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Independant oil and gas company Whiting Petroleum Corp reported worse than expected second quarter earnings Wednesday with a surprise loss and laying off a third of it's staff. $WLL stock fell over 38% after it also guided for lower oil production, higher cash costs and weaker pricing.

Whiting Petroleum

Whiting Petroleum Corp NYSE: WLL Reported Earnings Wednesday

($0.28) EPS Missed $0.28 Expected AND $426.3 Missed $456.3 million forecast in revenue

Earnings

Whiting Petroleum reported a second quarter net loss of $5.7 million, or 6 cents a share, after income of $2.1 million, or 2 cents a share, a year ago in the second quarter. Excluding non-recurring items, the adjusted loss per share was 28 cents, compared with the FactSet EPS consensus of 28 cents.

Revenue fell 19% to $426.3 million, missing expectations of $456.3 million, while production increased 0.7%.

$WLL said late Wednesday it reduced its workforce by 33%, or 254 employees, as part of a restructuring aimed at $50 million in annual cost savings.

“We aim to be as efficient as possible and that is why we made the difficult decision to reduce our workforce in order to realize significant annualized cost savings,” Chief Executive Bradley Holly said. “The decision to reduce headcount is always a difficult one as it impacts talented colleagues and friends, but it is a necessary step in our company’s transformation.”

Whiting Petroleum Corp NYSE: WLL

Market Reaction $10.84 USD −6.85 (-38.72%)

Outlook

Whiting estimates the changes will save the company $50 million annually.

“In the face of highly volatile commodity prices and a constrained gas infrastructure market in North Dakota, we are taking strong measures to improve our margins,” Holly said. As oil production has climbed in recent months, the energy industry in North Dakota has faced a lack of pipeline and processing infrastructure to handle natural gas.

Whiting said infrastructure constraints and related operating delays caused the company to drop its oil production by 3,000 barrels per day to 82,000 barrels per day during its second quarter. It expects the constraints to continue through the rest of the year.

Analyst Leo Mariani at KeyBanc Capital downgraded Whiting to sector weight from overweight, as the company’s results included the three strikes of lower oil production, higher cash costs and weaker pricing.

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

Source: Whiting

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