Whiting Petroleum downgraded at Canaccord, may still pursue asset sales

On Friday Canaccord Genuity issued a report downgrading Whiting Petroleum Corporation

from Buy to Hold based on the dilution from recent equity offerings. Canaccord also lowered their price target for Whiting Petroleum from $35 to $34. Stephen Berman and Sam Burwell, analysts at Canaccord Genuity, wrote, "The dilutive effect of last month's equity/convert issuance reduced our NAV/share to $41 from $52 at the time. A lower $65/bbl long-term oil assumption (down from $68/Bbl in conjunction with our updated price deck) now shaves off another $1/ share. At the same time, WLL has appreciated by 14 percent since the initial sell-off after the offerings were announced on March 23. We believe the stock is fully valued at this juncture." Canaccord believes that Whiting Petroleum will continue to pursue asset sales. Whiting has announced its intention to raise $1 billion through divestitures this year. Initial sales are expected to be of the company's midstream assets rather than non-core E&P assets. One of the key risks to Whiting Petroleum is oil prices. If oil prices fall below $60/bbl, the economics for some of its projects could be in question, which may cause them to be shut down. Currently Whiting Petroleum is trading at $34.99, down 0.74 percent.