Whiting Petroleum — Debt Investor Presentation (June 2020)
47 slides from Whiting Petroleum's debt investor presentation, Jun 29, 2020
Slide 1: Whiting Petroleum Corporation Management Presentation June 2020
Whiting Petroleum Corporation Management Presentation June 2020 Exhibit 99
Slide 2: Confidential presentation and forward-looking statements
THIS CONFIDENTIAL PRESENTATION CONTAINS MATERIAL NON-PUBLIC INFORMATION CONCERNING WHITING PETROLEUM CORPORATION (“WHITING”) ITS AFFILIATES, OR THEIR RESPECTIVE SECURITIES (COLLECTIVELY, “COMPANY SECURITIES”). BY ACCEPTING THIS CONFIDENTIAL PRESENTATION, YOU AGREE TO USE ANY SUCH INFORMATION (AND TO
Slide 3: Discussion Agenda
Predictable Asset Base Highly Leveraged to a Commodity Price Recovery Proactive Management Premier Operator Business Plan Review Next Steps Discussion Agenda
Slide 4: Whiting Senior Leadership Team Driving This Process
Whiting Senior Leadership Team Driving This Process Brad Holly – Chairman, President and Chief Executive Officer >20 years of experience in the oil and gas industry Prior to Whiting, served at Anadarko in various roles, ultimately as EVP of U.S. Onshore E&P B.S. in Petroleum Engineering from Texas T
Slide 5: Combining Attractive Assets with a Best-In-Class Management Team
Combining Attractive Assets with a Best-In-Class Management Team Predictable Asset Base The Logical Consolidator Highly Leveraged to a Commodity Price Recovery Premier Operator with a Proactive Approach Attractive Assets Best-In-Class Management Large, lower-decline, oily PDP base Mature basin with
Slide 6: Predictable Asset Base
Predictable Asset Base
Slide 7: Low-Risk Core Asset Base
Low-Risk Core Asset Base Key Highlights Stable Oil Base Decline Top 25 Unconventional Horizontal Oil Completions Historical data sourced from Company filings and public data Projected unlevered free cash flow exclusive of one-time items and working capital Reflects 2H’20E projections Breakeven Price
Slide 8: Williston Basin Realizes Superior Parent-Child Interactions
Williston Basin Realizes Superior Parent-Child Interactions Reflects SEC year-end 2018 proved reserves. As of 1/17/2020. As of Q3 2019. Dedication to Sustainable Project Returns The Williston Basin has continued to see sustained well results throughout infill projects counter to the degradation seen
Slide 9: Highly Leveraged to a Commodity Price Recovery
Highly Leveraged to a Commodity Price Recovery
Slide 10: Highly Leveraged to a Commodity Price Recovery
Highly Leveraged to a Commodity Price Recovery Overview Cumulative Free Cash Flow Sensitivity(1) ($ in Millions) Note: Reserves reflect unrisked reserve value at pre-tax PV-10 at 5/26/20 NYMEX strip pricing. Does not include adjustments for hedges, corporate contingency costs, general and administra
Slide 11: Proactive Management
Proactive Management
Slide 12: Key Actions Since 2019
Key Actions Since 2019 Streamlined officers from 18 to 11 in three disciplines: Operations, Finance and Strategy Adjusted four siloed asset teams into two multi-disciplinary teams (Williston and Redtail) focused on broader, coordinated operations Created new Business Development team to develop and
Slide 13: Execution Yielding Tangible Results
Execution Yielding Tangible Results Management Checklist Challenges Status Commentary Improve Free Cash Flow Generation ü Generated $253mm of FCF since Q4 2017 Increase Operational Efficiencies ü 2019 drilling IRR exceeded 30% target at 41% Optimize Well Costs ü 2020 full-year well costs expected to
Slide 14: Continued Outperformance on Capital Allocation and Margins
Continued Outperformance on Capital Allocation and Margins Since current Management’s arrival, decisive action has yielded tangible results, improving Whiting’s position as a best-in-class operator Source: Company filings, Capital IQ Note: Selected Public Companies represent historical oil-weighed S
Slide 15: Driving Toward Top Quartile Operational Cost Structure
Driving Toward Top Quartile Operational Cost Structure Operating Expense ($55-65 million annual savings(1)) Pricing & Usage Reduction: Chemicals Workovers Water gathering/hauling/disposal Contract services & equipment Lower Spend & Insourcing Contract pumpers Professional services Compression rental
Slide 16: Demonstrated Commitment to a Prudent G&A Profile
Demonstrated Commitment to a Prudent G&A Profile Cash G&A ($/Boe) (1) Whiting Median of Selected Public Companies Source: Company filings Note: Selected Public Companies represent historical oil-weighed SMID cap peers including OAS, XOG, SM, QEP, MTDR, CPE, CDEV, PDCE, LPI, WPX, XEC, MGY, PVAC Cash
Slide 17: Values-Driven, Responsible Stewardship
Values-Driven, Responsible Stewardship In 2019, the Company formed a committee to recognize employees who exemplify our values Each quarter, employees nominate colleagues who best represent one of Whiting’s six core values and the committee reviews all nominations and selects a winner for each value
Slide 18: ESG Program – Sustainable Value Creation for Stakeholders
ESG Program – Sustainable Value Creation for Stakeholders Whiting is a Peer Leader in Sustainability Reporting Anchored in a set of 26 key initiatives within governance, environment, health & safety and social/communities Whiting’s Board of Directors created a Sustainability Committee that drives be
Slide 19: Premier Operator
Premier Operator
Slide 20: Continuous Completions Cycle Time Improvement
Continuous Completions Cycle Time Improvement Leading Williston Basin Rig Performance Significant Accomplishments and Milestones 8% faster than the nearest competitor and ~20% faster than the average of the next 10 operators Structural cost savings of ~$260,000 per well ($23 Million total in 2019) C
Slide 21: The Bakken's Premier Operator (cont'd)
2010 – 2012 2013 – 2015 2016 – 2017 2018 2019 The Bakken’s Premier Operator (cont’d) Case Study: Foreman Butte Case Study: Sanish Well Performance and Return Profile Existing Wells New Wells Proppant 415 lbs/ft 635 – 900 lbs/ft Stage Spacing 300’ 220’ – 280’ Fluid 430 gal/ft 630 – 840 gal/ft Cluster
Slide 22: Adding Organic Inventory by Extending the Core
Adding Organic Inventory by Extending the Core Whiting Inventory Initiative Production Results (1) 2.50x uplift 2.36x uplift 1 2 Whiting Resource Optimization Strategy Whiting has led the way in the Williston to push the boundary of economic margin, consistently doubling productivity while, in paral
Slide 23: Case Study: Whiting vs. Company A
Case Study: Whiting vs. Company A Whiting vs. Company A: 2018 & 2019 Average Sanish Wells(1) Asset Considerations Company A has has ~200 remaining Sanish locations Whiting Sanish wells outperform Company A wells in both cost & productivity despite being bounded by parents Whiting could reduce Compan
Slide 24: Business Plan Review
Business Plan Review
Slide 25: Whiting's Business Plan Methodology
Whiting’s Business Plan Methodology Stringent well level economics criteria Target greater than 30% ROR Development programs focused on maximizing Enterprise Value Deliberate capital allocation Focused on corporate level returns Maintaining a focus on spending within cash flow Low-decline, PDP heavy
Slide 26: Production Modulation Assumptions
Production Modulation Assumptions Modulation Plan Overview 2020E Modulation Plan Beginning in May, the Company shut in ~245 wells representing ~5,000 BOPD Business Plan includes optionality for modulation through the end of Aug 2020 Modulation levels based on expected net realized price during that
Slide 27: Production Modulation Assumptions (cont'd)
Oil Production Profile (BOPD) Production Variance (BOPD) (1) Production Modulation Assumptions (cont’d) Reflects modulation from shut-in wells only; excludes deferred completions and workover reductions
Slide 28: Market Fundamentals and Oil Differentials
Market Fundamentals and Oil Differentials Rig count activity down ~75% in N. Dakota and Colorado 12 North Dakota and Colorado Rig Count Bakken Production vs. Takeaway Bakken Differentials 6 Production expected to fall with declining activity 2020 assumption conservative relative to strip and prior y
Slide 29: Overview of Business Plan Assumptions: Commodity Pricing
Commodity Pricing (As of 5/26/2020)(1) Commodity Price Realizations Operating Expenses Cash G&A(2) Overview of Business Plan Assumptions $MM Assumes 5/26/2020 NYMEX strip pricing per Bloomberg Does not include ~$2.5mm of bad debt expense in Q1 2020 $MM $9.75 $10.10 $11.05 $10.92 $11.08 $11.32 Total
Slide 30: Overview of Business Plan Assumptions (cont'd)
Gross Program Overview Total Capex ($MM)(1) Avg. Daily Production Profile (Mboe/d)(2) Overview of Business Plan Assumptions (cont’d) -- -- 0.5 1.0 1.0 1.0 Rigs: 62% 59% 58% 61% 63% 64% % Oil: 29 41 24 Average DUC completion cost of ~$3.3mm Based on provided ARIES database
Slide 31: Business Plan Summary
Includes hedging revenues Exclusive of one-time items and working capital Business Plan Summary Daily Production (Mboe/d) Leverage ($MM) Unhedged EBITDA and Unhedged EBITDA Margin (%) Cumulative Unlevered Free Cash Flow ($MM) (1) (2) % Liquids: 79% 77% 78% 78% 79% 79% $ / Boe: $5.80 $9.47 $9.66 $11.
Slide 32: Unlevered Free Cash Flow Summary
Exclusive of one-time items and working capital Inclusive of one-time items and working capital Unlevered Free Cash Flow(1) Summary
Slide 33: Next Steps
Next Steps
Slide 34: Path Forward to Emergence
Path Forward to Emergence Week of June 15 Noteholder Presentation Exit Financing Term Sheet negotiations Finalize Cash Collateral Order End of July Confirmation hearing Late August / Early September Targeted emergence Note: The Company expects emergence to require at least 10 business days following
Slide 35: Appendix
Appendix
Slide 36: Established Gathering Backbone and Marketing Expertise
Established Gathering Backbone and Marketing Expertise Gathering Highlights Marketing Expertise 85% of oil gathered by pipe (20% on owned pipe) 90% of produced water gathered by 3rd party pipe 60% of maintenance fresh water on 3rd party pipe 95,000 Bwpd disposal capacity in 10 owned SWDs Sanish: str
Slide 37: Hedge Position Summary – As of 5/26/2020
Hedge Position Summary – As of 5/26/2020 Note: Bal 2020 represents May – December 2020 $ /Bbl Bbl / d
Slide 38: Commodity Price Assumptions
NYMEX WTI Strip Pricing ($ / Bbl) Note: Strip pricing case assumes 5/26/20 strip pricing per Bloomberg; NGL pricing based on Mt. Belvieu propane Commodity Price Assumptions
Slide 39: Inventory and Development Plan Summary
Based on positive PV-10 value at 5/26/20 strip pricing per Bloomberg; effective date of 9/1/2020 Assumes $1.75/MCF flat natural gas pricing and $13/BBL flat NGL pricing Assumes $3.00/MCF flat natural gas pricing and $25/BBL flat NGL pricing As scheduled in development plan Inventory and Development
Slide 40: Case Study: Whiting vs. Company B
Case Study: Whiting vs. Company B Company B Parent Well Degradation(2) Company B Down-Spacing History(2) Asset Considerations Company B’s well costs are well above all estimated costs for Whiting development Company B leaves behind over 40 stand-alone wells that will be offset by around 80 - 120 chi
Slide 41: Case Study: Whiting vs. Company C
Case Study: Whiting vs. Company C Whiting Well Performance by Vintage Company C Well Performance by Vintage Asset Considerations Estimated well costs are among the highest in the Williston Basin Despite up-spacing by ~50 ft and increasing average lateral length by 2,000 ft, Company C continues to se
Slide 42: A Deep Bench with Broad Experience
A Deep Bench with Broad Experience Brad Holly – Chairman, President and Chief Executive Officer >20 years of experience in the oil and gas industry Experience across the Eagle Ford and DJ Basin President and CEO of Whiting since Nov 2017, Chairman since May 2018 Brad Marvin – Vice President, Busines
Slide 43: Enterprise Risk Management
Enterprise Risk Management Our enterprise risk management (ERM) program provides a framework that enables the Board of Directors and executive leadership to work together to strengthen the consistency of risk consideration in making business decisions. Whiting utilizes a comprehensive, standardized
Slide 44: Preliminary term sheet for exit financing, J.P. Morgan
Preliminary term sheet for exit financing June 2020 J.P. Morgan
Slide 45: J.P. Morgan disclaimer
This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possib
Slide 46: Proposed Exit RBL Facility
WHITING PETROLEUM Proposed Exit RBL facility Borrower: Whiting Oil & Gas Corporation (the “Company or the “Borrower”)Lead Arranger: JPMorganChase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, National Association, Capital One, National AssociationAdministrative Agent: JPMorgan Chase Bank, N.A
Slide 47: Exit RBL Facility: Other Covenants
WHITING PETROLEUMOther Covenants: Usual and customary for transactions of this type, including but not limited to: Restricted payments and redemption of junior debt: suspended through the first 12 months after closing; thereafter subject tominimum pro forma RBLavailability of 20% of the Borrowing Ba
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