Long - Whiting Petroleum 7.25% 2012's @ 100.5

Whiting Petroleum Corporation is involved in oil and natural gas exploitation,
acquisition, and exploration activities.  The Company focuses on lower risk,
long-lived oil and natural gas properties located primarily in the
Gulf Coast/Permian Basin, Rocky Mountains, Michigan, and Mid-Continent regions
of the United States.

Source: WLL

Given that total debt of USD 770MM just represents 21% of WLL's EV we suggest
that bonds (especially 2012 as the first piece coming due) are well covered by its
geographically diversified oil- and gas assets of 239.1 million barrel of oil equivalent
reserves, 67% of which are classified as proved developed (oi/gas 75%/25%).

Enterprise Value: USD 3.784 MM

EV to total reserves: 15.83 (industry median 14.8)

Source: WLL

The company has a history of constantly generating high operating cash flows compared
to its total debt (2005: 38%, 2006: 41%, 2007: 45%, 2008: 61%, LTM Q3 2009: 57%) and
has about USD 880MM of availability under it's USD 1.2 billion credit facility which is secured
by its oil- and gas properties and comes due in April 2012. 

Historically the company has operated with a low leverage multiple and has
frequently tapped the equity markets to fund its capex and acquisitions. Management has a maximum Debt to Capitalization target of 40% (as per Q3 09 they are at 25%). 2009 Exploration and Development Budget is USD 470MM and with current WTI oil prices at USD 80 they can increase that number significantly and still remain largely funded by operating cash flow.

USD 620MM of the company's USD 770MM total debt is represented by bond debt (subordinated to it's secured facility) and given that the 2012 bonds mature first we
find them to be an attractive investment at 100.5 or a yield of 6.15% (+582 over treasuries).

Covenants:
total debt / EBITDAX max. 4.5x (down to 4.25x in December 2010)
senior secured debt / EBITDAX max. 2.75x (down to 2.5x in March 2010)

Q3 Credit Snapshot

Company presentation