Whiting Petroleum Corporation Common Stock (New)

than one million in the previous quarter, increased primarily due to the better commodity prices and a slight uptick in our oil production quarter over quarter. Our production on a barrels of oil equivalent basis remained relatively flat quarter over quarter, averaging 92.8 thousand BOE per day compared to a third quarter production of 92.1 thousand BOE per day. Oil production for the fourth quarter averaged 52.9 thousand barrels of oil per day, which is up slightly from 51.8 thousand barrels of oil in the third quarter. Oil differentials were considerably higher in the fourth quarter as overall basin production levels remain well within total takeaway capacity. As we move into 2022, our term commitment levels have decreased resulting in more exposure to spot value premiums that we're seeing now. Our natural gas prices benefited in 2021 from a premium at our primary pricing point, the Ventura point, as compared to Henry Hub. And NGL prices continued to be strong in the fourth quarter at an average percentage of WTI oil of around 37%. Just for context, this compares to less than 20% that we were experiencing the same quarter last year. As noted last quarter, the majority of our gathering and processing agreements are structured as fixed fee contracts and therefore receive a more pronounced benefit to our net realized price at current residue gas and NGL benchmark pricing. The company invested capex of about 66 million during the fourth quarter to bring 16 gross, 12 net wells onto production. And we drilled 17 gross, 10.4 net operated wells. We ended the quarter with 34 gross, 20.2 net drilled and uncompleted wells. And we currently have two rigs running and one completion crew. Both of those drilling rigs are in the Saanich field. and our completion crews working in the Cassandra area. Lease operating expense was $62 million or $731 per BOE for the fourth quarter of 21. Note that LOE continues to be impacted by expensed workovers that we've talked about previously. Our cash G&A expenses were $12 million for the fourth quarter and for the year total about $39 million averaging right around $1.16 per BOE for 2021. We also disclosed our year-end approved reserves in our 10K in our press release last night. We did see a dramatic increase year-over-year with the estimated total approved reserves totaling 326 million BOEs with a pre-tax PV10 value of $4.4 billion. at year end compared to 260 million BOE and 1.2 billion at the year end 2020. Pricing under SEC rules increased by approximately $27 per barrel to 66.56 per barrel at December 31st, 2021 compared to December 31st, 2020. Gas increased increased to $3.60 per MMBTUs compared to $1.99 for the same two periods. Obviously, these price changes were the biggest factor in the year-over-year changes, but we also added 20.3 million BOE through the drill bit and 16 million BOE with acquisitions, which more than offset the decrease from selling our Colorado assets. Lastly, I'll point out that our approved developed properties accounted for roughly 80% of our total approved reserves with approximately $3.6 billion in value. It's worth noting that this value is at SEC pricing of around $67 per barrel of oil as compared to spot prices today. With that, I'll turn this back over to Lynn and talk a little bit about where we're headed in 2022.

Thanks, Jimmy. There were a lot of numbers there, so I appreciate that. Again, thanks to our entire team for the great efforts during the year. Divesting of our Colorado properties combined with adding meaningful inventory through our acquisition work will pay great dividends in future years. And we should really start to see the benefits accruing at the end of 2022 and moving into 2023 with our development plan. The board and management understands the importance of returning capital to shareholders. We have had much engagement throughout the last year by our board, and we are excited to lay out our plans as we go through the year. As such, the board approved a quarterly dividend of 25 cents per share that will be paid beginning in March, which was only the first step of our capital return program. Our board wants to be very thoughtful and measured in developing a plan. To that end, we have had multiple discussions of stock buybacks and fixed and variable dividends. and I am completely comfortable in saying our board of directors is going in this direction, and we would expect to lay out additional information that would place the company in the fairway of what we are seeing from return of capital from our peers. When we look out over the next four years and consider a $70 price environment for WTI crude, we see our company generating pre-cash flow in an amount approximately the same as our current market cap. I know we live in a world of instant gratification, but again, I will state that our Board of Directors is aligned with our shareholders and we will methodically develop and return a capital plan that should please our shareholders. I now want to shift and outline how we thought about our 2022 capital plan and production profile. Looking ahead, we will have a slightly higher activity level. We will have larger working interest in the wells drilled and completed in our standage field due to the acquisitions. We anticipate an increased level of non-operated activity, and we have built in inflationary factors that we are currently experiencing and anticipate throughout the year. Our supply chain team has done a great job of locking in many of the big ticket items for the first half of 2022. However, we are less protected in the back half of the year. We estimate the inflationary pressure to the program to be in the low double-digit percentages, but the high end of our guidance has contingency for higher inflation should that become an issue. Turning to our production profile, we have shifted some production from the first half of the year and into the second half due to the drilling and completion activities on a five-well pad mentioned in our previous release. We had to rig down on the pad in January and we'll be moving back in in March. This delay, combined with our current activity in the Standish Field, creates somewhat of a hockey stick, moderating our overall 22 production, but creating impressive growth as we exit the year and move into 23, which should benefit with a sharp increase in production. In February, we announced the acquisition of non-operated assets in our Standish Fields. We negotiated these transactions in the fall of 21 in a lower price environment, and we believe they add significant shareholder value. We have been able to hedge production from these acquisitions at a much higher WTI pricing. The acquired interest included wells currently on production, wells that have already been drilled and are awaiting completion in 22, as well as significant interest in wells scheduled on our 22 and 23 drilling programs. This is a field that we understand very well and have a high confidence in the well economics, supporting our belief that these are highly accretive transactions with excellent risk-adjusted returns. We're starting 22 in an incredibly strong financial position, and I expect to have attractive cash flow from operations during the year. With our current hedges in place and using the $70 price for WTI and $4 for gas, We model over $900 million in EBITDA, resulting in over $500 million of adjusted free cash flow, which demonstrates that we can continue to grow our return to capital program while also continue to pursue acquisition opportunities that will compete with our current profile. By investing in Whiting, we think Sheralds can really have it all. And with that, I'll turn it back to Sarah. Thank you.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. As a reminder, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Leo Mariani with KeyBank. Please go ahead.