Energy Prospectus

I think WLL has a lot of upside for us. Despite significant weather issues, they reported production for the first quarter that was just below my forecast volumes. Net income beat my forecast.

BUT that is not important. This is why I am very bullish on WLL. They are now completing horizontal well in the Bakken with much higher and sustainable rates. Read this carefully.

Williston Basin Development

In the first quarter of 2014, production from the Williston Basin averaged a record 73,325 BOE/d, an increase of 27% over the 57,785 BOE/d in the first quarter of 2013. The Williston Basin represented 73% of Whiting's total first quarter production.

Missouri Breaks Field. We hold 99,930 gross (65,869 net) acres in the Missouri Breaks field, located in Richland County, Montana and McKenzie County, North Dakota. At our Skov 31-28 Unit at Missouri Breaks, we drilled three new Bakken wells in order to compare different completion designs. These wells used 3.0 to 4.0 million pounds of frac sand versus approximately 2.0 million pounds in wells completed using our prior method. [BTW this is VERY GOOD NEWS for our EMES and HCLP frac sand companies.]

The original well in the unit, the Skov 31-28-1H, was completed using sliding sleeve technology on May 31, 2013 and flowed 927 BOE/d. On April 2, 2014, we completed two new wells in the unit using our new cemented liner method with an increased number of entry points. These wells, the Skov 31-28-2H and the Skov 31-28-4H, flowed at 1,072 BOE/d and 1,219 BOE/d, respectively. On April 1, 2014, we completed the Skov 31-28-3H with a new coiled tubing fracture stimulation method. This well flowed at 1,607 BOE/d, 73% higher than the initial well in the unit and 40% higher than the average of the two cemented liner wells. This new completion design better isolates the perforations to more effectively fracture the reservoir with fewer entry points.

I have been hearing a lot about the new completion methods developed by HAL. They are now able to isolate zones of different pressure in the horizontal section and get much better fracs per foot. This is a really big deal for the Bakken and Eagle Ford companies. Note that they are also getting better results using a lot more frac sand per completion. - Dan

Redtail is also becoming another Core Area of great potential for WLL:

Denver Basin: Redtail Niobrara Field. We hold a total of 174,892 gross (122,656 net) acres in our Redtail prospect, located in the Denver Julesberg Basin in Weld County, Colorado. Our Redtail acreage currently produces from both the Niobrara "B" and "A" zones and is also prospective in the Niobrara "C" zone as well as the Codell formation. We estimate that we have more than 3,300 gross locations to drill at Redtail based on a 16-well per DSU pattern in the "B" and "A" zones alone.

Production from our Redtail field averaged 4,550 BOE/d in the first quarter of 2014, representing a sequential increase of 41% over the fourth quarter of 2013.

Highlighting recent activity at our Redtail field was the initiation of gas sales from our Redtail gas plant. The plant has initial inlet capacity of 20 MMcf/d, which will be expanded to 70 MMcf/d in the first quarter of 2015. Gas sales are underway at a current gross inlet rate of over 8 MMcf/d.

Drilling to date is on a 16-well per 960-acre DSU pattern in the "B" and "A" zones and we expect our rate of completions to rise in the second quarter of 2014. We plan to spud our 30F super pad located in the Horsetail township in May 2014. This high density pilot will test a 32-well per DSU pattern in the "A", "B" and "C" zones. If successful, our potential drilling locations at Redtail would increase to more than 6,600 gross wells.

We currently have three pad-capable drilling rigs running at Redtail, and we plan to add a fourth rig in the second half of 2014. This rig will initially drill in the northern portion of our acreage where we plan to test the Niobrara "A" zone and the Codell formation.

Whiting Petroleum (WLL): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

My Fair Value Estimate increase $4/share to $121/share. First Call's Price Target is $82.85.

Whiting's production was 100,065 boepd for the first quarter. They are on-track to exit this year at over 125,000 boepd. Production will be up around 7,500 boepd from Q1 to Q2 then take off during the second half of this year after Spring Break-Up in North Dakota.

anybody see any reason for wll to be down so much on high volume after a good report--even beat eps est by 9c.

Everything on the board today was red. Nothing is wrong with WLL. They had a great quarter.