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Whiting Petroleum Files for Bankruptcy

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   |    Wednesday,April 01,2020

Whiting Petroleum Corp. has filed for bankruptcy one week after drawing down $650 million from its credit facility.  The deal is a pre-packaged filing, reached with noteholders.   

In the days prior to filing for bankruptcy, Whiting awarded its top executives cash bonuses amounting to $15 million.

The company said it had $585 million in cash on the balance sheet from the draw down that will be used to meet its financial obligations. The company said it has reached an agreement with certain noteholders to exchange $2.2 billion for 97% of the new entity.

As of 4Q 2019 the company produced 126 mboe/d (65% oil) which is down year over year (-10% and 4% respectively)

Activity Planned for 2020:

• 2020 Capex: $418 million (down from $820 initially planned)

• Rigs: As of Q1 2020, the company had 3 rigs running in the Bakken and 2 completions crews.  The company plan to drop to 1 rig and 1 completion crew for the remainder of the year.

Bradley J. Holly, the Company's Chairman, President and CEO, commented, "In 2019, we took proactive steps to reduce our cost structure and improve our cash flow profile. We continue to build on these actions in 2020. The Company has also explored a wide variety of alternatives to address our balance sheet and looming note maturities in a highly capital constrained market environment.

"Given the severe downturn in oil and gas prices driven by uncertainty around the duration of the Saudi / Russia oil price war and the COVID-19 pandemic, the Company's Board of Directors came to the conclusion that the principal terms of the financial restructuring negotiated with our creditors provides the best path forward for the Company. We are pleased to have secured a highly constructive restructuring framework with a critical mass of our noteholders. Through the terms of the proposed restructuring, we believe a right-sized balance sheet will enable us to capitalize on our enhanced cost structure, high-quality asset base and successfully compete in the current environment.

"I want to express my gratitude to the employees for their continued dedication and hard work, and to our service providers and business partners for their ongoing support during this time. Following the restructuring process, we look forward to having substantially less debt and a significantly improved outlook for our Company and its stakeholders."

Financial Details

Advisors

Moelis & Company is acting as financial advisor for the Company, Kirkland & Ellis is acting as legal advisor, Alvarez & Marsal is acting as restructuring advisor and Jeffrey S. Stein of Stein Advisors LLC is the Company's Chief Restructuring Officer.

PJT Partners is acting as financial advisor for the Consenting Noteholders and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor.