Whiting Petroleum Corp. (NYSE: WLL) bumped through a ragged second quarter with production missing expectations, but the company closed on a bright spot afterward with the sale of the North Ward Estes Field in Ward and Winkler counties, Texas.

Whiting stayed on budget with a capex of $79.4 million, a 70% improvement from the first quarter. However, production totaled 12.2 million barrels of oil equivalent (MMboe), an average of 134,245 boe/d.

Daniel P. Katzenberg, senior analyst at Baird Equity Research, said the production missed his expectations by 5% and Wall Street’s by 8%.

However, on July 27, Whiting closed the sale of its North Ward Estes Field and associated assets to a third party for $300 million, before closing costs and adjustments. The deal includes a $100 million contingency payoff. The price equates to a net cash price of $34,900 per boe/d. Whiting used the net proceeds from the sale to repay a portion of the debt outstanding under its credit agreement.

The transaction allows Whiting “to reduce our leverage and thereby strengthen our balance sheet while maintaining our strategic focus on our core properties located in the Williston Basin in North Dakota and Denver-Julesburg Basin in Colorado,” said James J. Volker, Whiting’s chairman, CEO and president.

In October, Volker seemed reluctant to sell the asset, saying, “I have liked that particular property for a long period of time.”

Katzenberg said the sale of the North Ward Estes was a welcome development, and that the $100 million kicker will continue to pay Whiting should the price reach $50/bbl in June 2018.

Whiting said the properties being sold produce about 8.6 Mboe/d, or 6.4% of the company’s June production.

While the transaction might not seem to make a dent in Whiting’s valuation on a flowing barrel basis, “North Ward is a high-cost EOR asset with weak margins in the commodity environment and investors will be pleased with the forward progress on asset sales,” said Kashy Harrison, an analyst at Piper Jaffray & Co.

The $100 million potential oil price payment will be made at the option of the buyer, either in cash on July 31, 2018, or in the form of a secured promissory note accruing interest at 8% per annum with a maturity of July 29, 2022.

The effective date of the sale is July 1. Whiting will operate the properties under a transition services agreement for three months after the closing date.

Whiting also said that in late June, it restarted operations in the Williston Basin in connection with a 44-well participation agreement announced in the first quarter.

Whiting’s Williston Basin enhanced completions are tracking at a 900 Mboe type curve. The company said it will add 16 completions in the second half of 2016. Plans to reduce its DUC inventory will increase the company’s fiscal year 2016 capex by $50 million.

Darren Barbee can be reached at dbarbee@hartenergy.com.