Option #2 Portfolio Milestone Due to the oil and gas industry decline during the past few years, some speculation exist that the industry is beginning to gain traction again. As a result, Whiting Petroleum may be a good investment option. Whiting joined the United States oil and gas industry in 2003 with activities in the development, production, acquisition and exploration of oil. Since their IPO share price of $15.50 in November 2003, the company has experienced a great deal of stock price volatility. In August of 2014 prices reached a high of 92.66 before dropping to low of $3.88 in February of 2016 (Yahoo Finance, 2017). A majority of this volatility came from the firm’s external environment, which includes supply and demand, environmental regulations, politics, and competitors. While the decline of oil and gas has impacted all organizations involved the industry, Whiting has experienced greater volatility in comparison to larger more established companies in this sector (Beattie, 2011). These variations can be assessed …show more content…
One important external environment of Whiting is Supply and Demand. Due to the cost and time commitments of oil acquisition, Whiting cannot easily adjust to supply and demand changes, making financial forecasting very difficult. Furthermore, the political environment between the United States and other oil producing companies can either increase or decrease the need for US oil production. In addition, stringent legal and environmental regulations can substantially increase oil extraction and production costs. Competition, is also a strong external environment component, since more established oil and gas companies are able to offer customers competitive pricing (Beattie, 2011). Therefore, the Whiting Petroleum’s external environment includes supply and demand, politics, legal and environmental regulations and