Floor Trader: Whiting Petroleum Offer To Create Inventory Backlog

Whiting Petroleum Corp (NYSE: WLL)'s inventory backlog of shares created by its pending public offering will take time to unload, a trader told Benzinga on Tuesday.

The stock tumbled more than 20 percent on disappointment that its rumored sale is likely dead in the wake of plans to raise $3.2 billion in a stock offering and sale of notes.

"It's clearly going to take a few weeks to work through the overhead supply after this kind of a deal," New York Stock Exchange Floor Trader Timothy Anderson told Benzinga.

Anderson, of TJM Institutional Services LLC, called the $30 a share offering price "a very, very steep discount" for the 35 million-share transaction.

On Monday, Whiting had changed hands near $50, and were trading recently at $31.

"Clearly they need capital," said Anderson. "But it will take some time to get back to the $35 range."

The company, which specialized in hydro-fracking in the North Dakota Bakken oil field, hit a 52-week low in December of $24.13, but was trading as high as $92.92 earlier in 2014.

"They're generally viewed as a very strong, well-managed operator," Anderson said. "They're still thought to have very solid management in their little subset of the oil space."

Whiting is expected to outspend its cash flow by $850 million this year, and by $600 million in 2016, according to Susquehanna's Biju Perincheril.