Whiting Petroleum plans 60% decrease in spending in 2021

DENVER and WELD COUNTY — Whiting Petroleum Inc. (NYSE: WLL) will spend far less in new drilling and production in the coming year than it planned to do at the beginning of 2020, a signal that energy producers are still reeling from the steep demand cuts due to the pandemic.

The Denver-based oil producer expects to spend $240 million in capital expenditures across its plays in Colorado, Montana and North Dakota and drill or turn-in-line 93 wells during the year, according to guidance released Tuesday. The company did not respond to queries Tuesday and Wednesday asking how much of that budget is dedicated to Weld County, where almost all of the company’s Colorado production is located.

The 2021 budget is a steep 61.2% drop from the company’s planned maximum of $620 million in capital expenditures at the beginning of 2020 and an early sign of the impact of the dual stressors of a global pandemic curbing fuel demand at the same time that Saudi Arabia and Russia were engaging in a production war that flooded the global market with crude.

However, West Texas Intermediate reached $50 per barrel Tuesday for the first time since late February, a sign that demand is recovering.

Whiting was Weld County’s 10th-largest producer of oil and gas in 2019, producing just under 3.46 million barrels of oil and 3.78 million McF of natural gas.

Whiting was the first major producer in the state to declare bankruptcy during last year’s crisis. It later exited Chapter 11 bankruptcy, shedding $2.4 billion in long-term debt in exchange for those debtholders gaining large ownership stakes in the reorganized company.

According to the most recent data from the Colorado Oil and Gas Conservation Commission, Whiting produced 43.7% less oil and 38.2% less natural gas in 2020 than it did in 2019. It is now the 12th-largest producer in the county after being eclipsed by Verdad Resources LLC and Bayswater Exploration & Production LLC.

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