UBS Reiterates Neutral on Whiting Petroleum (WLL) Ahead of North Dakota midstream Sale

November 22, 2016 8:38 AM EST
Get Alerts WLL Hot Sheet
Price: $12.08 --0%

Rating Summary:
    23 Buy, 24 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 17 | Down: 24 | New: 11
Trade WLL Now!
Join SI Premium – FREE

Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.

UBS reiterated a Neutral rating and $8.00 price target on Whiting Petroleum (NYSE: WLL) as the company gets set to sell its North Dakota midstream assets to TLLP. The deal, for net proceeds of $375MM, includes WLL's 50% w.i. in the Robinson Lake & Belfield gas processing plants and associated gathering systems. WLL plans to direct a portion of proceeds to debt reduction, potentially to retire ~$275MM of 2018 senior notes, with the balance to fund increased activity next year.

Analyst William Janela commented, "WLL will sell its North Dakota midstream assets to TLLP for net proceeds of $375MM. The package includes WLL's 50% w.i. in the Robinson Lake & Belfield gas processing plants (~170 MMcfd combined gross capacity) and associated gathering systems. WLL estimates the assets contribute ~$40MM of net annualized EBITDA (below TLLP's forecast of ~$55MM which assumes increased drilling/completion activity). Using WLL's estimates implies it is divesting the assets for ~9.5x EBITDA, above its pre-deal 2017-18E EV/EBITDX valuation of ~8.7x/8.1x at strip prices & consistent with recent commentary indicating an internal threshold of "at least" 8.0x on a potential sale. While the deal valuation was generally in line with expectations, it brings to a close >2 years of speculation over a sale & we view the announcement as positive for sentiment given the potential for incremental debt reduction & additional capex flexibility in 2017."

For an analyst ratings summary and ratings history on Whiting Petroleum click here. For more ratings news on Whiting Petroleum click here.

Shares of Whiting Petroleum closed at $10.23 yesterday.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In






Related Categories

Analyst Comments

Related Entities

UBS

Add Your Comment