Platts North American Crude Marketing Conference February 28, 2013

Transcription

1 Platts North American Crude Marketing Conference February 28, 2013

2 Forward Looking Statements, Non-GAAP Measures, Reserve and Resource Information This presentation includes forward-looking statements that the Company believes to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of All statements other than statements of historical fact included in this presentation are forwardlooking statements. These forward looking statements are subject to risks, uncertainties, assumptions and other factors, many of which are beyond the control of the Company. Important factors that could cause actual results to differ materially from those expressed or implied by the forwardlooking statements include the Company s business strategy, financial strategy, oil and natural gas prices, production, reserves and resources, impacts from the global recession and tight credit markets, the impacts of state and federal laws, the impacts of hedging on our results of operations, level of success in exploitation, exploration, development and production activities, uncertainty regarding the Company s future operating results and plans, objectives, expectations and intentions and other factors described in the Company s Annual Report on Form 10-K for the year ended December 31, Whiting s production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases. In this presentation, we refer to Adjusted Net Income and Discretionary Cash Flow, which are non-gaap measures that the Company believes are helpful in evaluating the performance of its business. A reconciliation of Adjusted Net Income and Discretionary Cash Flow to the relevant GAAP measures can be found at the end of the presentation. Whiting uses in this presentation the terms proved, probable and possible reserves. Proved reserves are reserves which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward from known reservoirs under existing economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. Probable reserves are reserves that are less certain to be recovered than proved reserves, but which, together with proved reserves, are as likely as not to be recovered. Possible reserves are reserves that are less certain to be recovered than probable reserves. Estimates of probable and possible reserves which may potentially be recoverable through additional drilling or recovery techniques are by nature more uncertain than estimates of proved reserves and accordingly are subject to substantially greater risk of not actually being realized by the Company. Whiting uses in this presentation the term total resources, which consists of contingent and prospective resources, which SEC rules prohibit in filings of U.S. registrants. Contingent resources are resources that are potentially recoverable but not yet considered mature enough for commercial development due to technological or business hurdles. For contingent resources to move into the reserves category, the key conditions, or contingencies, that prevented commercial development must be clarified and removed. Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development projects prepared. Estimates of resources are by nature more uncertain than reserves and accordingly are subject to substantially greater risk of not actually being realized by the Company. 2

3 Whiting Overview Q Production Proved Reserves (1) 86.1 MBOE/d MMBOE % Oil 80% R/P ratio (2) 13 years Drilling on the Hidden Bench Prospect in McKenzie County, North Dakota. (1) Whiting reserves at December 31, 2012 based on independent engineering. (2) R/P ratio based on year-end 2012 proved reserves and 2012 production. 3

4 Map of Operations ROCKY MOUNTAINS 63.0 MBOE/D MICHIGAN 2.7 MBOE/D Q Net Production 86.1 MBOE/d 9% 2% 3% 13% MID-CONTINENT 8.1 MBOE/D PERMIAN 11.0 MBOE/D 73% GULF COAST 1.3 MBOE/D Rockies Mid-Con Michigan Permian Gulf Coast 4

5 Platform for Continued Growth 80% Oil / 10% NGL / 10% Natural Gas MMBOE Proved Reserves (1) (12/31/2012) 13% 2% 1% 51% 33% Rocky Mountains Permian Basin Mid-Continent Michigan Gulf Coast (1) Whiting reserves at December 31, 2012 based on independent engineering. 5

6 Drilling Inventory Identified Primary Locations Northern Rockies Gross Net Wells per Spacing Unit Southern Williston (Lewis & Clark; Pronghorn) 1, Pronghorn Sand / 1280 Western Williston (1) (Cassandra; Hidden Bench; Tarpon; Missouri Breaks) 1, Middle BKN; 3 Upper TFK / 1280 Sanish (Sanish; Parshall) (2) Middle BKN; 3 Upper TFK / 1280 Other (3) Total 3,126 1,249.1 Central Rockies Redtail Niobrara 2,420 1, Nio "B"; 4 Nio "A" / Other (4) Total 3,378 1,869.8 Gulf Coast Mid-Cont Permian Basin (5) Michigan Total Primary Inventory 7,556 3,623.3 Identified Prospective Locations Williston Basin Williston Basin New Objectives Gross Net Wells per Spacing Unit Missouri Breaks Upper Three Forks Upper TFK / 1280 Hidden Bench Lower Bakken Silt / Higher Density Pilot BKN Silt; 4 Middle BKN per 1280 Cassandra Lower Three Forks Lower TFK per 1280 Tarpon Lower Three Forks Lower TFK per 1280 Total 1, Williston Basin Higher Density Locations Pronghorn Sand Higher Density Add'l Pronghorn Sand / 1280 Sanish Higher Density and Infill Add'l Middle BKN / 1280 Total Williston Basin Total Prospective Locations 1, Permian Basin Big Tex Horizontal Upper Wolfcamp / 640 Total Prospective Inventory 2, Total Potential Locations (6) 9,661 4,503.2 (1) Tarpon primary development on 3 Middle BKN; 2 Upper TKS due to high natural fracturing. Excludes Upper TFK at Missouri Breaks. (2) Cross unit boundary wells at Sanish result in an average of 3.5 wells per spacing unit. Parshall was developed on 640-acre spacing units and there is no Three Forks. (3) Various fields in North Dakota and Montana, including Big Island, Starbuck, Big Stick and others. (4) Various fields in Colorado, Wyoming and Utah including Sulphur Creek, Fontenelle, Nitchie Gulch, Flat Rock and others. (5) Various fields in Texas and New Mexico including Jo-Mill, West Jo-Mill, Garza, Signal Peak and others. (6) Locations include both 3P reserves and Resource Potential. 6

7 Capital Budget for Key Development Areas in 2013 ($ in millions) Exploration Expense (2) 82 MM Land 108 MM Non-Operated 164 MM Facilities 178 MM Central Rockies 136 MM EOR 240 MM Well Work, Misc. Costs, Other 150 MM Northern Rockies 1,142 MM EST CAPEX IN MM % Gross Wells Net Wells Northern Rockies $1,142 52% EOR % NA (1) NA (1) Central Rockies 136 6% Non-Operated 164 7% Land 108 5% Exploration Expense (2) 82 4% Facilities 178 8% Well Work, Misc. Costs, Other 150 7% Total Budget $2, % (1) These multi-year CO 2 projects involve many re-entries, workovers and conversions. Therefore, they are budgeted on a project basis not a well basis. (2) Comprised of exploration salaries, seismic activities, delay rentals and exploratory drilling. 7

8 Whiting Lease Areas In Williston Basin Plays at December 31, 2012 Gross Acres Net Acres Sanish / Parshall 175,529 82,533 - Middle Bakken / Three Forks Objectives Pronghorn 197, ,113 - Pronghorn Sand Objective CASSANDRA Lewis & Clark 201, ,861 - Three Forks Objective Hidden Bench 49,108 28,556 STARBUCK TARPON SANISH & PARSHALL - Middle Bakken / Three Forks Objectives Tarpon 8,125 6,265 - Middle Bakken / Three Forks Objectives MISSOURI BREAKS HIDDEN BENCH Starbuck 104,508 92,227 - Middle Bakken / Three Forks Objectives Missouri Breaks 95,928 66,095 - Middle Bakken / Three Forks Objectives Cassandra 30,347 13,816 - Middle Bakken / Three Forks Objectives Big Island 172, ,389 LEWIS & CLARK - Multiple Objectives Other ND & Montana 74,820 28,813 1,109, ,668 (1) BIG ISLAND Pronghorn (1) As of 12/31/2012, Whiting s total acreage cost in 703,668 net acres is approximately $367 million, or $521 per net acre. 8

9 Williston Basin Production Profile Range of Reserves: Bakken / Pronghorn Sand / Three Forks (1)(2) 1,000 EUR MBOE, Development Phase CAPEX $7.5 MM Nymex oil price/bbl $80 $90 $100 ROI IRR (%) 93% 135% 189% Payout (Yrs.) PV(10) $MM Equivalent Daily Production BOE/D 100 EUR 400 MBOE EUR 600 MBOE EUR MBOE, Development Phase CAPEX $7.5 MM Nymex oil price/bbl $80 $90 $100 ROI IRR (%) 28% 41% 59% Payout (Yrs.) PV(10) $MM Months on Production (1) Please refer to the beginning of this presentation for disclosures regarding "Reserve and Resource Information." All volumes shown are un-risked. Our pre-tax PV10% values do not purport to present the fair value of our oil and natural gas reserves. 9 (2) EURs, ROIs, IRRs and PV10% values will vary well to well. Estimates updated as of December 31, 2012.

10 Significant Productivity Increase Year-over-Year 700 Average Rate All Whiting Bakken / Three Forks / Pronghorn Sand Wells Drilled in the Williston Basin 2011 and Day 60 Day 90 Day 2011 Average 2012 Average 10

11 2012 Productivity Increasing as Drilling Shifts to New Development Areas Average 30, 60, 90 Day Rates Sanish Bakken and Three Forks vs. Pronghorn, Lewis & Clark and Hidden Bench Day 60 Day 90 Day Sanish Bakken and Three Forks Pronghorn, Lewis & Clark and Hidden Bench 11

12 Williston Basin Supply Comments Current Williston Basin Production and Rig Counts (1) Production: ND 768,000 BPD, MT 76,500 BPD Drilling Rigs: ND 183, MT 13 Increasing Utilization of Pad Drilling Continued Drilling Efficiency Gains Operators Investigating Higher Density Drilling in Bakken up to 6-8 wells per spacing unit Increasing Development of Three Forks Some Operators Evaluating Developing Multiple Three Forks Intervals (1) Public production data from North Dakota Industrial Commission and, Montana Board of Oil & Gas Conservation. ND rigs from NDIC Website as of 2/25/13. MT rigs from Baker Hughes North America Rotary Rig Counts 2/22/13. 12

13 Historical Williston Basin Production (1) Oil Production (Bbl/d) 900, , , ,000 Barrels of Oil per day 500, , , Rig Count Avg Daily Oil Rig Count 200, ,000 0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 0 (1) Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning. Based on internal estimates using public production data from North Dakota Industrial Commission and, Montana Board of Oil & Gas Conservation. Rig counts from Baker Hughes. 13

14 Williston Basin Supply Services Services Two better winters after a brutal Generally, service availability catching up with demand pressure pumping, service units, etc. Assisted by slight decline in drilling rigs. Labor market still tight with significant out of state rotation. 14

15 Williston Basin Oil Transportation (BOPD) Source: The North Dakota Pipeline Authority Presentation Some data based on estimates or assumptions 15

16 Williston Basin Oil Production & Export Capacity (1) (BOPD) (1) Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning. Source: The North Dakota Pipeline Authority Presentation 16

17 Oil Loading Facilities Source: The North Dakota Pipeline Authority Presentation Some data based on estimates or assumptions 17

18 Conclusion Bakken Resource Play First barrel of Bakken oil was produced in 1953 Projected life of a Bakken well years THE BAKKEN IS HERE TO STAY North Dakota is currently the #2 oil producing state Potential for 35,000 45,000 more new wells (1) Currently 4,900 producing Bakken wells (1) North Dakota Industrial Commission Presentation 18