U.S. oil producer Whiting Petroleum Corp. forecast a wider-than-expected fall in quarterly production on Feb. 27 as its drilling operations were hit by severe bad weather, sending its shares tumbling 42% to a record low.
Shares of the company have lost nearly 75% of their value this year amid weak oil prices and rising investor concerns over the company's ability to meet its debt maturities.
In a conference call to discuss the company's fourth-quarter results, analysts pushed Whiting executives to offer clarity on the company's plans to refinance its debt that matures in 2021.
But the executives side-stepped the questions, saying they had hired advisers to explore all alternatives and that they would not elaborate further.
"Given the current commodity price and the current state of the capital markets, we felt it was best to retain advisers," CFO Correne Loeffler said.
"We've seen that the A&D market has been extremely challenged. We will continue to look at alternatives as they come available."
The company also flagged pump failures due to bad weather on multiple high-value wells and forecast production of 108,000 to 110,500 barrels of oil equivalent per day (boe/d) in the first quarter, below analysts' estimates of 121,570 boe/d.
Whiting is a Denver-based independent oil and gas company with operations in the Rocky Mountain region of the U.S. The company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Montana and the Niobrara play in northeast Colorado.
For the fourth quarter, Whiting posted a net loss of $147.5 million, compared with a profit of $204 million last year as costs jumped 87%, while natural gas prices dropped.
"Given the company's leverage and the current situation in the oil markets, it would have taken a heroic release for Whiting to outperform today," J.P. Morgan analysts said in a note to clients.
Denver-based Whiting forecast 2020 capital spending of $585 million to $620 million, well below $778 million it spent in 2019.
Last week, other shale players Concho Resources Inc. and Devon Energy Corp. cut their spending plans for the year and hiked dividends, bowing to investor demand for returns.
Whiting's realized price for natural gas averaged about 84.4% lower last year.
Quarterly production of 11.31 million barrels of oil equivalent was marginally ahead of estimates of 11.23 million barrels of oil equivalent and revenue of $380.6 million also beat estimates of $371.4 million.
Excluding items, it recorded a loss of 22 cents per share, smaller than analysts' expectations of a loss of 41 cents.
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