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The shares of small cap independent oil producer Whiting Petroleum (NYSE:WLL) appear to be an attractive participation in the latest rebirth of traditional oil areas of the U.S. Management appears capable and trustworthy, financial position is sound and the McDep Ratio is reasonable. Stock price reacted quickly to strong quarterly results released after the market close on April 28. The results justify an increase in estimated unlevered cash flow (Ebitda). The higher cash flow in turn supports higher Net Present Value (NPV) in our industry context .

The company is concentrating its efforts in the Sanish and Lewis and Clark fields in North Dakota along with the North Ward Estes field in West Texas and the Postle field in Oklahoma. Uneconomic for new investment at oil prices of a year ago, the old oil areas are wonderfully profitable at current oil prices especially with new horizontal multistage fracturing technology. The unwelcome tragedy unfolding in deep water offshore may further strengthen the global oil price outlook and that for our small cap and income stocks.

Originally published on April 30, 2010.

Source: Whiting Petroleum Looks Attractive on Capable Management, Sound Financials