Shareholders of Denver-based Whiting Petroleum voted this week in support of a $6 billion merger with Houston’s Oasis Petroleum Inc.
The move will result in a transfer of the company headquarters from Denver to Houston and also give the new company more focus in the Williston basin of North Dakota. Nearly 972,000 net acres will be available for the company in the Williston, acres with combined production of nearly 168,000 barrels of oil equivalent a day.
Under the terms of the agreement, Whiting shareholders will receive 0.5774 shares of Oasis common stock and $6.25 in cash for each share of Whiting common stock owned. In connection with the closing of the transaction, Oasis shareholders will receive a special dividend of $15.00 per share. The combined company will have an enterprise value of ~$6.0B based on the exchange ratio and the closing share prices for Whiting and Oasis as of March 4, 2022. Upon completion of the transaction, Whiting shareholders will own approximately 53% and Oasis shareholders will own approximately 47% of the combined company on a fully diluted basis.
Upon closing, Whiting’s President and CEO, Lynn Peterson, will serve as Executive Chair of the Board of Directors of the combined company. Oasis’ CEO, Danny Brown, will serve as President and Chief Executive Officer and as a member of the Board.
The combined company will be headquartered in Houston upon closing but will retain the Denver office for the foreseeable future. The combined company will operate under a new name and is expected to trade on the NASDAQ under a new ticker to be announced prior to closing.
“The combination will bring together two excellent operators with complementary and high-quality assets to create a leader in the Williston Basin, poised for significant and resilient cash flow generation,” said Brown. “Over the last year, both companies have executed a series of deliberate strategic transactions, reducing costs and establishing a leading framework for ESG and return of capital. The combination of the two companies, together with the ongoing momentum from these strategic actions, will accelerate our efforts and ideally position the combined company to generate strong free cash flow, execute a focused strategy and enhance the return of capital.”
Peterson added, “We are bringing together two like-minded companies and cultures through a merger-of-equals transaction. Both organizations have outstanding talent and operational practices that we are excited to integrate to create an even stronger combined company. This is also an exciting and very positive development for the communities in which we operate and the great states of North Dakota and Montana. We look forward to unlocking the enormous potential of our assets and organizations for the benefit of our stakeholders.”