UPDATE: Oppenheimer Initiates Coverage On Whiting Petroleum

Oppenheimer on Tuesday initiated coverage on Whiting Petroleum Corp WLL with an Outperform rating and $40 price target.

Analyst Robert Du Boff commented that “after falling ~65 percent over the last two months, WLL is trading at an attractive valuation relative to peers, we think, even after adjusting for significantly lower crude oil prices.

"Whiting is well positioned to grow production this year by accelerating drilling on its expanded acreage position in the Williston Basin. It will also benefit from enhanced completions, which have significantly boosted resource recovery and rates of return.”

Du Boff believed that “WLL only needs oil in the mid-$50/bbl range to stay in line with its five-year average P/CF multiple at the current share price.”

The analyst noted concluded, “The company believes it can achieve pro-forma production growth in the high-teens to 20 percent, assuming CAPEX of around $3.8B, flat with 2014 on a combined basis.

“Based on current commodity futures, we estimate EPS of $0.37 in 2015 and $1.17 in 2016, and CFPS of $10.96 and $13.60.”

Whiting Petroleum recently traded at $27.02, up 7.8 percent.