Creating a Scaled Unconventional U.S. Oil
Producer with a Premier Williston Basin Acreage Position Totaling
972K Net Acres and Combined 4Q21 Production of 167.8 Thousand
Boepd
Transaction Accretive to Key Per-share Metrics
While Maintaining a Strong, Relatively Unlevered Pro Forma Balance
Sheet at Close
Combined Company to Benefit from Significantly
Enhanced Operating Scale and Free Cash Flow; Expect to Deliver
Sustainable Dividends and Attractive Returns to Shareholders
Transaction Expected to Generate Administrative
and Operational Cost Synergies of Approximately $65MM Annually
Progressive ESG Profile with Top Tier Gas
Capture Track Record in North Dakota
Lynn Peterson to Serve as Executive Chair of
the Board; Danny Brown to Serve as President and CEO
Companies to Host Conference Call Today at 8:30
a.m. ET (7:30 a.m. CT)
The sell-side dial-in phone number for the conference call
should read: 1-877-328-5506 (instead of 1-877-382-5506).
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220307005443/en/
The updated release reads:
WHITING AND OASIS TO COMBINE IN $6.0 BILLION
MERGER OF EQUALS TRANSACTION
Creating a Scaled Unconventional U.S. Oil
Producer with a Premier Williston Basin Acreage Position Totaling
972K Net Acres and Combined 4Q21 Production of 167.8 Thousand
Boepd
Transaction Accretive to Key Per-share Metrics
While Maintaining a Strong, Relatively Unlevered Pro Forma Balance
Sheet at Close
Combined Company to Benefit from Significantly
Enhanced Operating Scale and Free Cash Flow; Expect to Deliver
Sustainable Dividends and Attractive Returns to Shareholders
Transaction Expected to Generate Administrative
and Operational Cost Synergies of Approximately $65MM Annually
Progressive ESG Profile with Top Tier Gas
Capture Track Record in North Dakota
Lynn Peterson to Serve as Executive Chair of
the Board; Danny Brown to Serve as President and CEO
Companies to Host Conference Call Today at 8:30
a.m. ET (7:30 a.m. CT)
Whiting Petroleum Corporation (NYSE: WLL) (“Whiting”) and Oasis
Petroleum Inc. (NASDAQ: OAS) ("Oasis") today 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 $15.00 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 Mr. 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.”
Mr. 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 Mr. Peterson,
and four independent directors from the current Oasis Board, along
with Mr. 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.
Advisors
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.
Conference Call and Additional Materials
Whiting and Oasis will hold a joint conference call today, March
7, 2022 at 8:30 a.m. Eastern Time / 7:30 a.m. Central Time to
discuss the transaction. An investor presentation regarding the
transaction can also be found at www.whiting.com and
www.oasispetroleum.com.
Investors, analysts and other interested parties are invited to
listen to the webcast: Date: Monday, March 7, 2022 Time: 8:30 a.m.
Eastern Time / 7:30 a.m. Central Time Pre-registration link:
https://dpregister.com/sreg/10164478/f1e3f0537c Live Webcast:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=gwcvNTyw
Sell-side analysts wishing to ask a question may use the
following dial-in: Dial-in: 1-877-328-5506 Intl. Dial-in:
1-412-317-5422 Website: www.whiting.com and
www.oasispetroleum.com
A recording of the conference call will be available beginning
approximately two hours after the call on the day of the call and
will be available until Monday, March 14, 2022 by dialing: Replay
dial-in: 1-877-344-7529 Intl. replay: 1-412-317-0088 Replay access:
6137428
The call will also be available for replay until March 14, 2022
at www.whiting.com and www.oasispetroleum.com.
About Whiting
Whiting, a Delaware corporation, is an independent oil and gas
company engaged in the development, production and acquisition of
crude oil, NGLs and natural gas primarily in the Rocky Mountains
region of the United States. The Company’s largest projects are in
the Bakken and Three Forks plays in North Dakota and Montana. The
Company trades publicly under the symbol WLL on the New York Stock
Exchange. For further information, please visit
http://www.whiting.com.
About Oasis
Oasis is an independent exploration and production company with
quality and sustainable long-lived assets in the Williston Basin.
Oasis is uniquely positioned with a best-in-class balance sheet and
is focused on rigorous capital discipline and generating free cash
flow by operating efficiently, safely and responsibly to develop
its unconventional onshore oil-rich resources in the continental
United States. For more information, please visit the Company's
website at www.oasispetroleum.com.
Forward-Looking Statements
Certain statements in this document concerning the transaction,
including any statements regarding the expected timetable for
completing the transaction, the results, effects, benefits and
synergies of the transaction, future opportunities for the combined
company, future financial performance and condition, guidance and
any other statements regarding Whiting’s and Oasis’ future
expectations, beliefs, plans, objectives, financial conditions,
assumptions or future events or performance that are not historical
facts are “forward-looking” statements based on assumptions
currently believed to be valid. Forward-looking statements are all
statements other than statements of historical facts. The words
“anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,”
“estimate,” “probable,” “project,” “forecasts,” “predict,”
“outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,”
“may,” “might,” “anticipate,” “likely” “plan,” “positioned,”
“strategy,” and similar expressions or other words of similar
meaning, and the negatives thereof, are intended to identify
forward-looking statements. Specific forward-looking statements
include statements regarding Whiting’s and Oasis’ plans and
expectations with respect to the transaction and the anticipated
impact of the transaction on the combined company’s results of
operations, financial position, growth opportunities and
competitive position. The forward-looking statements are intended
to be subject to the safe harbor provided by Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934 and the Private Securities Litigation Reform Act of
1995.
These forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from those anticipated, including, but not limited to, the
possibility that shareholders of Oasis may not approve the issuance
of new shares of Oasis common stock in the transaction or that
shareholders of Whiting may not approve the merger agreement; the
risk that a condition to closing of the transaction may not be
satisfied, that either party may terminate the merger agreement or
that the closing of the transaction might be delayed or not occur
at all; potential adverse reactions or changes to business or
employee relationships, including those resulting from the
announcement or completion of the transaction; the diversion of
management time on transaction-related issues; the ultimate timing,
outcome and results of integrating the operations of Whiting and
Oasis; the effects of the business combination of Whiting and
Oasis, including the combined company’s future financial condition,
results of operations, strategy and plans; the ability of the
combined company to realize anticipated synergies in the timeframe
expected or at all; changes in capital markets and the ability of
the combined company to finance operations in the manner expected;
regulatory approval of the transaction; the effects of commodity
prices; the risks of oil and gas activities; and the fact that
operating costs and business disruption may be greater than
expected following the public announcement or consummation of the
transaction. Expectations regarding business outlook, including
changes in revenue, pricing, capital expenditures, cash flow
generation, strategies for our operations, oil and natural gas
market conditions, legal, economic and regulatory conditions, and
environmental matters are only forecasts regarding these
matters.
Additional factors that could cause results to differ materially
from those described above can be found in Whiting’s Annual Report
on Form 10-K for the year ended December 31, 2021, as amended by
Amendment No. 1 thereto, which is on file with the Securities and
Exchange Commission (the “SEC”) and available from Whiting’s
website at www.whiting.com under the “Investor Relations” tab, and
in other documents Whiting files with the SEC; and in Oasis’ Annual
Report on Form 10-K for the year ended December 31, 2021, which is
on file with the SEC and available from Oasis’ website at
www.oasispetroleum.com under the “Investor Relations” tab, and in
other documents Oasis files with the SEC.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
Neither Whiting nor Oasis assumes any obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required
by federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised
against placing undue reliance on such statements.
No Offer or Solicitation
Communications in this news release do not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy any
securities or a solicitation of any vote or approval with respect
to the proposed transaction or otherwise, nor shall there be any
sale, issuance or transfer of securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
Additional Information and Where You Can Find It
In connection with the proposed transaction, Whiting and Oasis
intend to file materials with the SEC, including a Registration
Statement on Form S-4 of Oasis (the "Registration Statement") that
will include a joint proxy statement/prospectus of Whiting and
Oasis. After the Registration Statement is declared effective by
the SEC, Whiting and Oasis intend to mail a definitive proxy
statement/prospectus to the shareholders of Whiting and the
shareholders of Oasis. This news release is not a substitute for
the joint proxy statement/prospectus or the Registration Statement
or for any other document that Whiting or Oasis may file with the
SEC and send to Whiting’s shareholders and/or Oasis' shareholders
in connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS OF WHITING AND OASIS ARE URGED TO CAREFULLY AND THOROUGHLY
READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION
STATEMENT, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME, AND OTHER RELEVANT DOCUMENTS FILED BY WHITING AND OASIS WITH
THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT WHITING, OASIS, THE PROPOSED
TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
Investors will be able to obtain free copies of the Registration
Statement and joint proxy statement/prospectus, as each may be
amended from time to time, and other relevant documents filed by
Whiting and Oasis with the SEC (when they become available) through
the website maintained by the SEC at www.sec.gov. Copies of
documents filed with the SEC by Whiting will be available free of
charge from Whiting’s website at www.whiting.com under the
“Investor Relations” tab or by contacting Whiting’s Investor
Relations Department at (303) 837-1661 or BrandonD@whiting.com.
Copies of documents filed with the SEC by Oasis will be available
free of charge from Oasis’ website at www.oasispetroleum.com under
the “Investor Relations” tab or by contacting Oasis’ Investor
Relations Department at (281) 404-9600 or
ir@oasispetroleum.com.
Participants in the Solicitation
Whiting, Oasis and their respective directors and certain of
their executive officers and other members of management and
employees may be deemed, under SEC rules, to be participants in the
solicitation of proxies from Whiting’s shareholders and Oasis’
shareholders in connection with the transaction. Information
regarding the executive officers and directors of Oasis is included
in its definitive proxy statement for its 2021 annual meeting filed
with the SEC on March 18, 2021. Information regarding the executive
officers and directors of Whiting is included in its definitive
proxy statement for its 2021 annual meeting filed with the SEC on
March 29, 2021. Additional information regarding the persons who
may be deemed participants and their direct and indirect interests,
by security holdings or otherwise, will be set forth in the
Registration Statement, joint proxy statement/prospectus and other
materials when they are filed with the SEC in connection with the
transaction. Free copies of these documents may be obtained as
described in the paragraphs above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220307005443/en/
Whiting Brandon Day Investor Relations Manager (303)
837‑1661 Brandond@whiting.com
Oasis Bob Bakanauskas Director, Investor Relations (281)
404-9600 ir@oasispetroleum.com
Whiting Petroleum (NYSE:WLL)
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