Whiting And Oasis To Combine In $6 Billion Merger Of Equals Transaction

Whiting Petroleum Corporation (NYSE: WLL) (“Whiting”) and Oasis Petroleum Inc. (NASDAQ: OAS) ("Oasis") announced they have entered into an agreement to combine in a merger of equals transaction. The combined company will have a premier Williston Basin position with top tier assets across approximately 972K net acres, combined production of 167.8 thousand boepd, significant scale and enhanced free cash flow generation to return capital to shareholders.

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 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.”

Combined Company Positioned to Succeed in Dynamic E&P Environment

• Premier Williston Basin Position with Enhanced Scale and Top Tier Assets. The combined company will be positioned as a premier operator in the Williston Basin, combining high quality assets with low breakeven pricing operated by an experienced team. The combined company expects to produce 164-169 Mboe/d in 2022.

• Accretive to Financial Metrics. The transaction is expected to be accretive to key per-share metrics, including: E&P cash flow, E&P free cash flow, return of capital and net asset value. The combination is also expected to enhance the combined company’s credit profile and cost of capital, as it will have enhanced scale and stronger cash flow while maintaining an attractive balance sheet with expected net debt to EBITDAX of ~0.2x at close.

• Enhances Sustainable Free Cash Flow Profile. The combined company is expected to generate significant free cash flow from its high-quality assets and disciplined capital spending across a wide range of commodity price scenarios. The combined company expects approximately $1.2B of free cash flow and a reinvestment rate below 40% in 2022 at $85/bbl WTI and $3.50/MMBtu NYMEX gas.

• Commitment to Enhanced Capital Return Program through Base Plus Variable Dividend Strategy and Share Repurchases. Shareholder returns will be central to the strategy of the combined company. During the second half of 2022, the combined company will target a return of capital program representing 60% of free cash flow. The combined company is expected to increase its aggregate base dividend at close to ~$25MM per quarter, or $0.585 per share, using variable dividends and share repurchases to return the full targeted amount. Both companies will continue their respective formally announced programs before the transaction closes. The combined company board is expected to establish a formal long-term return of capital program after close. Given the strong assets, significant free cash flow generation, capital discipline and excellent financial position of the organization, this program is expected to provide meaningful returns of capital to shareholders.

• Delivers Significant Cost Saving and Operational Synergy Opportunity. Whiting and Oasis shareholders will each benefit from the significant upside potential created from identified administrative and operational cost synergies of $65MM on an annual basis by the second half of 2023. Both companies are industry leaders in operational excellence and will combine best practices to further advance efficiencies across operating expenses and capital expenditures.

• Strong Financial Position and Relatively Unlevered Balance Sheet at Close. The combined company will have a peer-leading balance sheet with expected leverage of ~0.2x at close, including the impact of the merger consideration and special dividend. Additionally, the combined company expects to have minimal borrowings under its $900MM borrowing base, resulting in strong liquidity at close. The balance sheet is further bolstered by no near-term maturities.

• Continued ESG Commitment. Together, the combined company will continue Whiting’s and Oasis’ existing ESG efforts, including applying best practices across both companies related to safety, gas capture and emissions reduction.

Governance and Leadership

Upon closing, the Board of Directors of the combined company will consist of ten directors, comprising four independent directors from the current Whiting Board, as well as Peterson, and four independent directors from the current Oasis Board, along with Brown.

The remainder of the company’s leadership team includes Michael Lou, Oasis’ CFO, Chip Rimer, Whiting’s COO and Scott Regan, Whiting’s GC, who will serve in their respective capacities in the combined company.

Timing and Approvals

The transaction, which is expected to close in the second half of 2022, has been unanimously approved by the boards of directors of both companies. The closing of the transaction is subject to customary closing conditions, including, among others, approval by Whiting and Oasis shareholders.


Citi is serving as financial advisor and Kirkland & Ellis LLP is serving as legal advisor to Whiting. Tudor, Pickering, Holt & Co. and RBC Capital Markets LLC are serving as financial advisors and Vinson & Elkins LLP is serving as legal advisor to Oasis.


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