Industry benchmark Brent crude for May delivery prices are up 1.81% to $56.11 per barrel, while West Texas crude prices are also gaining, up 1.47% to $48.21 per barrel in trading today.
The rise is partially due to a euro that is gaining strength against the dollar in trading. The euro is gaining 0.45% to $1.0972 against the dollar today, reversing a recent decline against the dollar and making commodities traded in dollars, like oil, more attractive for foreign investors.
Oil prices have declined by 50% over the past nine months as a glut of supply has continuously put pressure on prices.
Oil prices are expected to stabalize between $55 and $60 a barrel in the next two month, a senior delegate from OPEC told Reuters yesterday.
TheStreet's David Peltier wrote this about Whiting in yesterday's Stock's Under $10 blog:
Whiting Petroleum is trading 20% lower today, changing hands around $30.58, after management announced a sizable capital raise overnight. This Alert is an update on the company and we're not recommending any trades for the model portfolio.
Earlier today, Whiting sold 35 million shares at $30 each and sold $1.75 billion worth of bonds. The debt will be used to refinance borrowings used to fund the Kodiak Oil & Gas acquisition, from which our position emanated. Strategically, we applaud the fact the company is improving its financial position with these moves, but it is certainly coming at a high cost to investors in the near term. Management said earlier today they are still considering selling non-core assets, but today's capital raising has all but dashed the hopes of folks speculating that Whiting would be a takeover target.
In light of today's move, we maintain our Two rating on the company, but do not see an urgent need to commit new capital to the stock while it's trading above the offering price.
TheStreet Ratings team rates WHITING PETROLEUM CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate WHITING PETROLEUM CORP (WLL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite the weak revenue results, WLL has outperformed against the industry average of 19.6%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for WHITING PETROLEUM CORP is currently very high, coming in at 71.37%. Regardless of WLL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WLL's net profit margin of -52.00% significantly underperformed when compared to the industry average.
- Net operating cash flow has declined marginally to $466.00 million or 5.01% when compared to the same quarter last year. Despite a decrease in cash flow of 5.01%, WHITING PETROLEUM CORP is in line with the industry average cash flow growth rate of -11.68%.
- WHITING PETROLEUM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WHITING PETROLEUM CORP reported lower earnings of $0.80 versus $3.07 in the prior year. For the next year, the market is expecting a contraction of 171.3% in earnings (-$0.57 versus $0.80).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 496.8% when compared to the same quarter one year ago, falling from -$59.27 million to -$353.68 million.
- You can view the full analysis from the report here: WLL Ratings Report
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