December 22, 2005
Mr. James J. Volker
Chairman, President and Chief Executive Officer
Whiting Petroleum Corporation
1700 Broadway, Suite 2300
Denver, Colorado 80290-2300
Re: Whiting Petroleum Corporation
Registration Statement on Form S-4
Filed November 23, 2005
File No. 333-129942
Form 10-K for the Fiscal Year Ended December 31,
2004
Filed February 28, 2005
File No. 01-31899
Dear Mr. Volker:
We have limited our review of the above filings to only the
areas upon which we have issued comments. Where indicated, we
think
you should revise your documents in response to these comments.
If
you disagree, we will consider your explanation as to why our
comment
is inapplicable or a revision is unnecessary. Please be as
detailed
as necessary in your explanation. In some of our comments, we may
ask you to provide us with supplemental information so we may
better
understand your disclosure. After reviewing this information, we
may
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form S-4
General
1. Provide current and updated disclosure and updated accountants`
consents with each amendment.
2. Please note that we will not be in a position to declare the
pending registration statement effective until all comments have
been
addressed.
Form 10-K for the Fiscal Year Ended December 31, 2004
Business
Overview, page 3
3. We note your disclosure of "Pre-Tax PV10%" here and elsewhere
in
your document. Please address the following:
* Describe in greater detail, how the measure is calculated.
* Clarify whether or not the information used to calculate this
ratio
is derived directly from data determined in accordance with FAS
69;
* If the ratio does not use data determined in accordance with FAS
69, please identify the source of the data;
* Indicate whether or not the ratio is a non-GAAP measure, as
defined
by Item10(e)(2) of Regulation S-K;
* if the ratio is a non-GAAP measure, supplementally explain why
it
is appropriate to disclose it in Commission filings based on the
conditions identified in Item 10(e)(1)(ii) of Regulation S-K;
* if you determine that it is appropriate to disclose the non-GAAP
measure in Commission filings, provide the disclosure required by
Item 10(e)(1)(i) and Question 8 of the Frequently Asked Questions
Regarding the Use of Non-GAAP Financial Measures, which can be
located at
http://www.sec.gov/divisions/corpfin/faqs/nongaapfaq.htm;
* disclose how management uses this measure;
* disclose the limitations of this measure; and,
* indicate whether your measure is comparable to other like
measures
disclosed by other companies.
Selected Financial Data, page 23
4. Please modify your presentation to disclose all statement of
cash
flow measures to provide investors with a more balanced
presentation.
Refer to FRC 202.03.
Financial Statements
Statement of Operations
5. We note that the nature of the line items under the caption
revenue include income items that are not generally characterized
as
revenue. Please revise your caption to one that more accurately
describes the nature of the items included in that subtotal.
Note 1 - Summary of Significant Accounting Policies
Revenue Recognition, page 50
6. Your accounting policy pertaining to the entitlements method to
record natural gas revenues is unclear. Specifically the
statements
that reads, "...regardless of whether the Company has taken its
share
of the related revenue." Please provide us with an understanding
of
how this statement as pertinent to the entitlements method.
7. Please modify your policy disclosure to clearly indicate, if
true,
that your imbalance positions are related to the use of the sales
method to record oil revenues.
Oil and Gas Producing Activities, page 49
8. Please disclose how you account for 3-D seismic costs. We note
your related disclosure of 3-D seismic costs and how it is used in
your business on page 6.
9. Please explain why you take into account the cost to abandon a
well into your calculation of depreciation, depletion and
amortization. Refer to paragraph 37 of SFAS 19 which was amended
by
SFAS 143.
Note 3 - Investment in Partnerships, page 52
10. We note you obligation to assume losses of partnerships that
serve as the general partner. Please explain why you have not
consolidated these entities. Refer to EITF 04-05.
Note 5 - Long-Term Debt
Interest Rate Swap, page 55
11. We note your disclosure that indicates your interest rate swap
agreement meets the conditions to qualify for the "short cut"
method
of assessing effectiveness. Please provide us with an analysis
supporting your conclusion that addresses the conditions outlined
in
Paragraph 68a to h, of SFAS 133.
Note 11 - Disclosures About Oil and Gas Producing Activities
(Unaudited), page 61
12. Indicate, if true, true that your reserve quantity estimates
have
been determined using the year end price. If not, please indicate
how you determine the price to use.
Engineering Comments
Disclosures about Oil and Gas Producing Activities (Unaudited),
page
62
13. Please submit to us the petroleum engineering reports - in
hard
copy and electronic spreadsheet format - you used as the basis for
the disclosed proved reserves of your 2 largest 2004 acquisitions`
- -
Permian Basin Properties and Equity Oil Company. The report
should
include:
a) One-line recaps for each property sorted by field and by
present
worth within each proved reserve category including the estimated
date of first production for your proved undeveloped properties;
b) Total company summary income forecast schedules for each proved
reserve category with proved developed segregated into producing
and
non-producing properties;
c) Individual income forecasts for each acquisition`s two largest
properties (net equivalent reserve basis) in the proved developed
and
proved undeveloped categories as well as the AFE for each of the
six
PUD projects;
d) Engineering exhibits (e.g. base maps, rate/time plots,
volumetric
calculations) for each of these eight largest properties. Please
include normal operational plots such as oil cut vs. cumulative
production and injection history/estimated fill up for any
secondary
recovery units in the largest four developed properties.
e) Maps for PUD property that identify existing well and PUD
locations as well as producing status. You may contact us for
assistance in this or any other matter.
14. Please reconcile to us the difference between the 2004 line
item
for purchases of minerals in place - 428 BCFE - and the sum of
your
acquisitions` proved reserves - 436 BCFE - on pages 59 and 60.
Closing Comments
As appropriate, please amend the above filings in response
to
these comments. You may wish to provide us with a marked copy of
the
amendment to expedite our review. Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested information. Detailed cover letters greatly
facilitate
our review. Please understand that we may have additional
comments
after reviewing your amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Please contact Kevin Stertzel at (202) 551-3723 or Jill
Davis,
Branch Chief, at (202) 551-3683 if you have questions regarding
comments on the financial statements and related matters. Please
contact Ronald Winfrey, Petroleum Engineer, at (202) 551-3704 if
you
have questions regarding the engineering comments. Please contact
Jason Wynn at (202) 551-3756 or me at (202) 551-3740 with any
other
questions. Direct all correspondence to the following ZIP code:
20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
cc: J. Wynn
K. Stertzel
J. Davis
R. Winfrey
via facsimile
Paul Jones
Foley & Lardner LLP
(414) 297-4900
??
??
??
??
Mr. James J. Volker
Whiting Petroleum Corporation
December 22, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF CORPORATION FINANCE
MAIL STOP 7010