Thursday, November 8, 2012

STO (BEXP) To Make Bid For WLL?


November 9, 2012: Statoil completely denies. One needs to parse the denial. Smile.

Original Post
Link here.

$7.6 billion for Whiting? Market cap today is $4.95 billion.

7.6 - 4.95 --> 2.65
2.65/4.95 --> 53%
WLL has $1.6 billion in debt.

BEXP had about 385,000 net acres in the Bakken when bought by STO.
WLL has about 700,000 net acres in the Bakken, including some very, very nice sweet spots, and a great business plan/strategy for developing the Bakken.
385 + 700 --> 1.085 million. Just shy of CLR's "1.1" million net acres if their most recently announced deal goes through.

7.6 + 1.6 --> 9.2
9.2 billion / 700,000 acres --> $13,000/Bakken acre

Diamond Resources paid a bonus of $15,000/Bakken acre in the November ND state land lease auction.


From the November, 2012, WLL corporate presentation:

Gulf Coast: 1 mboed
Michigan: 2.6 mboed

Rocky Mountains (Bakken, Niobrara, Utah), headquarters in Denver: 60 mboed

Mid-Continent (Oklahoma): 8.4 mboed

Permian (west Texas): 11 mboed

Pie chart: Permian Basin, 37%; Rocky Mts, 46%

Drilling locations (net)
  • Northern Rockies (Bakken): 334
  • Southern Rockies (non-Bakken, such as Niobrara and Utah): 283
  • Permian: 338
  • Mid-Continent: 189
CAPEX: at $885 million, CAPEX for Northern Rockies ALONE accounts for almost 50% of WLL's total CAPEX.

Back to drilling locations:

Subtract out the Bakken (334): 810 net drilling locations. Thirty percent of their drilling locations accounting for almost 50% of total CAPEX, which includes corporate-wide facilities, land, EOR, etc.

Bottom line:

DNR sold its Bakken acreage and pulled back to its core competency in the south/southwest. Might WLL be considering selling its Bakken assets and pulling back to its heritage?



    1. Well, that ends that. I will have to parse the denial. Smile.