Whiting Petroleum Corp. said it would buy Kodiak Oil & Gas Corp.KOG +5.42% for $3.8 billion in stock 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 in the first quarter. That compares with Continental Resources Inc. output of around 97,500 barrels of oil equivalent a day in the region.
The combined company enterprise value would be $17.8 billion, with reserves of 606 million barrels of oil equivalent, including Whiting’s Colorado prospects, Whiting Chief Executive James Volker said Sunday.
The Bakken is one of North America’s most prolific shale fields. In April its output surpassed one 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 deal calls for Kodiak shareholders to receive 0.177 share in Whiting for each Kodiak share owned. That translates into the equivalent of $13.90 a share based on Whiting’s closing price on Friday—a 5.1% premium over Kodiak’s average stock price for the past two months.
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