Intrinsic value of Whiting Petroleum - WLL

Previous Close

$4.21

  Intrinsic Value

$3.54

stock screener

  Rating & Target

hold

-16%

  Value-price divergence*

-33%

Previous close

$4.21

 
Intrinsic value

$3.54

 
Up/down potential

-16%

 
Rating

hold

 
Value-price divergence*

-33%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of WLL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -38.58
  27.90
  25.61
  23.55
  21.69
  20.02
  18.52
  17.17
  15.95
  14.86
  13.87
  12.98
  12.19
  11.47
  10.82
  10.24
  9.71
  9.24
  8.82
  8.44
  8.09
  7.78
  7.51
  7.26
  7.03
  6.83
  6.64
  6.48
  6.33
  6.20
  6.08
Revenue, $m
  1,285
  1,644
  2,064
  2,551
  3,104
  3,725
  4,415
  5,174
  5,999
  6,890
  7,846
  8,865
  9,945
  11,086
  12,285
  13,543
  14,859
  16,232
  17,664
  19,154
  20,704
  22,316
  23,991
  25,731
  27,540
  29,420
  31,375
  33,408
  35,523
  37,725
  40,018
Variable operating expenses, $m
 
  3,872
  4,864
  6,009
  7,313
  8,777
  10,403
  12,189
  14,134
  16,233
  18,485
  20,886
  23,431
  26,118
  28,944
  31,907
  35,007
  38,243
  41,616
  45,127
  48,779
  52,576
  56,523
  60,623
  64,885
  69,314
  73,920
  78,709
  83,693
  88,880
  94,283
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,155
  3,872
  4,864
  6,009
  7,313
  8,777
  10,403
  12,189
  14,134
  16,233
  18,485
  20,886
  23,431
  26,118
  28,944
  31,907
  35,007
  38,243
  41,616
  45,127
  48,779
  52,576
  56,523
  60,623
  64,885
  69,314
  73,920
  78,709
  83,693
  88,880
  94,283
Operating income, $m
  -870
  -2,229
  -2,799
  -3,459
  -4,209
  -5,052
  -5,987
  -7,015
  -8,135
  -9,343
  -10,639
  -12,021
  -13,486
  -15,032
  -16,659
  -18,364
  -20,148
  -22,011
  -23,952
  -25,973
  -28,075
  -30,260
  -32,532
  -34,892
  -37,345
  -39,894
  -42,545
  -45,301
  -48,170
  -51,155
  -54,265
EBITDA, $m
  302
  -957
  -1,201
  -1,484
  -1,806
  -2,168
  -2,570
  -3,011
  -3,491
  -4,010
  -4,566
  -5,159
  -5,788
  -6,452
  -7,150
  -7,882
  -8,648
  -9,447
  -10,280
  -11,148
  -12,050
  -12,988
  -13,963
  -14,976
  -16,028
  -17,123
  -18,260
  -19,443
  -20,675
  -21,956
  -23,291
Interest expense (income), $m
  240
  194
  267
  352
  450
  562
  688
  828
  981
  1,148
  1,328
  1,522
  1,728
  1,947
  2,177
  2,420
  2,675
  2,941
  3,219
  3,509
  3,810
  4,124
  4,450
  4,789
  5,141
  5,507
  5,888
  6,283
  6,695
  7,123
  7,568
Earnings before tax, $m
  -1,427
  -2,423
  -3,066
  -3,810
  -4,659
  -5,614
  -6,675
  -7,843
  -9,116
  -10,491
  -11,968
  -13,543
  -15,214
  -16,979
  -18,836
  -20,784
  -22,823
  -24,952
  -27,171
  -29,481
  -31,885
  -34,384
  -36,982
  -39,681
  -42,486
  -45,401
  -48,432
  -51,585
  -54,864
  -58,278
  -61,833
Tax expense, $m
  -88
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -1,339
  -2,423
  -3,066
  -3,810
  -4,659
  -5,614
  -6,675
  -7,843
  -9,116
  -10,491
  -11,968
  -13,543
  -15,214
  -16,979
  -18,836
  -20,784
  -22,823
  -24,952
  -27,171
  -29,481
  -31,885
  -34,384
  -36,982
  -39,681
  -42,486
  -45,401
  -48,432
  -51,585
  -54,864
  -58,278
  -61,833

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  56
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,876
  12,546
  15,759
  19,470
  23,694
  28,438
  33,706
  39,493
  45,794
  52,597
  59,894
  67,671
  75,917
  84,623
  93,780
  103,382
  113,426
  123,910
  134,838
  146,214
  158,048
  170,350
  183,136
  196,423
  210,231
  224,583
  239,504
  255,023
  271,170
  287,978
  305,484
Adjusted assets (=assets-cash), $m
  9,820
  12,546
  15,759
  19,470
  23,694
  28,438
  33,706
  39,493
  45,794
  52,597
  59,894
  67,671
  75,917
  84,623
  93,780
  103,382
  113,426
  123,910
  134,838
  146,214
  158,048
  170,350
  183,136
  196,423
  210,231
  224,583
  239,504
  255,023
  271,170
  287,978
  305,484
Revenue / Adjusted assets
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
  0.131
Average production assets, $m
  9,947
  12,721
  15,979
  19,741
  24,024
  28,835
  34,176
  40,044
  46,432
  53,331
  60,729
  68,614
  76,976
  85,803
  95,087
  104,823
  115,007
  125,637
  136,717
  148,252
  160,251
  172,725
  185,689
  199,161
  213,162
  227,713
  242,843
  258,578
  274,950
  291,993
  309,742
Working capital, $m
  145
  113
  142
  176
  214
  257
  305
  357
  414
  475
  541
  612
  686
  765
  848
  934
  1,025
  1,120
  1,219
  1,322
  1,429
  1,540
  1,655
  1,775
  1,900
  2,030
  2,165
  2,305
  2,451
  2,603
  2,761
Total debt, $m
  3,535
  4,847
  6,396
  8,185
  10,220
  12,507
  15,046
  17,836
  20,872
  24,152
  27,669
  31,417
  35,392
  39,588
  44,002
  48,630
  53,471
  58,525
  63,792
  69,275
  74,979
  80,909
  87,072
  93,476
  100,131
  107,049
  114,241
  121,721
  129,504
  137,606
  146,043
Total liabilities, $m
  4,735
  6,047
  7,596
  9,385
  11,420
  13,707
  16,246
  19,036
  22,072
  25,352
  28,869
  32,617
  36,592
  40,788
  45,202
  49,830
  54,671
  59,725
  64,992
  70,475
  76,179
  82,109
  88,272
  94,676
  101,331
  108,249
  115,441
  122,921
  130,704
  138,806
  147,243
Total equity, $m
  5,141
  6,499
  8,163
  10,085
  12,273
  14,731
  17,460
  20,457
  23,721
  27,245
  31,025
  35,053
  39,325
  43,835
  48,578
  53,552
  58,754
  64,185
  69,846
  75,739
  81,869
  88,242
  94,865
  101,747
  108,900
  116,334
  124,063
  132,102
  140,466
  149,173
  158,240
Total liabilities and equity, $m
  9,876
  12,546
  15,759
  19,470
  23,693
  28,438
  33,706
  39,493
  45,793
  52,597
  59,894
  67,670
  75,917
  84,623
  93,780
  103,382
  113,425
  123,910
  134,838
  146,214
  158,048
  170,351
  183,137
  196,423
  210,231
  224,583
  239,504
  255,023
  271,170
  287,979
  305,483
Debt-to-equity ratio
  0.688
  0.750
  0.780
  0.810
  0.830
  0.850
  0.860
  0.870
  0.880
  0.890
  0.890
  0.900
  0.900
  0.900
  0.910
  0.910
  0.910
  0.910
  0.910
  0.910
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
Adjusted equity ratio
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,339
  -2,423
  -3,066
  -3,810
  -4,659
  -5,614
  -6,675
  -7,843
  -9,116
  -10,491
  -11,968
  -13,543
  -15,214
  -16,979
  -18,836
  -20,784
  -22,823
  -24,952
  -27,171
  -29,481
  -31,885
  -34,384
  -36,982
  -39,681
  -42,486
  -45,401
  -48,432
  -51,585
  -54,864
  -58,278
  -61,833
Depreciation, amort., depletion, $m
  1,172
  1,272
  1,598
  1,974
  2,402
  2,883
  3,418
  4,004
  4,643
  5,333
  6,073
  6,861
  7,698
  8,580
  9,509
  10,482
  11,501
  12,564
  13,672
  14,825
  16,025
  17,273
  18,569
  19,916
  21,316
  22,771
  24,284
  25,858
  27,495
  29,199
  30,974
Funds from operations, $m
  648
  -1,151
  -1,468
  -1,836
  -2,257
  -2,730
  -3,258
  -3,839
  -4,472
  -5,158
  -5,895
  -6,681
  -7,516
  -8,398
  -9,327
  -10,302
  -11,322
  -12,388
  -13,499
  -14,656
  -15,860
  -17,112
  -18,413
  -19,765
  -21,170
  -22,630
  -24,148
  -25,727
  -27,369
  -29,079
  -30,859
Change in working capital, $m
  53
  25
  29
  34
  38
  43
  48
  52
  57
  62
  66
  70
  75
  79
  83
  87
  91
  95
  99
  103
  107
  111
  116
  120
  125
  130
  135
  140
  146
  152
  158
Cash from operations, $m
  595
  -1,176
  -1,497
  -1,870
  -2,295
  -2,773
  -3,305
  -3,891
  -4,529
  -5,220
  -5,961
  -6,751
  -7,591
  -8,477
  -9,410
  -10,389
  -11,413
  -12,483
  -13,598
  -14,759
  -15,967
  -17,223
  -18,528
  -19,885
  -21,294
  -22,760
  -24,283
  -25,867
  -27,515
  -29,231
  -31,017
Maintenance CAPEX, $m
  0
  -995
  -1,272
  -1,598
  -1,974
  -2,402
  -2,883
  -3,418
  -4,004
  -4,643
  -5,333
  -6,073
  -6,861
  -7,698
  -8,580
  -9,509
  -10,482
  -11,501
  -12,564
  -13,672
  -14,825
  -16,025
  -17,273
  -18,569
  -19,916
  -21,316
  -22,771
  -24,284
  -25,858
  -27,495
  -29,199
New CAPEX, $m
  -553
  -2,774
  -3,258
  -3,763
  -4,283
  -4,811
  -5,341
  -5,868
  -6,388
  -6,899
  -7,398
  -7,885
  -8,361
  -8,827
  -9,285
  -9,736
  -10,183
  -10,631
  -11,080
  -11,535
  -11,999
  -12,474
  -12,964
  -13,472
  -14,000
  -14,552
  -15,129
  -15,735
  -16,372
  -17,043
  -17,749
Cash from investing activities, $m
  -223
  -3,769
  -4,530
  -5,361
  -6,257
  -7,213
  -8,224
  -9,286
  -10,392
  -11,542
  -12,731
  -13,958
  -15,222
  -16,525
  -17,865
  -19,245
  -20,665
  -22,132
  -23,644
  -25,207
  -26,824
  -28,499
  -30,237
  -32,041
  -33,916
  -35,868
  -37,900
  -40,019
  -42,230
  -44,538
  -46,948
Free cash flow, $m
  372
  -4,945
  -6,027
  -7,230
  -8,552
  -9,986
  -11,530
  -13,176
  -14,922
  -16,762
  -18,692
  -20,710
  -22,813
  -25,002
  -27,275
  -29,633
  -32,079
  -34,614
  -37,242
  -39,966
  -42,791
  -45,722
  -48,765
  -51,926
  -55,211
  -58,628
  -62,183
  -65,886
  -69,745
  -73,768
  -77,966
Issuance/(repayment) of debt, $m
  -292
  1,312
  1,549
  1,789
  2,036
  2,287
  2,539
  2,789
  3,037
  3,279
  3,517
  3,749
  3,975
  4,196
  4,414
  4,628
  4,841
  5,053
  5,267
  5,483
  5,704
  5,930
  6,163
  6,404
  6,655
  6,918
  7,192
  7,480
  7,783
  8,102
  8,437
Issuance/(repurchase) of shares, $m
  0
  3,837
  4,730
  5,733
  6,847
  8,072
  9,404
  10,841
  12,379
  14,016
  15,747
  17,571
  19,485
  21,488
  23,579
  25,758
  28,026
  30,383
  32,831
  35,374
  38,015
  40,757
  43,605
  46,563
  49,638
  52,835
  56,161
  59,623
  63,228
  66,985
  70,901
Cash from financing (excl. dividends), $m  
  -315
  5,149
  6,279
  7,522
  8,883
  10,359
  11,943
  13,630
  15,416
  17,295
  19,264
  21,320
  23,460
  25,684
  27,993
  30,386
  32,867
  35,436
  38,098
  40,857
  43,719
  46,687
  49,768
  52,967
  56,293
  59,753
  63,353
  67,103
  71,011
  75,087
  79,338
Total cash flow (excl. dividends), $m
  57
  204
  252
  291
  331
  372
  413
  454
  494
  534
  572
  610
  647
  683
  718
  753
  788
  822
  857
  892
  928
  965
  1,003
  1,042
  1,083
  1,125
  1,170
  1,217
  1,266
  1,318
  1,373
Retained Cash Flow (-), $m
  -390
  -3,837
  -4,730
  -5,733
  -6,847
  -8,072
  -9,404
  -10,841
  -12,379
  -14,016
  -15,747
  -17,571
  -19,485
  -21,488
  -23,579
  -25,758
  -28,026
  -30,383
  -32,831
  -35,374
  -38,015
  -40,757
  -43,605
  -46,563
  -49,638
  -52,835
  -56,161
  -59,623
  -63,228
  -66,985
  -70,901
Prev. year cash balance distribution, $m
 
  56
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -3,577
  -4,478
  -5,442
  -6,516
  -7,699
  -8,991
  -10,387
  -11,885
  -13,482
  -15,175
  -16,961
  -18,839
  -20,806
  -22,861
  -25,005
  -27,238
  -29,561
  -31,975
  -34,482
  -37,087
  -39,792
  -42,602
  -45,521
  -48,555
  -51,710
  -54,991
  -58,406
  -61,962
  -65,667
  -69,528
Discount rate, %
 
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
 
  -3,327
  -3,848
  -4,288
  -4,670
  -4,978
  -5,195
  -5,313
  -5,326
  -5,236
  -5,048
  -4,773
  -4,427
  -4,025
  -3,588
  -3,134
  -2,681
  -2,246
  -1,840
  -1,474
  -1,153
  -880
  -655
  -475
  -335
  -230
  -153
  -99
  -62
  -37
  -22
Current shareholders' claim on cash, %
  100
  48.1
  23.6
  11.8
  6.0
  3.1
  1.6
  0.9
  0.5
  0.2
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Whiting Petroleum Corporation, an independent oil and gas company, engages in the development, production, acquisition, and exploration of crude oil, natural gas liquids, and natural gas primarily in the Rocky Mountains region of the United States. It sells oil and gas to end users, marketers, and other purchasers. As of December 31, 2016, the company had total estimated proved reserves of 615.5 million barrels of oil equivalent; and interests in 1,917 net productive wells on approximately 517,200 net developed acres. Whiting Petroleum Corporation was founded in 1980 and is based in Denver, Colorado.

FINANCIAL RATIOS  of  Whiting Petroleum (WLL)

Valuation Ratios
P/E Ratio -1.1
Price to Sales 1.2
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 2.6
Price to Free Cash Flow 36.3
Growth Rates
Sales Growth Rate -38.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -77.9%
Cap. Spend. - 3 Yr. Gr. Rate -25.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0.8
LT Debt to Equity 68.8%
Total Debt to Equity 68.8%
Interest Coverage -5
Management Effectiveness
Return On Assets -10.5%
Ret/ On Assets - 3 Yr. Avg. -8.4%
Return On Total Capital -14.4%
Ret/ On T. Cap. - 3 Yr. Avg. -11.5%
Return On Equity -27.1%
Return On Equity - 3 Yr. Avg. -22.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 65.7%
Gross Margin - 3 Yr. Avg. 71%
EBITDA Margin -1.2%
EBITDA Margin - 3 Yr. Avg. -8.5%
Operating Margin -67.7%
Oper. Margin - 3 Yr. Avg. -66.1%
Pre-Tax Margin -111.1%
Pre-Tax Margin - 3 Yr. Avg. -83.1%
Net Profit Margin -104.2%
Net Profit Margin - 3 Yr. Avg. -69.4%
Effective Tax Rate 6.2%
Eff/ Tax Rate - 3 Yr. Avg. 29%
Payout Ratio 0%

WLL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WLL stock intrinsic value calculation we used $1285 million for the last fiscal year's total revenue generated by Whiting Petroleum. The default revenue input number comes from 2016 income statement of Whiting Petroleum. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WLL stock valuation model: a) initial revenue growth rate of 27.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.5%, whose default value for WLL is calculated based on our internal credit rating of Whiting Petroleum, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Whiting Petroleum.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WLL stock the variable cost ratio is equal to 235.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for WLL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.5% for Whiting Petroleum.

Corporate tax rate of 27% is the nominal tax rate for Whiting Petroleum. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WLL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WLL are equal to 774%.

Life of production assets of 10 years is the average useful life of capital assets used in Whiting Petroleum operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WLL is equal to 6.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5141 million for Whiting Petroleum - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 362.996 million for Whiting Petroleum is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Whiting Petroleum at the current share price and the inputted number of shares is $1.5 billion.

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COMPANY NEWS

▶ Short Interest Trends: Whiting Petroleum Stock   [Aug-23-17 11:53AM  Market Realist]
▶ How Do Analysts Feel about Whiting Petroleum?   [09:07AM  Market Realist]
▶ Whats Going on with Whiting Petroleum Stock   [05:00PM  Market Realist]
▶ These Energy Stocks Fell the Most Last Week   [11:21AM  Market Realist]
▶ Wall Street Sentiment: Whiting Petroleum Stock   [Aug-15-17 05:35PM  Market Realist]
▶ Whats Up with Whiting Petroleums Stock?   [02:32PM  Market Realist]
▶ Wall Street Recommendations for Energy Stocks: August 711   [Aug-14-17 06:06PM  Market Realist]
▶ Recent Short Interest Trends in Whiting Petroleum Stock   [Aug-11-17 07:37AM  Market Realist]
▶ Whiting Petroleum: Analysts Recommendations on Its Stock   [Aug-10-17 04:35PM  Market Realist]
▶ Are Oil-Weighted Stocks Disappointing Energy Investors?   [Aug-09-17 12:28PM  Market Realist]
▶ Oasis Petroleums 2Q17 Results: Close to Expectations   [Aug-04-17 11:42AM  Market Realist]
▶ Is The EIA Exaggerating U.S. Oil Production?   [Aug-03-17 07:00PM  Oilprice.com]
▶ Devon Energy trims full-year spending   [Aug-01-17 05:03PM  Reuters]
▶ Whiting Petroleum: What Are Analysts Recommendations?   [Jul-31-17 09:08AM  Market Realist]
▶ U.S. Shale Slashes Capex As Low Oil Prices Bite   [Jul-30-17 07:00PM  Oilprice.com]
▶ Whiting Petroleums Stock Reaction after 2Q17 Release   [Jul-28-17 10:39AM  Market Realist]
▶ Whiting reports 2Q loss   [Jul-26-17 10:55PM  Associated Press]
▶ What to Watch in the Bakken Shale This Quarter   [Jul-24-17 07:45PM  Motley Fool]
▶ How Is Short Interest in Whiting Stock Trending?   [Jul-20-17 07:39AM  Market Realist]
▶ What to Expect from Whiting Petroleum Stock   [12:36PM  Market Realist]
▶ Analysts Recommendations for Energy Stocks for July 1014   [Jul-17-17 01:05PM  Market Realist]
▶ These 3 Stocks Have Lost Over 50% in 2017   [Jul-16-17 07:07PM  Motley Fool]
▶ What Wall Street Recommends for Whiting Petroleum   [Jul-14-17 10:37AM  Market Realist]
▶ Whiting Petroleums 2Q17 Earnings: What to Expect   [Jul-13-17 04:38PM  Market Realist]
▶ Oils Fall: Which Oil-Weighted Stocks Could Be at Risk?   [Jul-11-17 03:34PM  Market Realist]
▶ What to Expect for Whiting Petroleums Stock in the Next Week   [Jul-10-17 05:06PM  Market Realist]
▶ Has Whiting Petroleum Dug Itself into a Hole?   [03:32PM  Market Realist]
▶ Crude Oil Drives Oil-Weighted Stocks Returns   [11:04AM  Market Realist]
▶ 3 Oil and Gas Stocks for Ambitious Investors   [Jun-28-17 08:44AM  Motley Fool]
▶ Analyst Recommendations for Whiting Petroleum   [Jun-27-17 03:05PM  Market Realist]
▶ What Analysts Recommended for Energy Stocks Last Week   [Jun-26-17 12:05PM  Market Realist]
▶ Last Weeks Crucial Energy Industry Updates   [10:21AM  Market Realist]
▶ Could Oil Fall to $40 a Barrel or Even Less?   [Jun-22-17 09:55AM  24/7 Wall St.]
▶ Shale Stocks Slammed As Crude Continues to Come Unglued   [Jun-21-17 05:00PM  Motley Fool]
Financial statements of WLL
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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