Oasis Petroleum Inc. and Whiting Petroleum Corp., two of North Dakota's largest shale producers, will merge in a $6 billion deal, the companies said on Monday.
The deal between the rivals comes amid record high crude prices and will make them a leading player in North Dakota.
Both companies filed for Chapter 11 bankruptcy protection in 2020 after the energy industry reeled under an unprecedented crash in oil prices due to the coronavirus pandemic, with Whiting the first publicly traded shale producer to file for bankruptcy when it did so in April of that year.
Shares in the companies were rising even before the market opened after Reuters and the Wall Street Journal reported Sunday that a merger was pending. Sources told the Journal the combined value of the companies would be $6 billion.
The combined shale oil and natural gas company will be based in Houston and will have a new name that has not yet been chosen, the companies said.
The combined entity will have a premier Williston Basin position in North Dakota and Montana with top-tier assets spread across about 972,000 net acres and a combined production of 167.8 thousand barrels of oil equivalent per day, the companies said.
"We have advocated for industry consolidation as there are too many undersized and irrelevant companies drilling shale wells," Mark Viviano, managing director of Kimmeridge Energy Management Co., which owns a 5% stake in Oasis, told the Wall Street Journal. "This merger of equals amongst offsetting operators will help the combined company gain operational scale, with synergies accruing to both sets of shareholders."
Under the terms of the deal, Whiting shareholders will receive 0.5774 shares of Oasis common stock and $6.25 in cash for each share held, giving the merger an equity value of $3.52 billion.
