Energy Prospectus

Whiting Petroleum Corporation’s (WLL - News) production in the first quarter of 2012 totaled a record 7.348 million barrels of oil equivalent (MMBOE), of which 85% were crude oil/natural gas liquids. This first quarter 2012 production total is a new record daily average production rate of 80,747 barrels of oil equivalent (BOE). The first quarter average daily production rate of 80,747 BOE represented a 22% increase over the first quarter 2011 average daily rate and a 14% increase over the 70,685 BOE per day in the fourth quarter of 2011.

Despite the conveyance of approximately 4,500 BOE per day of production from Whiting Petroleum Corporation to Whiting USA Trust II (“Trust II”), we are raising our production guidance for 2012. For 2012, we project a range of 29.0 MMBOE to 30.2 MMBOE or 79,235 BOE per day to 82,515 BOE per day, which equates to a 17% to 22% increase over the 24.8 MMBOE produced in 2011. This compares to our prior guidance of 28.30 MMBOE to 29.70 MMBOE or 77,300 BOE per day to 81,100 BOE per day, which included Trust II volumes. We believe that strong drilling results and the solid performance of our two EOR projects will offset the production conveyed to Trust II.

WLL is one of my Top Takeover Targets. - Dan

Whiting has several very good oil projects. I really like their Permian Basin and Niobrara assets, in addition to one of the highest quality positions in the Williston Basin.

James J. Volker, Whiting’s Chairman and CEO, commented, “We are off to a great start in 2012 with our first quarter production up 14% over the fourth quarter of 2011 as we transition into development mode in the western Williston Basin areas of Pronghorn, Lewis & Clark, Hidden Bench and Tarpon. We are also gaining momentum in our emerging plays. This is evidenced by recent drilling results at our Big Tex and Redtail prospects. At our Big Tex prospect in the Delaware Basin of Texas, our first horizontal well in the Wolfcamp formation, the Big Tex North 301H, recently tested at a 24-hour initial production rate of 440 BOE per day and continues to produce at a rate of over 400 BOE per day. We also completed a vertical Wolfcamp test that produced at an initial rate of 232 BOE per day. At our Redtail prospect in the Denver Julesburg Basin of Colorado, we completed two horizontal Niobrara wells, the Wildhorse 16-42H and the Wolf 35-2623H, that had initial production rates of 430 BOE per day and 426 BOE per day. The science that we did in these areas in 2011 is paying off in 2012.”

Mr. Volker added, “We plan to step up our drilling activity at Big Tex and Redtail as well as the Bakken and Three Forks in the Williston Basin of North Dakota and Montana. In the Williston Basin, we currently plan to increase to a total of 24 rigs by September 2012.”

Whitting is now trading at 4.25X my CFPS estimate for 2012, which is not that far over the First Call CFPS forecast. Also, First Call has not increased their forecasts since the company raised its production guidance.

That is crazy for a company of this quality. It is a SCREAMING BUY at the current price.

WLL is HEAVILY WEIGHTED TO OIL. It is one of the top producers in the Bakken and may have the highest quality acreage up there. Read our profile and take a hard look at my updated forecast model, which I just posted.

I am raising my Fair Value estimate to $85/share.