Whiting Petroleum Corporation engages in the acquisition, exploration, development, and production of crude oil, natural gas liquids, and natural gas primarily in the Rocky Mountains region of the United States.
The last earnings update was 44 days ago.
Discounted Cash Flow Calculation for DB:WHT1 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:WHT1 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Whiting Petroleum's share price is below the future cash flow value, and at a moderate discount (> 20%).
Whiting Petroleum's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Whiting Petroleum's earnings available for a low price, and how does
this compare to other companies in the same industry?
Whiting Petroleum's earnings are expected to grow significantly at over 20% yearly.
Whiting Petroleum's revenue is expected to grow by 2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Whiting Petroleum's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
Oil and Gas
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Whiting Petroleum's finances.
The net worth of a company is the difference between its assets and liabilities.
Whiting Petroleum's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Whiting Petroleum's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Whiting Petroleum's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.1x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Bradley J. Holly, also known as Brad, has been President and Chief Executive Officer of Whiting Petroleum Corporation since November 1, 2017. Mr. Holly served as an Executive Vice President of U.S. Onshore Exploration & Production at Anadarko Petroleum Corporation since May 10, 2017 until October 4, 2017. Mr. Holly served as Senior Vice President of U.S. Onshore Exploration and Production at Anadarko Petroleum Corporation from August 2016 to May 10, 2017. He served as Senior Vice President of Operations - Rockies at Anadarko Petroleum Corporation since November 2014 until August 2016. He was previously Senior Vice President, Operations for Anadarko'sRocky Mountain Region from May 2013 to September 2016 and Vice President, Operations for the Southern & Appalachia Region from July 2012 to May 2013. Mr. Holly joined Anadarko in 1997 and has held positions of increasing responsibility in onshore and offshore engineering and management. He served as General Manager of Greater Natural Buttes and General Manager of Maverick Basin. Prior to that, he served as Reserves and Planning Manager for the Southern and Appalachia Region and was a Reservoir Engineer & Development Supervisor on Anadarko's Marco Polo and K2 developments in the deepwater GOM. Mr. Holly has more than 23 years of experience in oil and natural gas exploration and production, having begun his career with Amoco in 1994. He has been Director of Whiting Petroleum Corporation since November 1, 2017 and also its Chairman of the Board since May 01, 2018. He serves on the Industry Advisory Board for the Texas Tech Petroleum Engineering Department and also is a member of the Society of Petroleum Engineers. Mr. Holly returns to Denver where he served as the past Chairman of the Colorado Oil and Gas Association (COGA) in 2016 and is a member of the inaugural class of the Colorado Governor's Fellows Program. Mr. Holly served on Governor Hickenlooper's task force on oil and gas in 2014-2015 and was the chairman of Protect Colorado in 2016. He has served as a trustee of the Mile High United Way for the past three years. Mr. Holly holds a Bachelor of Science in Petroleum Engineering from Texas Tech University and he is a graduate of the Harvard Business School Advanced Management Program.
Brad's compensation has increased in line with Whiting Petroleum recently becoming profitable.
Brad's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Whiting Petroleum management team is about average.
Senior VP & CFO
Senior Vice President of Planning & Reservoir Engineering
Chief Operating Officer
Senior Vice President of Investor Relations
Chief Corporate Development & Strategy Officer
Vice President of Marketing
Vice President of Human Resources
Senior Vice President Operations
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Whiting Petroleum board of directors is about average.
Whiting Petroleum Corporation engages in the acquisition, exploration, development, and production of crude oil, natural gas liquids, and natural gas primarily in the Rocky Mountains region of the United States. The company sells its oil and gas production to end users, marketers, and other purchasers. As of December 31, 2018, it had interests in 2,097 net productive wells on approximately 539,300 net developed acres, as well as total estimated proved reserves of 520.1 million barrels of oil equivalent. The company was founded in 1980 and is headquartered in Denver, Colorado.
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