Whiting Petroleum Corp (WLL) hit a historical low today as it reported a second quarter loss of ($0.28)/share versus an expected gain of $0.27/share. According to Raymond James analysts the loss was due to high operating costs, weak natural gas prices and poor oil volumes. In response Whiting will be cutting a third of its workforce and scaling back its exploration schedule. Shorts have been increasing their exposure to the oil exploration and production stock since its last earnings report and were rewarded with a 39% return on todayâ€™s price drop.
WLL short interest is $495 million; 28.02 million shares shorted; 30.98% of its float; 0.30% stock borrow cost. WLL is the fourth most shorted stock in the Oil & Gas Exploration & Production Sector
WLL shares shorted are up +16.3 million shares; +139.07%, for the year as its stock price fell -22.08%. Virtually all of WLLâ€™s short selling occurred after their last earnings report, with shares shorted increasing by +16.1 billion after May 1st.
Whiting Petroleum short sellers were having a profitable year even prior to todayâ€™s price move, they were up $77 million in year-to-date mark-to-market profits, +20.99%. Todayâ€™s -38.69% decline added +$192 million in mark-to-market profits to their coffers, bringing year-to-date profits to $269 million, +73.42% on the year.
Prior to todayâ€™s trading the $17.45 billion in Oil\Gas Exploration\Production short interest was up $542.7 million in year-to-date mark-to-market profits. Whiting petroleum had the 7th largest year-to-date profit with the top short-side performers being Range Resources (+$224 million), Antero Resources (+$201 million) and Southwestern Energy ($178 million).
WLL short sellers were extremely active over the last three months and todayâ€™s price move will entice more short sellers into the name. We can expect both long and short selling pressure over the short term and more price weakness in the stock.
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Managing Director Predictive Analytics, S3 Partners, LLC
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