 BOE/d from Upper Three Forks on October 11, 2014.
- Flatland Federal 11-4TFHU IPs 5,930 BOE/d from Lower Three Forks on October 12, 2014.
4) Redtail Niobrara Development Area Production of 8,610 net BOE/d in Q3 2014, up 19% over Q2 2014
- New Niobrara “C” Discovery. Razor 25B-2549 Achieved a Recent 10-Day Average Rate of 712 BOE/d.
- New Codell/Fort Hays Discovery. Razor 25B-2551 Achieved a Recent 10-Day Average Rate of 570 BOE/d.
- Current Production from Redtail Field has Exceeded 10,000 Net BOE/d.
Energy + Technology = WHITING Growth
NYSE: WLL
15
A Focused Company
Williston Basin
Bakken / Three Forks
87,480 BOE/d (Q3 2014)
HEADQUARTERS
Denver, Colorado
Redtail
Niobrara A and B
8,610 BOE/d (Q3 2014)
North Ward Estes
Over 9,500 BOE/d (2014)
110 MMBOE Proved Reserves(1)
104 MMBOE P2 + P3 Reserves(1)
Major Asset Areas
Q3 2014 Net Production
116.7 MBOE/d
10%
3%
87%
Rocky Mountains
Permian
Other
Bakken / Three Forks Production
100.0
80.0
60.0
40.0
20.0
-
87.5
63.5
48.9
30.3
26.3
16.8
30% CAGR (2009-2013)
2009 2010 2011 2012 2013 Q3
MBOE/d 2014
(1) At December 31, 2013 based on independent engineering.
Energy + Technology = WHITING Growth
NYSE: WLL
16
Williston Basin Highlights
October 30, 2014
Brockton-Froid
Lineament Zone
STARBUCK
Iverson 34-32-4H
IP: 1,228 BOE/d (7/25/14)
Strongest western producer to date.
Increased perforation clusters per stage.
CASSANDRA
MISSOURI BREAKS
Record Williston Basin Well
Flatland Federal 11-4TFH
IP: 7,824 BOE/d (10/11/14)
Flatland Federal 11-4HR
IP: 7,120 BOE/d (10/10/14)
Flatland Federal 11-4TFHU
IP: 5,930 BOE/d (10/12/14)
SANISH & PARSHALL
TARPON
HIDDEN BENCH
Slickwater Test Sundheim 21-27-1H had 64% greater 200-day cumulative production than offsetting well.
Slickwater Test Brehm 13-7H
IP: 3,770 BOE/d (8/31/14)
30-Day Avg: 1,716 BOE/d
Additional Frac Points Test Sovig 4 Well Pad average IP rate of 3,278 BOE/d per well. Increased perforation clusters per stage.
LEWIS & CLARK
BIG ISLAND
Pronghorn
Slickwater Test
Pronghorn Federal 44-11PH IP: 2,987 BOE/d
30-Day Avg: 1,501 BOE/d
60-Day Avg: 1,269 BOE/d
Field Target Gross Acres Net Acres
Sanish / Parshall Middle Bakken 174,398 82,517
Three Forks
Pronghorn Pronghorn Sand 178,316 115,087
Lewis & Clark Three Forks 170,274 118,784
Hidden Bench Middle Bakken 61,337 38,029
Three Forks
Tarpon Middle Bakken 8,845 6,298
Three Forks
Starbuck Middle Bakken 47,849 40,549
Three Forks
Red River
Missouri Breaks Middle Bakken 95,768 68,839
Three Forks
Cassandra Middle Bakken 29,827 13,953
Three Forks
Big Island Red River 154,620 125,403
Other ND & Montana 119,933 53,778
Total 1,041,167 663,237
Energy + Technology = WHITING Growth
NYSE: WLL
17
Sheridan Divide Renville Roosevelt Ware
Mountrail Richland McKenzie Mercer
Prairie Custer Fallon Wibaux Golden Valley Billings
Stark Slope Hettinger Grant
Maximizing Recovery Efficiency
Improving Frac Distribution
300
Older Style Sliding Sleeve Completion
Annulus
Stages
Frac Ports per Stage
Potential Entry Points
Free fluid between packers 30 1 30
250
New Style
Cemented Liner Completion
Annulus Stages Perforation Clusters per Stage Potential Entry Points
Cemented 40 3 120
Energy + Technology = WHITING Growth
NYSE: WLL
18
Exploiting the Bakken and Three Forks in the Williston
Primary and Prospective Drilling Locations
MISSOURI BREAKS
8 WELLS
CASSANDRA
12 WELLS
SANISH
15 WELLS
Lower Virden
U. Bakken Shale
Middle Bakken
L. Bakken Shale
Upr 3Fks – 1st Bench
Upr 3Fks – 2nd Bench
0’
50’
100’
150’
HIDDEN BENCH
16 WELLS
PRONGHORN
6 WELLS
TARPON
12 WELLS
Lower Virden
U. Bakken Shale
Middle Bakken
L. Bakken Shale
L. Bakken Silt
Pronghorn Sand
Upr 3Fks – 1st Bench
Upr 3Fks – 2nd Bench
0’
50’
100’
150’
CURRENT DRILLING PATTERN
POTENTIAL HIGHT DENSITY INFILLS
NEW OBJECTIVES
LEASE LINE & CROSS-UNIT
Energy + Technology = WHITING Growth
NYSE: WLL
19
Maximizing Recovery Efficiency
Improving Hidden Bench Production Rates - 21% Increase Over 90-Days
3,000
2,539
2,500
2,132
2,000
1,500
1,122
1,000 887 805 +21%
658 648
535
500
-
2013 2014
24-Hour IP 30-Day Avg. 60-Day Avg. 90-Day Avg.
Energy + Technology = WHITING Growth
NYSE: WLL
20
Williston Basin Production Profile
Per Well Results: 43% - 133% IRR at $70/Bbl - $100/Bbl NYMEX(1)(2)
1,000
EUR - 600 MBOE, CAPEX $8.0 MM
Nymex oil price/Bbl $70 $80 $90 $100
Daily ROI 2.3 2.7 3.2 3.6
Equivalent IRR (%) 43% 66% 97% 133%
Production Payout (Yrs.) 1.9 1.5 1.1 0.9
PV(10) $MM 4.72 6.95 9.40 11.61
(BOEPD) 100
10
0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180
Months On Production
(1) Please refer to the beginning of this presentation for disclosures regarding “Reserve and Resource Information.” All volumes shown are un-risked. Our pre-tax PV10% values do not purport to present the fair value of our oil and natural gas reserves.
(2) EURs, ROIs, IRRs and PV10% values will vary well to well. $70 Nymex oil price reflects $9.00 per barrel of oil equivalent differential. $80, $90 and $100 Nymex oil price reflects $10.00 per barrel of oil equivalent differential.
Energy + Technology = WHITING Growth
NYSE: WLL
21
Redtail Development Program
Economic Sweet Spot
(Weld County, Colorado)
Niobrara Initial 30-Day Average Rate
(Gas converted to oil price equivalent ratio 17:1)
Pre 2013 2013 - 14 BOEPD
1 – 350
350 – 450
450 – 550
550 – 650
650 – 750
> 750
Wattenberg Field Area
Colorado Mineral Belt Trend
Laramie
Larimer
Weld
Boulder
Broomfield
Kimball
Cheyenne
Logan
Redtail Field Area
10 5 0 10
Miles
SD WY NE CO KS
OBJECTIVE Niobrara “A” Chalk Niobrara “B” Chalk Niobrara “C” Chalk Fort Hays/Codell
DEVELOPMENT PLAN
Mix of 960 and 640-acre spacing units
8 Wells per spacing unit Niobrara “A”
8 Wells per spacing unit Niobrara “B” 3,300+ potential drilling locations based on only Niobrara “A” and “B”
ACREAGE
Whiting has assembled 181,026 gross (129,669 net) acres in our Redtail prospect in the northeastern portion of the DJ Basin.
Average WI of 72%
Average NRI of 59%
COMPLETED WELL COST Horizontal: $5.5 MM
DRILLING HIGHLIGHTS
Recently completed two test wells in the Niobrara “C” and Fort Hays/Codell formations.
-The Razor 25B-2549 well achieved a recent 10-day average rate of 712 BOE/d from the Niobrara “C”
-The Razor 25B-2551 well achieved a recent 10-day average rate of 570 BOE/d from the Fort Hays/Codell
Source: IHS and internal Whiting production database
Energy + Technology = WHITING Growth
NYSE: WLL
22
Redtail Development Program
Geologic Sweet Spot
NE Trending, Right Lateral Wrench Faults
Extension of Colorado Mineral Belt
Oil
Nat. Gas
Redtail Prospect
WYOMING COLORADO
Axis of Denver Basin
11N 9N 7N 5N 3N
1N 1S 3S 5S 0 6 12 miles 0 10 20 km
69W 68W 67W 66W 65W 64W R.J. WEIMER, 10/95
Energy + Technology = WHITING Growth
Fort Collins
Colorado Mineral Belt Golden Denver
Boulder Study Area Reservoir Compartments C.G. WFZ
S 2 3 25 F/1000 LA. WFZ Lo. WFZ J. WFZ W. WFZ R0 = 1
NYSE: WLL
23
Unconventional Reservoir Characterization
Determining mobile fraction of Oil in Place (MOIP)
% of Total 6 Molecular Diameters of Common Hydrocarbons % of Total 6 Conventional Oil Reservoirs
5 5
4 4
3 1 Nanometer 1 Micrometer 3
2 2
1 Hydrocarbon Species 1 Hydrocarbon Species Pore Threats
Diameter (M) Diameter (M) Diameter (M) Diameter (M)
10-9 10-8 10-7 10-6 10-5 10-9 10-8 10-7 10-6 10-5
% of Total 6 Unconventional Oil Reservoirs (Effective) % of Total 6 Unconventional Oil Reservoirs (non-effective)
5 5
4 4
3 3
2 2
1 Pore Threats Hydrocarbon Species 1 Pore Threats Hydrocarbon Species
10-9 10-8 10-7 10-6 10-5 10-9 10-8 10-7 10-6 10-5
(1000 nanometers = 1 micron) Energy + Technology = WHITING Growth
NYSE: WLL
24
Unconventional Reservoir Characterization
Denver Rock Lab
Core Layout Facility
Logging / Calibration
Sample Selection
Collaboration & Training
Environmental SEM / Qemscan
Micron-scale Resolution
Rapid Analysis
Alter Atmospheric Conditions
Dual-beam SEM
Nanometer Resolution
Dual-beam (Milling & Scanning)
3D Composite Imaging
Unconventional Oil Reservoirs
Reservoir Characterization
In-house Facility
Operated + Non-op Core
Collaboration & Training
Over 250 Cores Reviewed
U. Bakken
Shale
Middle
Bakken
L. Bk. Sh.
L. Bakken
Siltstone
Pronghorn
Three
Forks
Mineral Model
Quantitative Mineral Composition
& Abundance
Petrophysical Calibration
Accurate Log Analysis
Reservoir Simulation
Organics Volume & Distribution
Porosity Volume & Distribution
Pore throat geometry and size
Permeability model
Energy + Technology = WHITING Growth
NYSE: WLL
25
Redtail Development Program
Opportunity and Challenge of the Niobrara Reservoir
High-resolution pore structure image from Scanning Electron Microscope
5 microns
(nanometer = 1 thousandth of a micron)
(oil molecules = 20 – 200 nanometers)
5 microns
7% Porosity
13% Porosity
9985’
Middle Bakken B Facies
Braaflat 11-11
Sanish Field
Mountrail County, ND
5580.2’
Niobrara B Chalk
Terrace 36-32M
Redtail Area
Weld County, CO
Energy + Technology = WHITING Growth
NYSE: WLL
26
Redtail Development Program
Niobrara Reservoir
Niobrara Reservoir
Whiting RAZOR 25-2514H
GR
Zone
PHI
Minerals
BVFluid
RES
0
200
30
-10
0
100 0.2
2000
5550
5575
5600
5625
5675
5700
5725
5750
5775
5800
5825
5850
5875
A
B
C
FRHS
Niobrara Resource Potential (1)
OOIP by Zone
Reservoir
Porosity Thickness OOIP % #
(%) (ft) (MMBOE/ 960ac)* WOGC Wells Gross Wells
NIO A 13% 35 19 81 1,344
NIO B 13% 65 40 81 1,343
NIO C 11% 25 11 80 1,316
70
Recoverable Oil 16 Well / DSU Density
(Total OOIP A Zone + B Zone = 59 MMBOE/DSU)**
16 wells 16 wells 16 wells
10% Recovery 15% Recovery 20% Recovery
370 MBOE 560 MBOE 740 MBOE
Recoverable Oil 32 Well / DSU Density
(Total OOIP A Zone + B Zone + C Zone = 70 MMBOE/DSU)**
32 wells 32 wells 32 wells
15% Recovery 20% Recovery 25% Recovery
330 MBOE 440 MBOE 550 MBOE
* GOR=500 cf/bo
** Stimulated Rock Volume
(1) Please refer to the beginning of this presentation for disclosures regarding “Reserve and Resource Information.” Estimates updated as of December 31, 2013
Energy + Technology = WHITING Growth
NYSE: WLL
27
Redtail Development Plan
Defining Optimal Well Density
Razor Pilot
16 Wells / 960ac DSU
7920 ft.
27L Pad
Drilling Density
- 16 Wells/DSU
- 330 ft.
Target: B-B-B-B
Status: Producing
27K Pad
Drilling Density
- 16 Wells/DSU
- 330 ft.
Target: A-B-A-B
Status: Producing
NIOBRABRA
300 250 200 150 100 50
A B C
1320 ft.
Horsetail Pilot
32 Wells / 960ac DSU
7920 ft.
30F Pad
Drilling Density
- 32 Wells/DSU
- 165 ft.
Target: C-B-A-B-A-B-C-B
Status: Drilling
1320 ft.
NIOBRABRA
300 250 200 150 100 50
A B C
Producing Wells
Planned Wells
Future Infill Wells
Energy + Technology = WHITING Growth
NYSE: WLL
28
Redtail Niobrara Production Profile
Per Well Results: 42% - 123% IRR at $70/Bbl - $100/Bbl NYMEX(1)(2)
Daily Equivalent Production (BOEPD)
1000
100
10
EUR - 420 MBOE, CAPEX $5.5 MM
Nymex oil price/Bbl $70 $80 $90 $100
ROI 2.5 3.1 3.6 4.1
IRR (%) 42% 63% 90% 123%
Payout (Yrs.) 2.0 1.5 1.1 0.9
PV(10) $MM 3.57 5.17 6.77 8.38
0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180
Months
(1) Please refer to the beginning of this presentation for disclosures regarding “Reserve and Resource Information.” All volumes shown are un-risked. Our pre-tax PV10% values do not purport to present the fair value of our oil and natural gas reserves.
(2) EURs, ROIs, IRRs and PV10% values will vary well to well. Differential reflects $4.75 per barrel of oil equivalent per fixed differential.
Energy + Technology = WHITING Growth
NYSE: WLL
29
Drilling Time / Cost Projection
Spud to TD (Days)
Spud to TD (Days)
25 20 15 10 5 0
Spud to TD (Days)
10 Well Moving Average
10 Well Avg Drlg Cost before Comp
$1.35 MM
6.7 Days
Razor 27I-3415A
Horsetail 30F-1941
Razor 21A-0913
Horsetail 29G-2012B
Horsetail 30F-1942
Horsetail 02D-0204
Horsetail 30F-1943
Razor Fed 30K-3107
Horsetail 30F-1944
Horsetail 30F-1945
Razor 27J-2210B
Razor 21C-0906
Razor 21C-0907
Horsetail 30F-1947
Razor 27J-2212B
Horsetail 30F-1948
Horsetail 30F-3108
Horsetail 33M-2804
Razor 25B-2551
Horsetail 30F-3105
Razor 26L-3504B
Razor 26L-3503A
Razor 26L-3501A
Razor Federal 26L-...
Razor Federal 26L-...
Razor Federal 26J-...
Razor 26I-2314B
Razor 26L-3502B
Razor Federal 26L-...
Razor Federal 26J-...
Razor 11E-0204B
Razor Federal 26J-...
Razor 26K-2305A
Razor 11E-0202B
Razor Federal 26J-...
Razor 26K-3508B
Razor 26K-2308B
Razor 26K-2306B
Razor 21C-2807A
Razor 21C-2805A
Cottonwood 08E-0504
$3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0
Drilling Cost before Completion (Millions)
Energy + Technology = WHITING Growth
NYSE: WLL
30
Total Proppant Pumped per Well
Million Lbs
9.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Optimizing Frac Design Avg. 5.5 mm # sand
Well Count
Energy + Technology = WHITING Growth
NYSE: WLL
31
Redtail Infrastructure Plan: A Great Place to Find an Oil Field!
September 2014
Redtail Facilities Plan
Planned Gathering System
Gas Gathering Lines 141 Miles
Oil Gathering Lines 111 Miles
SW Gathering Lines 54 Miles
Frac Water Supply Lines 16 Miles
Redtail Gas Plant
Train 1 Capacity (Online) 20 MMcf/d
Train 2 Capacity (Q1 2015) 50 MMcf/d
Train 3 Capacity (2016) 70 MMcf/d
Takeaway Capacity (2016) 140 MMcf/d
Capital Investment
Gas Plant $100 MM
Gas Gathering / Field Compression $95 MM
Oil Gathering / LACTs $80 MM
Electricity $40 MM
Total $315 MM
Trailblazer REX
to KC area hub to East OH hub
Trailblazer/REX
Laterals Pony Express
to Cushing,OK
Redtail Gas Plant
UET Pawnee
Tallgrass NGL Oil Terminal
to OPPL
Pony Express Lateral
OPPL to Conway,KS hub
WY NE CO
3rd Party Pipelines
Other
OIL
GAS
NGL
Energy + Technology = WHITING Growth
NYSE: WLL
32
Oil Focused Strategy Delivers Consistently Strong
Margins
Consistently Delivering Strong EBITDA Margins (1)
Oil $86.78/Bbl
NGL $36.01/Bbl
Gas $4.08/Mcf
Whiting Realized Prices(1) $/BOE
$90.00 $80.00 $82.16
$73.88 $76.76 $74.88/BOE
$80.00 $69.85
$70.00 $61.48
$60.00
$45.01 $50.89/66% $58.51/71% $52.31/70%
$50.00 $50.65/68% $46.16/66% $54.31/68%
$41.58/68%
$40.00
$30.00 $25.71/57% 4% 3% 2% 1%
2% 3%
5% 2% 5% 5% 5% 5% 4% 5%
$20.00 5% 5% 8% 8% 9% 8%
7% 7% 8% 9%
$10.00 26% 18% 17% 18% 16% 16% 15% 15%
$0.00
2009 2010 2011 2012 2013 Q1 2014 Q2 2014 Q3 2014
Lease Operating Expense Production Taxes G&A Exploration Expense EBITDA
(1) Includes hedging adjustments.
Energy + Technology = WHITING Growth
NYSE: WLL
33
Total Capitalization - A Strong Balance Sheet
($ in Thousands)
Sept. 30, 2014 Dec. 31, 2013
Cash and Cash Equivalents $28,053 $699,460
Long-Term Debt:
Senior Notes $2,303,347 $2,303,834
Credit Agreement 100,000 -
Senior Subordinated Notes 350,000 350,000
Total Long-Term Debt $2,753,347 $2,653,834
Shareholders’ Equity 4,254,149 3,828,567
Total Capitalization $7,007,496 $6,482,401
Debt to Cap(1) of 39% and Debt to TTM EBITDAX(2) of 1.25 as of September 30, 2014
(1) Debt to Capitalization is calculated as follows: $2,753,347 Long-Term Debt divided by $7,007,496 Total Capitalization equals 39%. (2) Please refer to the Reconciliation of Net Income to trailing twelve months EBITDAX found later in this presentation.
Energy + Technology = WHITING Growth
NYSE: WLL
34
Outstanding Bond and Credit Agreement
Bonds Trading above Par; Strong Liquidity
Coupon / Description Maturity Amount Outstanding Ratings Moody’s / S&P 9/30/14 Price
6.50% / Sr. Sub. 10/1/2018 $0.350 B Ba3 / BB- 103.5
5.00% / Sr. 3/15/2019 $1.100 B Ba2 / BB+ 102.3
5.75% / Sr. 3/15/2021 $1.200 B Ba2 / BB+ 105.5
Bond Finance Covenant: Ratio of pre-tax earnings to fixed charges (interest expense, realized hedging gains / losses and preferred stock dividends) must be greater than 2:1. It was 12.57:1 at 9/30/14.
Restricted Payments Basket: Approximately $2.8 billion.
Bank Credit Agreement has a borrowing base capacity of $2.8 billion with $1.2 billion committed under which $100.0 million was drawn at 9/30/14. $3.5 billion of bank commitments upon Kodiak acquisition close.
Next redetermination date is 5/1/15.
Bank Credit Agreement Covenants: Total debt to EBITDAX at 9/30/14 was 1.25:1 (must be less than 4.0:1).
Working capital at 9/30/14 was 1.93:1 (must be greater than 1:1).
Energy + Technology = WHITING Growth
NYSE: WLL
35
Kodiak Acquisition Overview
This Highly Strategic Combination
Creates Largest Bakken / Three Forks Producer
Drives Higher Growth
Drives Better Metrics
Energy + Technology = WHITING Growth
NYSE: WLL
36
Leading Williston Basin operator
Acreage Overview (855,000 net acres)
Whiting Acreage
Kodiak Acreage
Bakken Produce
Three Forks Producer
Q1’14 Bakken / Three Forks Net Production (Mboepd)
107.3 97.5 86.0 73.3 63.0 ~60.0 54.0 49.4 42.9 42.7 34.0 31.1
PF Whiting CLR EOG1 Whiting HES XOM/XTO COP STO OAS MRO Kodiak QEP
Rigs drilling in the Williston Basin
(as of 7/13/14)2,3
18 18 18 14 14 12 10 8 7 6 6 5
PF Whiting CLR HES OAS XOM/XTO Whiting COP QEP EOG Kodiak STO MRO
Source: Company presentations, filings and press releases
1 As of December 31, 2013
2 Rigs currently drilling on July 13, 2014 per NDIC
3 As of July 13, 2014, Whiting had two additional rigs moving and Kodiak had one additional rig moving, for a combined operated 21 rigs in the Williston Basin
Energy + Technology = WHITING Growth
NYSE: WLL
MT ND Divide Wild Rose Williams Mountrail Roosevelt Polar Cassandra Koala Sanish Parshall Tarpon Ursid Missouri Breaks Hidden Bench Richland McKenzie Smokey Dunn Lewis & Clark Dunn Billings Golden Valley Pronghorn Stark
37
Larger location inventory with significant opportunity to accelerate Williston Basin drilling program
Pro Forma Williston Basin Drilling Locations (Net)
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1,339
158% increase
3,460
Potential Williston Basin net drilling locations increase by 158%
Whiting only (as of 12/31/2013)
Pro forma Whiting (as of 6/30/2014)¹
1 Includes 2,639 Whiting and Kodiak locations at 12/31/2013, plus an additional 821 combined Whiting and Kodiak identified locations as of 06/30/2014
Energy + Technology = WHITING Growth
NYSE: WLL
38
Driving value from complementary acreage positions
Central and Eastern Williston Basin
Combined 855,000 net acres in the core of Williston Basin
Footprint in the sweet-spot of the Central and Eastern Williston Basin is strategically positioned to accelerate development of the combined acreage position
Ability to drive production, reserve growth and operational efficiency across the position
Whiting Acreage
Kodiak Acreage
Bakken Producer
Three Forks Producer
Energy + Technology = WHITING Growth
NYSE: WLL
Divide Wild Rose Williams Mountrail Roosevelt Polar Cassandra Koala Sanish Parshall Tarpon Ursid Missouri Breaks Hidden Bench Richland McKenzie Smokey Dunn
39
Enhances size and scale relative to oil-weighted peers
$34.7 $33.5
Enterprise
$19.8 $17.8
Value $13.5 $11.7 $9.9 $8.7 $7.9 $7.3 $6.0
($bn)
PXD CLR CXO PF Whiting 1 XEC Whiting DNR NFX OAS SD Kodiak
LQA $3.1 $2.8 $2.4 $2.1 $1.9
EBITDAX2 $1.7 $1.4 $1.0 $1.0 $0.9 $0.7
($bn)
CLR PF Whiting PXD Whiting CXO XEC DNR NFX OAS SD Kodiak
1,084
798 606 576
Reserves 503 468 439 431 377 219 167
(Mmboe) CLR PXD PF Whiting NFX CXO DNR Whiting XEC SD OAS Kodiak
% liquids 68% 62% 88% 52% 61% 83% 89% 48% 46% 87% 83%
80% oil 79% oil 83% oil
188 171
2014E 152 141 129 112 111 81 77
Production 48 41
(Mboepd)3 PXD CLR PF Whiting XEC NFX CXO Whiting SD DNR OAS Kodiak
% liquids 68% 70% 88% 53% 56% 60% 88% 53% 95% 89% 88%
84% oil 83% oil 88% oil
Source: Company filings, equity research, Bloomberg, FactSet as of July 11, 2014
¹ Combined Whiting & Kodiak enterprise values based on transaction value as of July 11, 2014
2 Please see appendix for reconciliation of non-GAAP financial measures
3 Based on mid-point of Whiting and Kodiak public guidance, and Bloomberg Consensus estimates for peers
Energy + Technology = WHITING Growth
NYSE: WLL
40
Whiting Petroleum – A Company on the Move
Four Significant Third Quarter 2014 Achievements
1) Record Production Reaches 116,675 BOE/d in Q3 2014, up 6% over Q2 2014.
- Record Bakken / Three Forks Production of 87,480 BOE/d, Up 33% YoY, 9% Sequentially.
2) Slickwater Completions Generate Strong Initial Results.
- Brehm 13-7H Well in Sanish Field IPs at 3,770 BOE/d on August 31, 2014.
- Pronghorn Federal 44-11PH IPs 2,987 BOE/d on July 9, 2014.
- Sundheim 21-27-1H Well in Missouri Breaks Field Posts 64% Greater 200-Day Cumulative Production than the Offset Well Completed Using Older Technology. 3) Tarpon Pad Demonstrates Whiting Controls Sweet Spot of Williston Basin.
- Flatland Federal 11-4HR IPs 7,120 BOE/d from the Middle Bakken on October 10, 2014.
- Flatland Federal 11-4TFH IPs 7,824 BOE/d from Upper Three Forks on October 11, 2014.
- Flatland Federal 11-4TFHU IPs 5,930 BOE/d from Lower Three Forks on October 12, 2014.
4) Redtail Niobrara Development Area Production of 8,610 net BOE/d in Q3 2014, up 19% over Q2 2014
- New Niobrara “C” Discovery. Razor 25B-2549 Achieved a Recent 10-Day Average Rate of 712 BOE/d.
- New Codell/Fort Hays Discovery. Razor 25B-2551 Achieved a Recent 10-Day Average Rate of 570 BOE/d.
- Current Production from Redtail Field has Exceeded 10,000 Net BOE/d.
Energy + Technology = WHITING Growth
NYSE: WLL
41
Appendix
NYSE: WLL
Guidance for Q4 and Full-Year 2014
Guidance
Fourth Quarter 2014
Full-Year 2014
Production (MMBOE)
11.10 - 11.50
40.70 - 41.30
Lease operating expense per BOE
$11.25 - $ 11.75
$11.70 - $ 12.00
General and admin. expense per BOE
$3.30 - $ 3.70
$3.40 - $ 3.60
Interest expense per BOE
$3.50 - $ 3.80
$3.85 - $ 4.05
Depr., depletion and amort. per BOE
$26.25 - $ 27.00
$26.20 - $ 26.80
Prod. taxes (% of sales revenue)
8.50% - 8.70%
8.35% - 8.55%
Oil price differentials to NYMEX per Bbl(1)
($9.00) - ($ 11.00)
($9.00) -($ 11.00)
Gas price premium to NYMEX per Mcf(2)
$0.00 - $ 0.20
$0.50 - $ 1.00
(1) Does not include the effect of NGLs.
(2) Includes the effect of Whiting’s fixed-price gas contracts. Please refer to fixed-price gas contracts later in this presentation.
Energy + Technology = WHITING Growth
NYSE: WLL
43
Disciplined Hedging Strategy
Existing Crude Oil Hedge Positions(1)
Derivative Instrument
Hedge Period
Contracted Crude (Bbls per Month)
Weighted Average NYMEX Price (per Bbl)
As a Percentage of September 2014 Oil Production
Three-way collars (2)
2014
Q4
1,480,000
$71.82 - $ 85.68 - $103.85
52.3%
2015
Q1
100,000
$70.00 - $ 85.00 - $107.90
3.5%
Q2
100,000
$70.00 - $ 85.00 - $107.90
3.5%
Q3
100,000
$70.00 - $ 85.00 - $107.90
3.5%
Q4
100,000
$70.00 - $ 85.00 - $107.90
3.5%
Collars
2014
Q4
3,970
$80.00 - $122.50
<1%
(1) As of October 1, 2014.
(2) A three-way collar is a combination of options: a sold call, a purchased put and a sold put. The sold call establishes a maximum price (ceiling) we will receive for the volumes under contract. The purchased put establishes a minimum price (floor), unless the market price falls below the sold put (sub-floor), at which point the minimum price would be NYMEX plus the difference between the purchased put and the sold put strike price.
Energy + Technology = WHITING Growth
NYSE: WLL
44
Fixed-Price Contracts
Existing Natural Gas Marketing Contracts(1)
Hedge Period
Contracted Volume (MMBtu per Day)
Weighted Average Contracted Price (per MMBtu)
As a Percentage of September 2014 Gas Production
2014
Q4 11,000 $5.49 13.0%
Existing Fixed-Differential Crude Oil Sales Contracts(1)
Period
Gross Contracted Volume (Bbls per Day)
Differential from NYMEX (per Bbl)
2015 25,000 $4.75
2016 30,000 $4.75
2017 35,000 $4.75
2018 40,000 $4.75
2019 45,000 $4.75
Period
Gross Contracted Volume (Bbls per Day)
Differential from NYMEX (per Bbl)(2)
07/2015 to 12/2015 20,000 $5.00 - $6.00
01/2016 to 12/2016 20,000 $5.00 - $6.00
01/2017 to 12/2017 20,000 $5.00 - $6.00
01/2018 to 12/2018 20,000 $5.00 - $6.00
01/2019 to 12/2019 20,000 $5.00 - $6.00
01/2020 to 06/2020 20,000
$5.00 - $6.00 (1) As of October 1, 2014.
(2) The future production volumes in the table above will be sold at a price equal to NYMEX less certain fixed differentials depending on the delivery methods specified in the contract. Based on prevailing storage and transportation costs, we estimate a fixed differential of $5.00 to $6.00 per barrel below NYMEX.
Energy + Technology = WHITING Growth
NYSE: WLL
45
Adjusted Net Income(1)
($ in Thousands, Except Per Share Data)
Reconciliation of Net Income Available to Common Shareholders to Adjusted Net Income Available to Common Shareholders
Three Months Ended September 30,
Nine Months Ended September 30,
2014 2013 2014 2013
Net income available to common shareholders
Adjustments net of tax:
Amortization of deferred gain on sale
(Gain) loss on sale of properties
Impairment expense
Charge under Production Participation Plan related to sale of Postle Properties
Change in Production Participation Plan liability
Total measure of derivative (gain) loss reported under U.S. GAAP
Total net cash settlements paid on commodity derivatives during the period
Adjusted net income (1)
Adjusted net income available to common shareholders per share, basic
Adjusted net income available to common shareholders per share, diluted
$157,975 $204,101 $418,488 $424,782
(4,848) (4,882) (14,443) (14,918)
32 (73,252) (7,758) (75,415)
11,311 11,760 34,030 35,362
- 15,078 - 15,078
- (6,803) - 839
(14,995) 15,709 16,915 16,788
(820) (8,556) (4,519) (16,321)
$148,655 $153,155 $442,713 $386,195
$1.25 $1.29 $3.72 $3.27
$1.24 $1.28 $3.69 $3.24
(1) Adjusted Net Income Available to Common Shareholders is a non-GAAP financial measure. Management believes it provides useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that Adjusted Net Income Available to Common Shareholders is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted Net Income Available for Common Shareholders should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
Energy + Technology = WHITING Growth
NYSE: WLL
46
Discretionary Cash Flow(1)
($ in Thousands)
Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow
Three Months Ended September 30,
Nine Months Ended September 30,
2014 2013 2014 2013
Net cash provided by operating activities
Exploration
Exploratory dry hole costs
Changes in working capital
Preferred dividends paid
Discretionary cash flow
$457,640 $513,896 $1,349,306 $1,254,127
11,984 28,426 49,572 71,635
(350) (9,522) (3,972) (21,150)
68,959 (82,282) 181,475 (11,614)
- - - (538)
$538,233 $450,518 $1,576,381 $1,292,460
(1) Discretionary cash flow is a non-GAAP measure. Discretionary cash flow is presented because management believes it provides useful information to investors for analysis of the Company’s ability to internally fund acquisitions, exploration and development. Discretionary cash flow should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
Energy + Technology = WHITING Growth
NYSE: WLL
47
EBITDAX(1)
($ in Thousands)
Reconciliation of Net Income to EBITDAX
Reconciliation of Net Income to EBITDAX
Q4 2013 Q1 2014 Q2 2014 Q3 2014 TTM 9/30/14
Net income (loss)
Amortization of deferred gain
Gain on sale of properties
Interest income
Depreciation, depletion & amortization
Exploration
Impairment
Stock compensation
Interest expense
Loss on early extinguishment of debt
Change in long-term PPP
Noncash (gain) loss on MTM derivatives
Income taxes (benefit)
EBITDAX Total
$(59,276) $109,051 $151,426 $157,961 $359,162
(8,057) (7,744) (7,473) (7,689) (30,963)
(8,942) (10,559) (1,796) 50 (21,247)
(427) (303) (124) (101) (955)
247,381 235,265 268,509 285,658 1,036,813
23,120 24,122 13,466 11,984 72,692
302,325 17,985 18,046 17,941 356,297
5,606 6,732 4,314 6,031 22,683
43,357 42,144 39,045 39,632 164,178
4,412 - - - 4,412
(8,312) 3,636 (3,636) - (8,312)
(21,570) 23,793 20,951 (25,083) (1,909)
(19,875) 76,361 99,917 93,487 249,890
$499,742 $520,483 $602,645 $579,871 $2,202,741
Energy + Technology = WHITING Growth
NYSE: WLL
48
Important Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of a vote or proxy. The proposed Acquisition anticipates that the Whiting shares to be issued pursuant to the Acquisition will be exempt from registration under the United States Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 3(a)(10) of the Securities Act. Consequently, the Whiting shares will not be registered under the Securities Act or any state securities laws. In connection with the proposed Acquisition, on October 29, 2014, Whiting and Kodiak each filed with the SEC a definitive joint proxy statement/circular and commenced mailing such document to shareholders of Whiting and Kodiak on or about October 29, 2014. INVESTORS ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT AND CIRCULAR AND ANY OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT WHITING, KODIAK AND THE PROPOSED ACQUISITION. The joint proxy statement and circular and certain other relevant materials (when they become available) and other documents filed by Whiting or Kodiak with the SEC may be obtained free of charge at the SEC’s website at http://www.sec.gov. In addition, investors may obtain copies of these documents (when they become available) free of charge by written request to Whiting Investor Relations, 1700 Broadway, Suite 2300, Denver, CO 80290-2300 or calling (303) 390-4051 or by written request to Kodiak Investor Relations, 1625 Broadway, Suite 250, Denver, CO 80202 or calling (303) 592-8030.
Participants in the Solicitation
Whiting, Kodiak and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies in connection with the proposed Acquisition. Information about the executive officers and directors of Whiting and the number of shares of Whiting’s common stock beneficially owned by such persons is set forth in the proxy statement for Whiting’s 2014 Annual Meeting of Stockholders which was filed with the SEC on March 23, 2014, and Whiting’s Annual Report on Form 10-K for the period ended December 31, 2013. Information about the executive officers and directors of Kodiak and the number of Kodiak’s ordinary shares beneficially owned by such persons is set forth in the proxy statement for Kodiak’s 2014 Annual Meeting of Shareholders which was filed with the SEC on May 9, 2014, and Kodiak’s Annual Report on Form 10-K for the period ended December 31, 2013. Investors may obtain additional information regarding the direct and indirect interests of Whiting, Kodiak and their respective executive officers and directors in the Acquisition by reading the joint proxy statement and circular regarding the Acquisition when it becomes available.
Energy + Technology = WHITING Growth
NYSE: WLL
49