Whiting’s (NYSE: WLL) 2016 third quarter capex of $85 million was under budget and relatively flat with the second quarter. Production in the third quarter came in at the high end of guidance and totaled 11.0 million barrels of oil equivalent (MMBOE), an average of 119,890 barrels of oil equivalent per day (BOE/d). Production was comprised of 85% crude oil/natural gas liquids (NGLs). Whiting continued to lower its lease operating expense (LOE). LOE for the third quarter averaged $7.98 per BOE, below the low end of guidance. Third quarter LOE benefitted from the sale of higher operating expense North Ward Estes properties, continued operating efficiencies and better than anticipated production results.

James J. Volker, Whiting’s Chairman, President and CEO, commented, “During the third quarter, we continued to improve our capital efficiency with production at the high end of guidance on lower than projected capital spending, and LOE per BOE improving to $7.98 per BOE on the sale of North Ward Estes. This resulted in our net cash from operating activities exceeding our capital spending by $66 million. In the Williston Basin, the combination of high quality acreage and innovative completion methods drove solid results. Our thirteen new wells completed in McKenzie County tested at an average rate of 3,727 BOE/d and our leading edge design 10+ million pound completions in Williams County are tracking a 1,500 MBOE type curve. We believe the focus on balance sheet strength and capital spending discipline in the first nine months of 2016 provides us with a strong financial base to continue to deliver solid operational results and realize the potential of our world class asset base.”

Operating and Financial Results

The following table summarizes the operating and financial results for the third quarter of 2016 and 2015, including non-cash charges recorded during those periods:

       
Three Months Ended
September 30,
2016   2015  
Production (MBOE/d) (1) 119.89 160.59
Net cash provided by operating activities-MM $ 151.3 $ 373.1
Discretionary cash flow-MM (2) $ 163.1 $ 279.9
Realized price ($/BOE) $ 32.34 $ 37.86
Total revenues-MM $ 129.2 $ 508.0
Net loss available to common shareholders-MM (3)(4)(5)(6)(7) $ (693.1 ) $ (1,865.1 )
Per basic share $ (2.47 ) $ (9.14 )
Per diluted share $ (2.47 ) $ (9.14 )
 
Adjusted net loss available to common shareholders-MM (8) $ (133.1 ) $ (35.4 )
Per basic share $ (0.47 ) $ (0.17 )
Per diluted share $ (0.47 ) $ (0.17 )
 
(1)   Third quarter 2015 includes 10,180 BOE/d from properties that have since been divested.
 
(2) A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.
 
(3) For the three months ended September 30, 2016, net loss available to common shareholders included $11 million of pre-tax, non-cash derivative losses or $0.02 per basic and diluted share after tax. For the three months ended September 30, 2015, net loss available to common shareholders included $153 million of pre-tax, non-cash derivative gains or $0.47 per basic and diluted share after tax.
 
(4) For the three months ended September 30, 2016, net loss available to common shareholders included a $47 million pre-tax, non-cash gain on extinguishment of debt, or $0.10 per basic and diluted share after tax. The Company did not recognize any gain on extinguishment of debt during the 2015 period presented.
 
(5)

For the three months ended September 30, 2015, this amount includes $1.7 billion in non-cash pre-tax impairment charges for the partial write-down of the North Ward Estes Field in Texas and other non-core proved and unproved oil, gas, and CO2 properties that were not being developed due to depressed oil and gas prices. The Company did not recognize any impairment write-downs with respect to its proved oil and gas or CO2 properties during the 2016 period presented.

 
(6) During the three months ended September 30, 2015, goodwill related to the acquisition of Kodiak Oil and Gas Corp. in December 2014 (the “Kodiak Acquisition”) with a carrying amount of $870 million was written down to a fair value of zero, resulting in a non-cash impairment charge of $870 million, which resulted from lower commodity prices. The Company did not recognize any goodwill impairment write-downs during the 2016 period presented.
 
(7) During the third quarter of 2016, the Company’s note exchange transactions resulted in an ownership shift under Section 382 of the Internal Revenue Code and will limit the Company’s usage of certain of its net operating losses and tax credits in the future. Accordingly, the Company recorded a non-cash charge of $454 million for the write-down of and valuation allowance against the Company’s deferred tax assets.
 
(8) A reconciliation of net loss available to common shareholders to adjusted net loss available to common shareholders is included later in this news release.
 

The following table summarizes the first nine months operating and financial results for 2016 and 2015, including non-cash charges recorded during those periods:

       
 
Nine Months Ended
September 30,
2016   2015  
Production (MBOE/d) (1) 133.58 165.90
Net cash provided by operating activities-MM $ 358.3 $ 901.3
Discretionary cash flow-MM (2) $ 417.0 $ 909.8
Realized price ($/BOE) $ 29.31 $ 40.22
Total revenues-MM $ 760.8 $ 1,627.3
Net loss available to common shareholders-MM (3)(4)(5)(6)(7) $ (1,165.8 ) $ (2,120.5 )
Per basic share $ (4.92 ) $ (11.01 )
Per diluted share $ (4.92 ) $ (11.01 )
 
Adjusted net loss available to common shareholders-MM (8) $ (466.3 ) $ (65.4 )
Per basic share $ (1.97 ) $ (0.34 )
Per diluted share $ (1.97 ) $ (0.34 )
 
(1)   The nine months ended September 30, 2015 includes 10,520 BOE/d from properties that have since been divested.
 
(2) A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.
 
(3) For the nine months ended September 30, 2016, net loss available to common shareholders included $102 million of pre-tax, non-cash derivative losses or $0.27 per basic and diluted share after tax. For the nine months ended September 30, 2015, net loss available to common shareholders included $32 million of pre-tax, non-cash derivative losses or $0.10 per basic and diluted share after tax.
 
(4) For the nine months ended September 30, 2016, net loss available to common shareholders included a $42 million pre-tax, non-cash loss on extinguishment of debt, or $0.11 per basic and diluted share after tax. For the nine months ended September 30, 2015, net loss available to common shareholders included a $6 million pre-tax, non-cash loss on extinguishment of debt, or less than $0.01 per basic and diluted share after tax.
 
(5) For the nine months ended September 30, 2015, this amount includes $1.7 billion in non-cash pre-tax impairment charges for the partial write-down of the North Ward Estes Field in Texas and other non-core proved and unproved oil, gas, and CO2 properties that were not being developed due to depressed oil and gas prices. The Company did not recognize any impairment write-downs with respect to its proved oil and gas or CO2 properties during the 2016 period presented.
 
(6) During the nine months ended September 30, 2015, goodwill related to the Kodiak Acquisition with a carrying amount of $870 million, was written down to a fair value of zero, resulting in a non-cash impairment charge of $870 million, which resulted from lower commodity prices. The Company did not recognize any goodwill impairment write-downs during the 2016 period presented.
 
(7) During the nine months ended September 30, 2016, the Company’s note exchange transactions resulted in an ownership shift under Section 382 of the Internal Revenue Code and will limit the Company’s usage of certain of its net operating losses and tax credits in the future. Accordingly, the Company recorded a non-cash charge of $454 million for the write-down of and valuation allowance against the Company’s deferred tax assets.
 
(8) A reconciliation of net loss available to common shareholders to adjusted net loss available to common shareholders is included later in this news release.
 

Operations Update

Whiting controls 738,479 gross (443,125 net) acres in the Williston Basin and 153,937 gross (129,035 net) acres at its Redtail Niobrara play. In the third quarter 2016, total net production for the Company averaged 119,890 BOE/d. The Bakken/Three Forks play in the Williston Basin averaged 105,645 BOE/d and the Redtail Niobrara/Codell play in the DJ Basin averaged 10,945 BOE/d.

Enhanced completion wells continue to track 900 MBOE type curve after 265 days. Whiting’s previously disclosed set of 48 enhanced completion wells in the Williston Basin continue to produce in line with a 900 MBOE type curve after 265 days. These wells span Whiting’s acreage and are located in Billings, Dunn, McKenzie, Mountrail, Stark and Williams counties, North Dakota. On average, these wells were completed with 36 stages and 6.6 million pounds of sand.

Large volume completion wells tracking 1,500 MBOE type curve after 90 days. During the third quarter 2016, Whiting brought on two large volume completions located approximately ten miles apart in Williams County, North Dakota. Whiting completed the Carscallen 31-14-4H Bakken well with 13.6 million pounds of sand and the P Bibler 155-99-16-31-30-1H Bakken well with 10.1 million pounds of sand. Both wells are tracking a 1,500 MBOE type curve after 90 days on production.

Rolla Federal Unit wells test at average rate of 3,727 BOE/d. During the quarter, Whiting recommenced operations in the Central Williston Basin. Between mid-September and early October 2016, the company brought on thirteen wells in McKenzie County at its Rolla Federal unit. The wells were completed with an average of 7.3 million pounds of sand and tested at an average 24-hour rate of 3,727 BOE/d.

Faster drilling times and longer laterals increase value at Redtail. In Whiting’s Redtail Niobrara/Codell play in the DJ Basin, the average time to drill a well from spud to spud has decreased 30% to 7 days over the past twelve months. This was driven by more efficient operations and a new wellbore design that eliminates intermediate casing. The Company continues to increase the number of 1,280-acre spaced wells in its drilling program. Year-to-date, it has drilled 34 1,280-acre spaced wells in an average time of 4.5 days from spud to total depth and 7.5 days from spud to spud. It recently drilled a 1,280-acre spaced well from spud to total depth in a Whiting record time of 2.75 days. Whiting estimates that a 1,280-acre spaced well has the potential to deliver approximately 40% higher reserves for only a 12.5% increase in cost relative to its standard 960-acre spaced well.

Other Financial and Operating Results

The following table summarizes the Company’s net production and commodity price realizations for the quarters ended September 30, 2016 and 2015:

           
 
Three Months Ended
September 30,
2016 2015 Change

Production

Oil (MMBbl) 7.76 11.70 (34 %)
NGLs (MMBbl) 1.62 1.49 9 %
Natural gas (Bcf) 9.91 9.53 4 %
Total equivalent (MMBOE) (1) 11.03 14.77 (25 %)
 

Average sales price

Oil (per Bbl):
Price received $ 36.58 $ 39.45 (7 %)
Effect of crude oil hedging (2)   5.30   4.72
Realized price $ 41.88 $ 44.17 (5 %)
Weighted average NYMEX price (per Bbl) (3) $ 44.93 $ 46.52 (3 %)
 

NGLs (per Bbl):

Realized price $ 8.65 $ 10.55 (18 %)
 

Natural gas (per Mcf):

Realized price $ 1.79 $ 2.83 (37 %)
Weighted average NYMEX price (per Mcf) (3) $ 2.93 $ 2.74 7 %
 
(1)   Third quarter 2015 includes 10,180 BOE/d from properties that have since been divested.
 
(2) Whiting received $41 million and $55 million in pre-tax cash settlements on its crude oil hedges during the third quarter of 2016 and 2015, respectively. A summary of Whiting’s outstanding hedges is included later in this news release.
 
(3) Average NYMEX prices weighted for monthly production volumes.
 

Third Quarter and First Nine Months 2016 Costs and Margins

A summary of production, cash revenues and cash costs on a per BOE basis is as follows:

               
 
Three Months Ended Nine Months Ended
September 30, September 30,
2016     2015       2016     2015  
(per BOE, except production)
Production (MMBOE) 11.03 14.77 36.60 45.29
 
Sales price, net of hedging $ 32.34 $ 37.86 $ 29.31 $ 40.22
Lease operating expense 7.98 8.50 8.40 9.61
Production tax 2.39 3.00 2.16 3.21
Cash general & administrative 2.49 2.54 2.53 2.50
Exploration 0.79 1.43 1.08 2.38
Cash interest expense 4.64 4.83 4.72 4.75
Cash income tax expense (benefit)   0.01   (0.03 )   -   (0.01 )
$ 14.04 $ 17.59   $ 10.42 $ 17.78  
 

Third Quarter and First Nine Months 2016 Drilling and Expenditures Summary

The table below summarizes Whiting’s operated and non-operated drilling activity and capital expenditures for the three and nine months ended September 30, 2016.

                                 
Gross/Net Wells Completed
Total New % Success CAPEX
Producing Non-Producing Drilling Rate (in MM)
Q3 16 22 / 9.9 0 / 0 22 / 9.9 100% / 100% $  

85.0 (1)

9M 16 64 / 38.2 0 / 0 64 / 38.2 100% / 100% $

431.6 (2)

 
(1)   Includes $0 million for non-operated drilling and completion, $2 million in drilling rig early termination fees, $1 million for land, and $0 for facilities.
 
(2) Includes $34 million for non-operated drilling and completion, $18 million in drilling rig early termination fees, $10 million for facilities and $3 million for land.
 

Outlook for Fourth Quarter and Full-Year 2016

The following table provides guidance for the fourth quarter and full-year 2016 based on current forecasts, including Whiting’s full-year 2016 capital budget of $550 million.

           
Guidance
Fourth Quarter Full Year
  2016           2016
Production (MMBOE) 10.4 - 10.8 47.0 - 47.4
Lease operating expense per BOE $ 8.00 - $ 8.60 $ 8.20 - $ 8.50
General and administrative expense per BOE $ 2.75 - $ 3.25 $ 3.00 - $ 3.15
Interest expense per BOE (1) $ 6.50 - $ 7.00 $ 6.50 - $ 6.90
Depreciation, depletion and amortization per BOE $ 25.00 - $26.00 $ 24.50 - $ 25.10
Production taxes (% of sales revenue) 8.75% - 9.25% 8.30% - 8.70%
Oil price differentials to NYMEX per Bbl (2) ($ 8.00) - ($ 9.00) ($ 8.00) - ($ 8.40)
Gas price differential to NYMEX per Mcf ($ 0.90) - ($ 1.20) ($ 0.95) - ($ 1.15)
 
(1)   Includes non-cash interest expense related to Whiting’s 2018, 2019, 2020, 2021 and 2023 convertible notes. Full-year 2016 cash interest expense is projected at $4.50 – $5.00 per BOE.
 
(2) Does not include the effect of NGLs.
 

Commodity Derivative Contracts

Whiting is 68% hedged for the remainder of 2016 and 49% hedged for 2017 as a percentage of September 2016 oil production.

The following summarizes Whiting’s crude oil hedges as of October 1, 2016:

                       
 
Weighted Average As a Percentage of
Derivative Hedge Contracted Crude NYMEX Price September 2016
Instrument Period (Bbls per Month) (per Bbl) Oil Production
Three-way collars (1) 2016
Q4 1,400,000 $43.75 - $53.75 - $74.40 57.4%
2017
Q1 950,000 $34.21 - $44.47 - $60.06 39.0%
Q2 950,000 $34.21 - $44.47 - $60.06 39.0%
Q3 950,000 $34.21 - $44.47 - $60.06 39.0%
Q4 950,000 $34.21 - $44.47 - $60.06 39.0%
Collars 2016
Q4 250,000 $51.00 - $63.48 10.3%
2017
Q1 250,000 $53.00 - $70.44 10.3%
Q2 250,000 $53.00 - $70.44 10.3%
Q3 250,000 $53.00 - $70.44 10.3%
Q4 250,000 $53.00 - $70.44 10.3%
(1)   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.
 

Selected Operating and Financial Statistics

         
 
Three Months Ended Nine Months Ended
September 30,   September 30,
2016   2015   2016   2015  
Selected operating statistics:
Production
Oil, MBbl 7,758 11,699 26,442 36,305
NGLs, MBbl 1,621 1,487 4,954 3,899
Natural gas, MMcf 9,908 9,529 31,235 30,517
Oil equivalents, MBOE 11,030 14,774 36,602 45,290
Average prices
Oil per Bbl (excludes hedging) $ 36.58 $ 39.45 $ 32.70 $ 42.63
NGLs per Bbl $ 8.65 $ 10.55 $ 7.78 $ 13.38
Natural gas per Mcf $ 1.79 $ 2.83 $ 1.25 $ 2.44
Per BOE data
Sales price (including hedging) $ 32.34 $ 37.86 $ 29.31 $ 40.22
Lease operating $ 7.98 $ 8.50 $ 8.40 $ 9.61
Production taxes $ 2.39 $ 3.00 $ 2.16 $ 3.21
Depreciation, depletion and amortization $ 25.80 $ 21.40 $ 24.61 $ 20.36
General and administrative $ 3.07 $ 3.03 $ 3.07 $ 2.95
Selected financial data:
(In thousands, except per share data)
Total revenues and other income $ 129,225 $ 508,041 $ 760,815 $ 1,627,282
Total costs and expenses $ 464,729 $ 2,968,006 $ 1,744,273 $ 4,473,866
Net loss available to common shareholders $ (693,052 ) $ (1,865,108 ) $ (1,165,841 ) $ (2,120,493 )
Loss per common share, basic $ (2.47 ) $ (9.14 ) $ (4.92 ) $ (11.01 )
Loss per common share, diluted $ (2.47 ) $ (9.14 ) $ (4.92 ) $ (11.01 )
 

Weighted average shares outstanding, basic

280,418 204,143 237,100 192,549
Weighted average shares outstanding, diluted 280,418 204,143 237,100 192,549
Net cash provided by operating activities $ 151,321 $ 373,120 $ 358,255 $ 901,256
Net cash provided by (used in) investing activities $ 216,109 $ (395,418 ) $ (140,852 ) $ (1,840,315 )
Net cash provided by (used in) financing activities $ (364,439 ) $ (125 ) $ (215,127 ) $ 898,690
 

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, to be filed with the Securities and Exchange Commission.

   

WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)

 
September 30, December 31,
2016   2015  
ASSETS
Current assets:
Cash and cash equivalents $ 18,329 $ 16,053
Accounts receivable trade, net 216,378 332,428
Derivative assets 34,054 158,729
Prepaid expenses and other   17,877     27,980  
Total current assets   286,638     535,190  
Property and equipment:
Oil and gas properties, successful efforts method 13,721,164 13,904,525
Other property and equipment   135,788     168,277  
Total property and equipment 13,856,952 14,072,802
Less accumulated depreciation, depletion and amortization   (4,188,500 )   (3,323,102 )
Total property and equipment, net   9,668,452     10,749,700  
Other long-term assets   110,654     104,195  
TOTAL ASSETS $ 10,065,744   $ 11,389,085  
 

WHITING PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share and per share data)

   
September 30, December 31,
2016   2015
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable trade $ 41,382 $ 77,276
Revenues and royalties payable 138,075 179,601
Accrued capital expenditures 45,702 94,105
Accrued interest 9,052 62,661
Accrued lease operating expenses 34,260 55,291
Accrued liabilities and other 60,598 50,261
Taxes payable 45,868 47,789
Accrued employee compensation and benefits   23,007     32,829
Total current liabilities 397,944 599,813
Long-term debt 4,085,629 5,197,704
Deferred income taxes

738,432

593,792
Asset retirement obligations 164,289 155,550
Deferred gain on sale 38,471 48,974
Other long-term liabilities   36,960     34,664
Total liabilities  

5,461,725

    6,630,497
Commitments and contingencies
Equity:

Common stock, $0.001 par value, 600,000,000 shares authorized;
  289,676,901 issued and 284,343,983 outstanding as of September
  30, 2016 and 206,441,303 issued and 204,147,647 outstanding as
  of December 31, 2015

290 206
Additional paid-in capital

5,671,074

4,659,868
Retained earnings (accumulated deficit)   (1,075,311 )   90,530
Total Whiting shareholders' equity

4,596,053

4,750,604
Noncontrolling interest   7,966     7,984
Total equity  

4,604,019

    4,758,588
TOTAL LIABILITIES AND EQUITY $

10,065,744

  $ 11,389,085
 

WHITING PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)

       
Three Months Ended Nine Months Ended
September 30, September 30,
2016   2015   2016   2015  
REVENUES AND OTHER INCOME:
Oil, NGL and natural gas sales $ 315,554 $ 504,155 $ 942,287 $ 1,674,530
Loss on sale of properties (189,934 ) (359 ) (193,729 ) (61,937 )
Amortization of deferred gain on sale 3,490 3,666 11,111 13,240
Interest income and other   115     579     1,146     1,449  
Total revenues and other income   129,225     508,041     760,815     1,627,282  
 
COSTS AND EXPENSES:
Lease operating expenses 87,982 125,575 307,530 435,315
Production taxes 26,372 44,303 79,125 145,410
Depreciation, depletion and amortization 284,569 316,147 900,877 922,077
Exploration and impairment 24,293 1,690,679 85,565 1,829,160
Goodwill impairment - 869,713 - 869,713
General and administrative 33,908 44,821 112,227 133,788
Interest expense 84,578 84,551 245,145 247,984
(Gain) loss on extinguishment of debt (46,541 ) - 42,236 5,634
Derivative gain, net   (30,432 )   (207,783 )   (28,432 )   (115,215 )
Total costs and expenses   464,729     2,968,006     1,744,273     4,473,866  
 
LOSS BEFORE INCOME TAXES (335,504 ) (2,459,965 ) (983,458 ) (2,846,584 )
 
INCOME TAX EXPENSE (BENEFIT):
Current 113 (422 ) 115 (357 )
Deferred   357,438     (594,425 )   182,286     (725,686 )
Total income tax expense (benefit)   357,551     (594,847 )   182,401     (726,043 )
 
NET LOSS (693,055 ) (1,865,118 ) (1,165,859 ) (2,120,541 )
Net loss attributable to noncontrolling interests   3     10     18     48  
 
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $ (693,052 ) $ (1,865,108 ) $ (1,165,841 ) $ (2,120,493 )
 
LOSS PER COMMON SHARE:
Basic $ (2.47 ) $ (9.14 ) $ (4.92 ) $ (11.01 )
Diluted $ (2.47 ) $ (9.14 ) $ (4.92 ) $ (11.01 )
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic   280,418     204,143     237,100     192,549  
Diluted   280,418     204,143     237,100     192,549  
 

WHITING PETROLEUM CORPORATION
Reconciliation of Net Loss Available to Common Shareholders to
Adjusted Net Loss Available to Common Shareholders
(in thousands, except per share data)

       
Three Months Ended Nine Months Ended
September 30, September 30,
2016   2015   2016   2015  
Net loss available to common shareholders $ (693,052 ) $ (1,865,108 ) $ (1,165,841 ) $ (2,120,493 )
Adjustments net of tax:
Amortization of deferred gain on sale (2,188 ) (2,308 ) (6,966 ) (8,335 )
Loss on sale of properties 119,089 226 121,468 38,989
Impairment expense 9,747 1,051,017 28,783 1,083,472
Goodwill impairment (non-taxable) - 869,713 - 869,713
Penalties for early termination of drilling rig contracts 1,338 7,076 11,335 47,720
(Gain) loss on extinguishment of debt (29,181 ) - 26,482 3,546

Total measure of derivative gain reported under U.S. GAAP

(19,080 ) (130,799 ) (17,826 ) (72,528 )

Total net cash settlements received on commodity derivatives during the period

25,781 34,760 81,843 92,565

Tax impact of Section 382 limitation on net operating losses

  454,467     -     454,467     -  
Adjusted net loss (1) $ (133,079 ) $ (35,423 ) $ (466,255 ) $ (65,351 )
 
Adjusted net loss available to common shareholders per share, basic $ (0.47 ) $ (0.17 ) $ (1.97 ) $ (0.34 )
Adjusted net loss available to common shareholders per share, diluted $ (0.47 ) $ (0.17 ) $ (1.97 ) $ (0.34 )
 
(1)   Adjusted Net Loss 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 Loss 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 Loss 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.
 

WHITING PETROLEUM CORPORATION
Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow
(in thousands)

               
Three Months Ended Nine Months Ended
September 30, September 30,
2016   2015   2016   2015  
Net cash provided by operating activities $ 151,321 $ 373,120 $ 358,255 $ 901,256
Exploration 8,747 21,072 39,659 108,000
Exploratory dry hole costs (37 ) (68 ) (37 ) (867 )
Changes in working capital   3,020     (114,248 )   19,115     (98,574 )
Discretionary cash flow (1) $ 163,051   $ 279,876   $ 416,992   $ 909,815  
 
(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.
 

Conference Call

The Company’s management will host a conference call with investors, analysts and other interested parties on Thursday, October 27, 2016 at 11:00 a.m. EDT (10:00 a.m. CDT, 9:00 a.m. MDT) to discuss Whiting’s third quarter 2016 financial and operating results. Participants are encouraged to pre-register for the conference call by clicking on the following link: http://dpregister.com/10093213. Callers who pre-register will be given a unique telephone number and PIN to gain immediate access on the day of the call.

Those without internet access or unable to pre-register may join the live call by dialing: (877) 328-5506 (U.S.); (866) 450-4696 (Canada) or (412) 317-5422 (International) to be connected to the call. Presentation slides will be available at http://www.whiting.com by clicking on the “Investor Relations” box on the menu and then on the link titled "Presentations & Events."

A telephonic replay will be available beginning one to two hours after the call on Thursday, October 27, 2016 and continuing through Thursday, November 3, 2016. You may access this replay at (877) 344-7529 (U.S.); 855-669-9658 (Canada) or (412) 317-0088 (International) and enter the pass code 10093213. You may also access a web archive at http://www.whiting.com beginning one to two hours after the conference call.

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

Forward-Looking Statements

This news release contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify 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: declines in or extended periods of low oil, NGL or natural gas prices; our level of success in exploration, development and production activities; risks related to our level of indebtedness, ability to comply with debt covenants and periodic redeterminations of the borrowing base under our credit agreement; impacts to financial statements as a result of impairment write-downs; our ability to successfully complete asset dispositions and the risks related thereto; revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors; adverse weather conditions that may negatively impact development or production activities; the timing of our exploration and development expenditures; inaccuracies of our reserve estimates or our assumptions underlying them; risks relating to any unforeseen liabilities of ours; our ability to generate sufficient cash flows from operations to meet the internally funded portion of our capital expenditures budget; our ability to obtain external capital to finance exploration and development operations; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; the potential impact of federal debt reduction initiatives and tax reform legislation being considered by the U.S. Federal Government that could have a negative effect on the oil and gas industry; unforeseen underperformance of or liabilities associated with acquired properties; the impacts of hedging on our results of operations; failure of our properties to yield oil or gas in commercially viable quantities; availability of, and risks associated with, transport of oil and gas; our ability to drill producing wells on undeveloped acreage prior to its lease expiration; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; uninsured or underinsured losses resulting from our oil and gas operations; our inability to access oil and gas markets due to market conditions or operational impediments; the impact and costs of compliance with laws and regulations governing our oil and gas operations; our ability to replace our oil and natural gas reserves; any loss of our senior management or technical personnel; competition in the oil and gas industry; cyber security attacks or failures of our telecommunication systems; and other risks described under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the period ended June 30, 2016 and Annual Report on Form 10-K for the period ended December 31, 2015. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.