Whiting Corporate Presentation -- February 7, 2012 -- The Bakken, North Dakota, USA

Raw notes taken while listening to the webcast. If I am alerted when the slides are available, this post could be updated. A reader has alerted me that the slides are now available for viewing at Whiting's home page.

Data points below not checked for accuracy; typed quickly while listening to the audiocast.  Don't use any of the data points as your sole source for research. Feel free to correct me/add "color"

Whiting audiocast: no slides available yet.

Big takeaways for me on this presentation:

• Multiple pay zones
• Pronghorn Sands part of the Bakken formation, not the Three Sands
• WLL location numbers very, very conservative
• Low-cost driller
• Reason for differential at Clearbrook
• 10-year inventory of drilling
• Vertical wells in the Red River, no fracking, almost a sure thing, $3 million each

Data points:

• Disclaimer: probable and possible reserves published unlike some other companies
• De-risked: definition on the slide (which I don't have)
• 86%, up from 83% last year; the percentage of oil will keep going up
• Rocky Mountain (Bakken), Mid-Continental, Permian (EOR project -- 1 billion bbls)
• Majority of production from the Bakken
• Reserves: 305 boe to 345 boe/ 13% increase yoy
• Per share value on reserves: $61
• Debt: $10/share
• Can get share value to $80/share
• Completed their Belfield gas plant, late 2011; 10 million cfd
• February 1: Lewis and Clark prospect, Pronghorn  -- via pipeline
• $136 million budged for new acreage; could change significantly; that's where they are starting
• Sanish is pretty much all booked; 70 locations not yet in proved 
• > 1,000,000 gross acres; 680,000 net acres
• Lewis & Clark: Three Forks; a bit of Pronghorn, but very limited in thickness
• Pronghorn: much thicker Pronghhorn Sands
• Pronghorn is definitely part of the Bakken formation, not the Three Forks
• Sanish and Cassandra: B Zone of the middle Bakken; started leasing 6 years ago due to the
• Tarpon, M: moved down one layer; down to the C Bench of the middle Bakken; looks more similar to conventional -- porosity and permeability; 
• Hidden Bench: fully de-risked; numerous operators here; great area 
• Tarpon: only one well -- 7,000 boepd, record; best well in the Bakken so far
• Missouri Breaks: "de-risked" -- but Whiting had not drilled a well yet; very excited; similar to Hidden Bench and Missouri Breaks; in between Rough
• Starbucks: JV this one; will perform well, EUR 350; just doesn't compete with our other prospects; if no JV, WLL will go it alone
• Lewis & Clark, Pronghorn: middle Bakken doesn't exist; Three Forks and Pronghorn Sands (part of the Bakken formation)
• Big Island: vertical Red River wells; scheduled to be drilled during the winter months; no fracking required; C Zone; $3 million cost; no hyperbolic decline; EUR 400K; the play is working because of 3-D seismic; drilled four; successful on three; first one was unsuccessful -- due to old seismic data  -- drill 49 locations; one rig
• No inventory: WLL shows their de-risked locations -- 3+ years drilling in front of them
• WLL gets lots of grief for no growth; "it's all Sanish";  WLL says look at wells for 1280 -- Hidden Bench WLL says 2 wells/1280 -- other operators say 4 - 8 wells/1280 -- if WLL went to 4 - 8 wells/1280 -- 10 year inventory for WLL; possibly 4 wells, but not 8 wells; WLL's location count is very, very conservative
• Missouri Breaks/Starbucks: locations not listed yet; more growth
• Sanish: 350 - 600 EUR boe
• Sanish: 800 boe EUR
• Most other prospects should be at the upper end; some prospects at 350 EUR (all boe)
• 30-, 60-, 90- production: need to see the slides
• This is the one he wants to talk about; a lot of grief about the Pronghorn; analysts say the Pronghorn not that good; WLL disagrees -- Pronghorn wells are very, very good; need to see the slides; Marsh well; Brunei well; they think they are getting great wells with the Pronghorn; they think it will compete with Sanish; most not yet producing for 30 days so no 60-day, 90-day production
• Clearbrook capacity being increased to take ND Bakken
• ND state November production:  >500,000 bopd
• January and February: highest differentials at Clearbrook, -$13 from NYMEX; low demand this time of the year; refinery turnaround for this reason; west coast refineries turning around now; demand not there; differential will shrink in the spring

Q&A:
Q: WLL is low cost drill in the Bakken. How to improve?
A: WLL plans to just focus on production big time. Costs: multi-well pads in the Sanish; Pronghorn -- half their rigs at the Pronghorn; many on multi-well pads; $8.8 million/well on multi-well pads -- remember, these are long laterals; the $8.8 million includes completion, buildings, etc. He says actual drilling costs for a WLL well is $6.4 vs $7 million average for others. 17 days to drill a well  in Sanish; 23 days outside of Sanish; so they can get six more days off the Pronghorn wells, for example

Q: Opportunities for more acreage in the Bakken at good prices?
A: No.

From the slides: Pronghorn 4Q11 Completions, in BOEPD

• Pronghorn Federal 34-11TFH, 1,645
• Pronghorn Federal 21-14TFH, 1,849
• Brueni 21-16TFH, 889
• Mastel 41-18TFH, 3,218
• Marsh 21-16TFH-R, 2,694
• Obrigewitch 11-17TFH, 1,740
• Pronghorn Federal 21-13TFH, 3,225
• Pronghorn average: 2,184