Following a report in The Wall Street Journal late Sunday, Whiting Petroleum Corp. and Oasis Petroleum Inc. announced Monday they have agreed to combine in a merger of equals transaction worth $6 billion.
Whiting shareholders will receive 0.5774 shares of Oasis common stock and $6.25 in cash for each of their shares as well as a special dividend of $15 per share.
Whiting shareholders will own around 53% and Oasis shareholders will hold about 47% of the combined company on a fully diluted basis.
At closing, which is expected in the second half, Whiting president and CEO Lynn Peterson will be executive chair of the board of the combination and Oasis CEO Danny Brown will be president and CEO and a board member. The company, which will operate under a new name, will be headquartered in Houston but will keep the Denver office for now.
The companies said they will have a top Williston Basin position with assets across about 972,000 net acres, combined production of 167.8 thousand barrels of oil per day, significant scale and enhanced free cash flow generation to return to shareholders.
Scott Regan is general counsel at Whiting in Denver while Niko Lorentzatos is GC at Oasis in Houston.
Whiting used Citi as financial advisor, including Michael Shelly in Denver and Serge Tismen in New York, and Kirkland & Ellis as legal advisor.
The Kirkland team was led by corporate partners Sean Wheeler, Debbie Yee and Cephas Sekhar; tax partner David Wheat; executive compensation partner Rob Fowler and associate Karsten Busby; capital markets partners Julian Seiguer and Bryan Flannery; debt finance partners Mary Kogut and Arthur Lotz; and antitrust partner Carla Hine. Tax partner Bill Dong and associate Griffin Peeples also assisted.
Tudor, Pickering, Holt & Co. — notably former Baker Botts M&A partner Paul Perea — and RBC Capital Markets are financial advisors to Oasis and Vinson & Elkins is legal advisor.
The V&E corporate team was led by partners Dave Oelman, Steve Gill and Benji Barron with assistance from associates David Lassetter, Matt Fiorillo, Libby Gerstner and John Frey.
Assisting them were partner David D’Alessandro, counsel Dario Mendoza and associates Mary Daniel Morgan and Brian DeShannon (executive compensation/benefits); partners Ryan Carney and Lina Dimachkieh, senior associate Peter Rogers and associate Ben Livni (tax); and partner Darren Tucker (antitrust).
Also advising were partner Dave Wicklund, senior associate Caitlin Snelson and law clerk James Payne (finance); counsel Larry Pechacek (environmental); partner Suzanne Clevenger and senior associate Victoria Galvez Godfrey (regulatory); partner Jessica Peet and associate Emma Sanzotta (restructuring and reorganization) and counsel James Leader (litigation).
Baker Botts advised TPH, including corporate partner Clint Rancher and special counsel Lakshmi Ramanathan in Houston and associate Derek Gabriel in Dallas and litigation partner Danny David in Houston.
Latham & Watkins represented Citi, with a corporate deal team led by Austin partner David Miller and Houston partner Kevin Richardson with Houston associate Jordan Mack.
Mark Viviano, managing partner at private equity firm Kimmeridge Energy Management Co., which owns a 4.9% stake in Oasis, told the Journal that he supports the deal.
“We have advocated for industry consolidation as there are too many undersized and irrelevant companies drilling shale wells,” he said. “This merger of equals amongst offsetting operators will help the combined company gain operational scale, with synergies accruing to both sets of shareholders.”
Both companies filed for Chapter 11 bankruptcy after the collapse in oil prices in 2020 due to the Covid pandemic.