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Whiting Petroleum cash flow enough for increased activity in newly acquired Williston Basin acreage

Company believes acreage is prospective in Bakken, Three Forks formations

DENVER – Whiting Petroleum Corp. (NYSE: WLL) has acquired oil and gas leasehold interests covering 111,966 gross acres (90,174 net acres) in the Montana portion of the Williston Basin from undisclosed sellers. The company believes that the acquired properties are prospective in both the Bakken shale and Three Forks formations. The undeveloped leasehold acreage is located in Roosevelt and Sheridan Counties within Whiting's Starbuck Prospect area. 

President and CEO, James J. Volker, commented, “This acquisition brings our total net acreage in the Bakken and Three Forks Hydrocarbon System (BTFHS) of North Dakota and Montana to 532,266 net acres."

Analysis
While an acreage price was not given, a September 7 report from Jefferies & Co. Inc. noted that the Denver-based company typically targets $200-300/acre.

“Assuming $75 oil for the remainder of the year, the company should generate cash flow of $525 million versus capex of $500 million. After the buy back of some long-term debt as well as the redemption of its preferred shares, the company should have $650 million remaining on its $1.1 billion revolver. Looking to '11, the company should generate cash flow of $1.1 billion, adequate for a ramp-up in Lewis & Clark as well as for exploration activity in the newly acquired acreage,” noted Jefferies. 

Shares of the company were down -1.200 (-1.303%) at US$90.86 Tuesday afternoon. 

Sources:  Whiting Petroleum Corp., Jefferies & Co. Inc.

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