Overview: A guide to the Whiting-Kodiak transaction (Part 6 of 9)
Whiting versus its peers
Prior to the acquisition, Whiting (WLL) had 683,804 net acres. It was the second largest acreage holder in the Bakken. Continental Resources (CLR) was the largest with 1.2 million net acres.
WLL’s closest peers in the Bakken include Hess Corp. (HES), ConocoPhillips (or COP) and EOG Resources (or EOG). For context, HES holds ~640,000 net acres in the Bakken, COP holds over 625,000 net acres, and EOG owns ~600,000.
It’s important to note that all of these companies are components of the Energy Select Sector SPDR ETF (XLE).
What has WLL been doing differently?
What sets WLL apart from its peers is how it has been capitalizing on its acreage positions with advanced fracking technology. This has resulted in incremental oil production at lower well costs.
Particularly, the “plug and perf” technology, along with cemented liners, has helped WLL achieve better well completion results and increase its productivity.
CEO James Volker said of this new technology that “Whiting has achieved improved results at its Missouri Breaks, Pronghorn, and Hidden Bench areas using its new completion design—seeing productivity increases greater than 50% across the three areas.”
Also, the company, in its 2014 outlook stated that “The wells completed using our new completion design had average initial production rates that were 53% better than the wells completed with our previous completion design.”
Based on these positive results, Whiting plans to use the technology for its 2014 production ramp-up.
In the next section in this series, we’ll discuss what set KOG apart from its peers. We’ll also look at how KOG contributes to the combined company.
Browse this series on Market Realist:
- Part 1 - Must-know: Details of Whiting’s Kodiak acquisition
- Part 2 - Why Whiting is set to become the largest Bakken producer
- Part 3 - Why Bakken growth fuels corporate wedding
- Investment & Company Information
- EOG Resources