DENVER, Dec. 22 /PRNewswire-FirstCall/ -- Whiting Petroleum Corporation (NYSE: WLL) announced today that it has closed on its second acquisition of additional royalty and overriding royalty interests in the Company's North Ward Estes field and various other fields in the Permian Basin. Also included in the transaction were contractual rights, including an option to participate for a 5.0% working interest and right to back in after payout for an additional 7.5% working interest in the development of deeper pays on acreage under and adjoining the North Ward Estes field. The purchase price was $27.4 million with an effective date of November 1, 2009. Over 90% of the purchase price was allocated to the royalty and overriding royalty interests in the North Ward Estes field, located in Ward and Winkler Counties, Texas. The seller was a private owner.

Net production attributable to the producing royalty and overriding royalty interests is estimated at 230 barrels of oil equivalent (BOE) per day in September 2009. Whiting estimates proved reserves attributable to the acquired interests are 1.6 million BOE for an acquisition price of $17.13 per BOE. Reserves attributable to royalty and overriding royalty interests are not burdened by operating expenses or any additional capital costs, including CO2 costs, which are paid by the working interest owners. Whiting estimates that the non-cost bearing nature of these interests makes them worth approximately 33% more than working interest barrels. Therefore, an equivalent working interest barrel would have had a price per BOE of approximately $11.48.

In aggregate, the two royalty and overriding royalty interest acquisitions in the North Ward Estes field represent 3.8 MMBOE of proved reserves at an acquisition price of $66.1 million, or $17.39 per BOE. An equivalent working interest barrel would have had a price per BOE of approximately $11.65. Net production attributable to the two acquisitions was approximately 500 BOE per day in September 2009. With the acquisition of the contractual rights, Whiting extinguished the seller's option to participate for a 10.0% working interest and right to back in after payout for an additional 15.0% working interest in the development of deeper pays on acreage under and adjoining the North Ward Estes field. Whiting will now have a larger working and net revenue interest in this acreage.

James J. Volker, Whiting's President and CEO, commented, "We are pleased to announce this second acquisition of additional interests in our North Ward Estes field, which continues to respond favorably to our expanding CO2 injection project. We expect the additional revenue interest to reduce our operating expenses and enhance the profitability on a unit of production basis."

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that acquires, exploits, develops and explores for crude oil, natural gas and natural gas liquids primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and Michigan regions of the United States. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

Forward-Looking Statements

This news release contains statements that we believe to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as we "expect," "intend," "plan," "estimate," "anticipate," "believe" or "should" or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.

These risks and uncertainties include, but are not limited to: declines in oil or natural gas prices; our level of success in development and production activities; the timing of our exploration and development expenditures, including our ability to obtain CO2; inaccuracies of our reserve estimates or our assumptions underlying them; revisions to reserve estimates as a result of changes in commodity prices; unforeseen underperformance of or liabilities associated with acquired properties; failure of our properties to yield oil or gas in commercially viable quantities; and other risks described under the caption "Risk Factors" in our Quarterly Report on Form 10-Q for the period ended June 30, 2009. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.

SOURCE Whiting Petroleum Corporation

Back to top

RELATED LINKS
http://www.whiting.com