Whiting Petroleum to Buy Kodiak Oil & Gas

By Dow Jones Business News, 

Whiting Petroleum to Buy Kodiak Oil & Gas

Whiting Petroleum Corp. announced on Sunday that it will buy Kodiak Oil & Gas Corp. in a deal worth $3.8 billion, plus the assumption of $2.2 billion in debt, creating a new top producer in the Bakken Shale and Three Forks formations.

The two companies together produced 107,000 barrels a day of oil equivalent in North Dakota and Montana during the first quarter. That compares to Continental Resources Inc.'s output of around 97,500 barrels of oil equivalent a day in the region.

The combined company would have assets, including Whiting's Colorado prospects, worth $17.8 billion with reserves of 606 million barrels of oil equivalent, Whiting Chief Executive James Volker said.

The Bakken is one of North America's most prolific shale fields. In April, its output surpassed 1 million barrels of oil a day for the first time. The area's rapid development has made North Dakota the second biggest oil producing state in the U.S., after Texas.

As a combined entity, the companies will be able to drill faster and operate more efficiently, Kodiak Chief Executive Lynn Peterson said.

The $6 billion deal is an all-stock transaction that includes the assumption of Kodiak's $2.2 billion in net debt. Terms call for Kodiak shareholders to receive 0.177 shares in Whiting for each Kodiak share owned. That translates into consideration of $13.90 per share based on Whiting's closing price on Friday--a 5.1% premium over Kodiak's average stock price for the last two months.

Both company boards have approved the deal, which is expected to close by year's end, subject to shareholder and regulatory approval.

Write to Alison Sider at alison.sider@wsj.com

Corrections & Amplifications

This article was corrected July 14, 2014 at 5:38 p.m. ET to reflect that Continental Resources Inc. produced about 97,500 barrels of oil equivalent a day in North Dakota and Montana in the first quarter. The original version of this article incorrectly said Continental produced around 84,000 barrels.

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This article appears in: Energy

Referenced Stocks: KOG , WLL

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