Whiting Petroleum (WLL) Stock Down as Greek Debt Woes Move Oil Lower

NEW YORK (TheStreet) -- Shares of Whiting Petroleum (WLL) are slipping by 3.30% to $34.29 in early afternoon trading on Monday, as the continuing crisis in Greece surrounding the country's enormous debt weighs on oil prices. Some energy and other related stocks are falling as a result.

Crude oil (WTI) is slipping by 2.11% to $58.37 per barrel and Brent crude is retreating by 2.23% to $61.85 per barrel this morning, according to the CNBC.com index.

On Monday, Greece announced it has closed it banks until July 6 and issued capital controls, which has caused investors to run from the risky asset and also weakened the outlook for demand, Reuters reports.

"This may be the time when we break lower and into the $50s for Brent as we have a full week of uncertainty," SEB head of commodity analysis Bjarne Schieldrop told Reuters.

Greece has about $1.8 billion it must pay to the International Monetary Fund on Tuesday, but the growing concern is that the country will not be able to make that payment.

Talks between the debt-riddled country and its international creditors on Saturday came to a halt when Greece's Prime Minister Alexis Tsipras announced he is calling for a referendum on July 5.

The referendum is essentially a vote on measures its creditors have demanded in return for more bailout funds, The Wall Street Journal reports.

Separately, 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. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that WLL's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • Despite the weak revenue results, WLL has outperformed against the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 27.9%. 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 rather high; currently it is at 59.91%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, WLL's net profit margin of -20.18% significantly underperformed when compared to the industry average.
  • 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 197.3% when compared to the same quarter one year ago, falling from $109.07 million to -$106.11 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WHITING PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: WLL Ratings Report

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