Whiting Petroleum To Stop Fracking As Budget Slashed
Feb 24 (Reuters) - Whiting Petroleum Corp, North Dakota's largest oil producer, slashed its 2016 budget by 80 percent on Wednesday, saying it will suspend all fracking operations and reduce output to wait for higher crude prices.
Shares jumped 7.7 percent to $4 per share in after-hours trading as investors cheered the decision to preserve capital. Whiting's cut marks one of the largest so far this year in an energy industry crippled by oil prices at 10-year lows.
Denver-based Whiting said it will stop fracking and completing wells as of April 1. Most of the $500 million budget will be spent to mothball drilling and fracking operations in the first half of the year. After June, Whiting said it plans to spend only $160 million, mostly on maintenance.
Rival producers Hess Corp and Continental Resources Inc have also slashed their budgets for the year, though neither has cut as much as Whiting.
"We believe this conservative strategy should help us to maintain our liquidity position and leave us well positioned to capitalize on a rebound in oil prices," Whiting Chief Executive Jim Volker said in a statement.
Whiting also on Wednesday posted a net loss of $98.7 million, or 48 cents per share, compared with a net loss of $353.7, or $2.68 per share in the year-ago period.
Excluding impairment charges, hedging gains and other one-time items, the company posted a loss of 43 cents per share.
By that measure, analysts expected a loss of 30 cents per share, according to Thomson Reuters I/B/E/S.
The year-ago quarter included impairment charges to write down the value of acreage throughout the United States.
Production rose about 18 percent to 155,210 barrels of oil equivalent per day (boe/d), the company said.
For the year, Whiting expects to pump 128,000 to 138,000 boe/d.
Whiting plans to hold a conference call with investors to discuss the results and budget on Thursday.
(Reporting by Ernest Scheyder; Editing by Jonathan Oatis and David Gregorio)
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