Thursday, April 26, 2012

Data Points From WLL's Earnings Transcript -- 1Q12

Data points from WLL's earnings transcript, 1Q12 (some numbers rounded):
  • 1Q11 production at high end of guidance; nearly 15% increase sequentially
  • will raise full year guidance despite conveyance of 4,500 boepd for Whiting US Trust II (WHZ)
  • project 17 - 22% growth increase for 2012 over 2011 (vs forecast of 15 - 20%)
  • reducing long-term debt
  • production now up to 81,000 boepd  
  • the Bakken: >2,500 drilling locations; >10 years inventory at current pace
  • CAPEX: raised to $1.8 billion from $1.6 billion; represents high pace of activity in Williston Basin
  • the Bakken: 701,751 net acres; increased by 20,000 net acres y-o-y
Reservoirs:
  • Lewis & Clark/Pronghorn: Pronghorn Sand and upper Three Forks, with one (1) wellbore
  • Hidden Bench, Tarpon, Missouri Breaks, Starbuck: dual targets (MB and upper TF)
  • will test WLL's first lower Three Forks at Hidden Bench in May, 2012
  • EURs: 350,000 to 600,000
  • average cost of wells: $7 million
  • very upbeat on Pronghorn; preliminary results suggest similar to Sanish
WLL continues to lead all Bakken operators in cumulative production
  • 6-month production is 4,000 bbls BOE higher than 2nd-ranked operater
  • 6-month production is 27,000 bbls BOE better than average of the next 25 operators
Takeaway capacity for the Bakken area: > 1 million bbls by end of 2012; will expand by 412,000 bopd for 2012

Finance notes
  • some of the best cash margins "in the business": $49
  • for 2012, 45% hedged; $67 floors and $109 ceilings
  • 20% of well head natural gas in excess of $5.40/Mcf
Q&A
  • Joint Venture? that was the original plan, but results are so good, WLL may not want a partner
  • cost of a completed Niobrara well? drilling, $2 million; completion, $2 million; total: about $4.3 million
  • drilling inventory? in the Sanish, WLL has completed almost all of their middle Bakken wells; maybe 14 more middle Bakken wells in the Sanish to drill; the remainder will be TF wells
  • cost of a WLL well? $6 million Sanish; $7 million elsewhere
  • in the Pronghorn: fewer rigs will be needed, because all wells off of the pad; 2 or 3 wells/pad; save time on moving rigs
  • Pronghorn: could be 100,000 acres de-risked before it's all over
  • Missouri Breaks, the wells don't look so good? correct -- lower IPs, but smaller decline; EURs should be 300,000 to 340,000 boe range; well cost in Missouri Breaks? $7 million; hope to bring it down over time
  • rigs? 19 in Williston Basin
  • 7 rigs in the Sanish; will keep busy for 2, almost 2.5 years; 5 in the Pronghorn; 1 at Lewis & Clark; 2 at Hidden Bench; 2 at Missouri Breaks; and 1 in Starbuck. That totals 18.
  • Robinson Lake Gas Plant: netting $3 million/month (50% interest)
  • ability to acquire any more acreage in the Williston Basin? 60,000 to 80,000 net acres, maybe

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