UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 12, 2017
Whiting Petroleum Corporation
(Exact name of registrant as specified in its charter)
Delaware | 1-31899 | 20-0098515 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1700 Broadway, Suite 2300, Denver, Colorado 80290-2300
(Address of principal executive offices, including ZIP code)
(303) 837-1661
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01. | Other Events. |
Whiting Petroleum Corporation (the Company) is filing as Exhibit 99.1 and incorporating by reference into this Current Report on Form 8-K the Companys unaudited pro forma financial information for the nine months ended September 30, 2017, which gives effect to the Companys disposition of its Fort Berthold Indian Reservation properties, as if it had occurred on January 1, 2016.
Item 9.01. | Financial Statements and Exhibits. |
(a) | Not applicable. |
(b) | Not applicable. |
(c) | Not applicable. |
(d) | Exhibits: The exhibit listed in the Exhibit Index below is filed as part of this report. |
EXHIBIT INDEX
Exhibit No. |
Description | |
(99.1) | Unaudited pro forma financial information of Whiting Petroleum Corporation for the nine months ended September 30, 2017. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
WHITING PETROLEUM CORPORATION | ||||||
Date: December 12, 2017 | By: | /s/ Michael J. Stevens | ||||
Michael J. Stevens | ||||||
Senior Vice President and Chief Financial Officer |
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Exhibit 99.1
WHITING PETROLEUM CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information is derived from the historical consolidated financial statements of Whiting Petroleum Corporation (Whiting or the Company) and has been adjusted to reflect the sale of the Companys interests in certain oil and gas producing properties in the Fort Berthold Indian Reservation area located in Dunn and McLean counties of North Dakota as well as certain other related assets and liabilities (the FBIR Properties), effective September 1, 2017, for a cash purchase price of $500 million (before closing adjustments), resulting in a pre-tax loss on sale of $402 million.
The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2017 gives effect to the disposition of the FBIR Properties as if it had occurred on January 1, 2016.
Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma consolidated financial statement. In Whitings opinion, all adjustments that are necessary to present fairly the pro forma information have been made.
The unaudited pro forma consolidated statement does not purport to represent what Whitings results of operations would have been had the disposition of the FBIR Properties actually occurred on the date indicated above, nor is it indicative of future results of operations. This unaudited pro forma consolidated financial statement should be read in conjunction with Whitings historical consolidated financial statements and related notes for the period presented.
WHITING PETROLEUM CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017
(in thousands, except per share data)
Whiting Historical |
Pro Forma Adjustments (Note 2) |
Whiting Pro Forma |
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OPERATING REVENUES |
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Oil, NGL and natural gas sales |
$ | 1,007,023 | $ | (81,796 | )(a) | $ | 925,227 | |||||
OPERATING EXPENSES |
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Lease operating expenses |
267,277 | (22,203 | )(a) | 245,074 | ||||||||
Production taxes |
86,621 | (7,635 | )(a) | 78,986 | ||||||||
Depreciation, depletion and amortization |
673,288 | (48,001 | )(b) | 625,287 | ||||||||
Exploration and impairment |
63,793 | (17,406 | )(c) | 46,387 | ||||||||
General and administrative |
92,644 | | 92,644 | |||||||||
Derivative loss, net |
47,281 | | 47,281 | |||||||||
Loss on sale of properties |
401,050 | (401,788 | )(d) | (738 | ) | |||||||
Amortization of deferred gain on sale |
(9,757 | ) | | (9,757 | ) | |||||||
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Total operating expenses |
1,622,197 | (497,033 | ) | 1,125,164 | ||||||||
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LOSS FROM OPERATIONS |
(615,174 | ) | 415,237 | (199,937 | ) | |||||||
OTHER INCOME (EXPENSE) |
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Interest expense |
(143,641 | ) | 9,357 | (e) | (134,284 | ) | ||||||
Loss on extinguishment of debt |
(1,540 | ) | | (1,540 | ) | |||||||
Interest income and other |
970 | | 970 | |||||||||
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Total other expense |
(144,211 | ) | 9,357 | (134,854 | ) | |||||||
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LOSS BEFORE INCOME TAXES |
(759,385 | ) | 424,594 | (334,791 | ) | |||||||
INCOME TAX BENEFIT |
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Current |
(6,367 | ) | | (6,367 | ) | |||||||
Deferred |
(313,634 | ) | 160,503 | (f) | (153,131 | ) | ||||||
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Total income tax benefit |
(320,001 | ) | 160,503 | (159,498 | ) | |||||||
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NET LOSS |
(439,384 | ) | 264,091 | (175,293 | ) | |||||||
Net loss attributable to noncontrolling interest |
14 | | 14 | |||||||||
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NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ | (439,370 | ) | $ | 264,091 | $ | (175,279 | ) | ||||
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LOSS PER COMMON SHARE(1) |
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Basic |
$ | (4.85 | ) | $ | 2.91 | $ | (1.94 | ) | ||||
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Diluted |
$ | (4.85 | ) | $ | 2.91 | $ | (1.94 | ) | ||||
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WEIGHTED AVERAGE SHARES OUTSTANDING(1) |
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Basic |
90,678 | 90,678 | ||||||||||
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Diluted |
90,678 | 90,678 | ||||||||||
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(1) | All share and per share amounts have been retroactively adjusted to reflect the Companys one-for-four reverse stock split on November 8, 2017. |
The accompanying notes are an integral part of this unaudited pro forma consolidated financial statement.
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WHITING PETROLEUM CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Note 1. Basis of Presentation
On September 1, 2017, Whiting Petroleum Corporation (Whiting or the Company) completed the sale to RimRock Oil and Gas Williston, LLC (the Buyer) of Whitings interests in certain oil and gas producing properties in the Fort Berthold Indian Reservation area located in Dunn and McLean counties of North Dakota as well as certain other related assets and liabilities (the FBIR Properties), effective September 1, 2017, for a cash purchase price of $500 million (before closing adjustments). The Company used the net proceeds from the sale to repay a portion of the debt outstanding under its credit agreement.
The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2017 gives effect to the disposition of the FBIR Properties as if it had occurred on January 1, 2016.
The unaudited pro forma consolidated financial statement reflects pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable, however, actual results may differ from those reflected in this statement. In Whitings opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The unaudited pro forma consolidated statement does not purport to represent what Whitings results of operations would have been had the disposition of the FBIR Properties actually occurred on the date indicated above, nor is it indicative of future results of operations. This unaudited pro forma consolidated financial statement should be read in conjunction with the Companys consolidated historical financial statements and related notes for the period presented.
Earnings/Loss Per ShareBasic earnings/loss per common share is calculated by dividing net income/loss attributable to common shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings/loss per common share is calculated by dividing adjusted net income/loss attributable to common shareholders by the weighted average number of diluted common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for the diluted earnings per share calculations consist of unvested restricted stock awards, outstanding stock options and contingently issuable shares of convertible debt to be settled in cash, all using the treasury stock method. When a loss from continuing operations exists, all dilutive and potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share.
Note 2. Adjustments to the Unaudited Pro Forma Consolidated Statement of Operations
The following adjustments have been made to the accompanying unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2017:
(a) | Reflects the elimination of revenues and operating expenses of the FBIR Properties. |
(b) | Reflects the elimination of depletion, depreciation and amortization expense related to the FBIR Properties. |
(c) | Reflects the elimination of impairment expense recognized during the nine months ended September 30, 2017 related to i) leasehold amortization associated with unproved FBIR Properties and ii) write-downs of undeveloped acreage costs where Whiting had no future plans to drill. |
(d) | Reflects the elimination of the loss on sale of the FBIR Properties as this non-recurring item is directly attributable to the sale and is not expected to have a continuing impact. |
(e) | Reflects the reduction to interest expense associated with the repayment of $500 million in debt outstanding under Whitings credit agreement with the proceeds from the sale of the FBIR Properties. |
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(f) | Reflects the income tax effects of the pro forma adjustments presented, based on Whitings combined statutory tax rate of 37.8% that was in effect during the period for which the pro forma consolidated statement of operations has been presented. |
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