Whiting Petroleum Corp. and Oasis Petroleum Inc. have agreed to merge to create an oil producer with a Williston basin acreage position of 972,000 net acres across North Dakota and Montana and combined fourth-quarter 2021 production of 167,800 boe/d (3-stream, 97,300 b/d oil).
The combine will be based in Houston, retain an office in Denver "for the foreseeable future," and will operate under a new name, yet to be disclosed. Lynn Peterson, Whiting’s president and chief executive officer, will serve as executive chair of the board of the combined company. Danny Brown, Oasis’ chief executive officer, will serve as president and chief executive officer and as a member of the board.
In 2022, the combine expects to produce 164,000-169,000 boe/d and generate $1.2 billion of free cash flow and a reinvestment rate below 40% at $85/bbl WTI and $3.50/MMbtu NYMEX gas with investment of $655-695 million. The combine plans to run four rigs and target 108-110 gross operated well completions with a focus on South Nesson, Sanish, Indian Hills/City of Williston, FBIR, Foreman Butte, and Cassandra areas.
Administrative and operational cost synergies of $65 million on an annual basis are expected by second-half 2023.
Upon closing, expected in this year's second half, the board of directors will consist of 10 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’ chief financial officer, Chip Rimer, Whiting’s chief operating officer, and Scott Regan, Whiting’s general council, who will serve in their respective capacities in the combined company.
Under 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. Oasis shareholders will receive a special dividend of $15.00/share. The combined company will have an enterprise value of about $6.0 billion. Whiting shareholders will own about 53% and Oasis shareholders will own about 47% of the combined company on a fully diluted basis.