Whiting Petroleum (WLL)

Interest Rate Risk

        Market risk is estimated as the change in fair value resulting from a hypothetical 100 basis point change in the interest rate on the outstanding balance under our credit agreement. Our credit agreement allows us to fix the interest rate for all or a portion of the principal balance for a period up to six months. To the extent the interest rate is fixed, interest rate changes affect the instrument’s fair market value but do not impact results of operations or cash flows. Conversely, for the portion of the credit agreement that has a floating interest rate, interest rate changes will not affect the fair market value but will impact future results of operations and cash flows. At December 31, 2004, our outstanding principal balance under our credit agreement was $175.0 million and the interest rate on the entire outstanding principal balance was fixed at 3.42% through January 30, 2005. We subsequently fixed the interest rate on the entire outstanding principal balance at 3.73% through April 29, 2005. At December 31, 2004, the carrying amount approximated fair market value. Assuming a constant debt level of $175.0 million, the cash flow impact for 2005 resulting from a 100 basis point change in interest rates during periods when the interest rate is not fixed would be $1.2 million.