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Merger of Equals: Whiting and Oasis $6B Deal04/22/2022
The two Bakken shale producers announced in a joint statement on March 7 that they had reached an agreement to unite in a $6 billion "merger of equals."
The deal provides Whiting stockholders with 0.5774 shares of Oasis common stock in addition to $6.25 in cash per share of Whiting stock owned. It is expected that the combined company will be listed on the NASDAQ under a revised ticker that will be announced prior to the closing under the leadership of Oasis CEO Danny Brown.
Combining these two companies will create a leading Williston Basin position with assets covering approximately 972,000 net acres, production of 167,800 boe/d, and an enhanced free cash flow generation that will generate capital returns to shareholders.
A historic collapse in oil prices prompted both Whiting and Oasis oil companies to file for Chapter 11 bankruptcy protection in 2020. Thus, the merger can be viewed as a preventive measure to avoid going out of business.
Each company has executed a series of strategic transactions over the last year, reducing costs and establishing leading frameworks for ESG. Together, these two companies' efforts should accelerate, and they will be better positioned to generate strong free cash flow, implement a streamlined strategy, and boost the return on capital. It should also benefit the development of the communities in which these companies operate in the great states of North Dakota, Texas, and Montana.
In the wake of the transaction, Brown will be named president and CEO of the combined company, which will have a headquarters in Houston but retain a Denver office going forward. Lynn Peterson, Whiting's president, and CEO will serve as the board's executive chair.
Both boards of directors of the companies have unanimously approved the transaction, which is expected to close in the second half of 2022. Under customary closing conditions, the Whiting and Oasis shareholders will have to approve the deal as well.
The combined company will have approximately 53% Whiting shareholders and 47% Oasis shareholders, assuming that the transaction closes on an all-stock basis. A special dividend of $15 per share will be paid to Oasis shareholders upon the closing of the transaction.
An investment return program representing 60% of the free cash flow will be implemented during the second half of 2022. Combining the two companies will enable a quarterly dividend increase of roughly $25 million, which would equal $0.585 per share, through variable dividends and share repurchases. Prior to closing, each company will carry on with its formally announced programs.
Whiting has been advised regarding the transaction by Citi and Kirkland & Ellis LLP. While Tudor, Pickering, Holt & Co., RBC Capital Markets LLC, and Vinson & Elkins LLP advise Oasis.
If you wish to learn more about recent M&A in the O&G industry or just want to get a better hold on general basin development in Northern Hemisphere, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
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Continental Resources Inc. Invests a Quarter of a Billion Dollars in a Sequestration Project in North Dakota
The investment will happen in the next 2 years. The project intends to capture CO2 from ethanol plants and other sources in Iowa, Nebraska, Minnesota, North Dakota, and South Dakota. Upon aggregation, CO2 will be transported via pipeline to North Dakota, where it will be stored in subsurface geologic formations. The formations will be in the Williston Basin, where Continental Resources has been a dominant producer for more than half a century. At the moment it’s the world's most ambitious carboncapture venture of its kind. The sequestration itself should be underway by spring 2024.
Exxon Mobil Corp. is weighing prospects of selling its assets in North Dakota’s Bakken, after gauging interest from potential buyers — 5 billion is the issue price, at least according to rumors. The price point came about after the news that the oilgiant is in the final round of hiring bankers to help launch the sale. Yet Exxon Mobil itself stays tight-lipped regarding the situation.
In order to sell its part of the sprawling Eagle Ford Shale acreage, Chesapeake Energy Corp. on January 18 concluded an agreement to trade its Brazos Valley region assets to WildFire Energy I LLC for $1.425 billion.
On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.