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U.S. shale producers Oasis, Whiting to merge in $6 billion deal

Published 03/07/2022, 07:40 AM
Updated 03/07/2022, 08:26 AM
© Reuters. FILE PHOTO: A brand new oil production facility owned by Oasis Petroleum in the Permian Basin oil and natural gas production area near Wink, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford
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(Reuters) -Oasis Petroleum Inc and Whiting Petroleum (NYSE:WLL) Corp will merge in a $6 billion deal including debt, the U.S. shale oil and gas producers said on Monday.

The deal between the companies, which had filed for Chapter 11 bankruptcy in 2020 following a crash in energy prices due to the pandemic, comes amid record high crude prices.

Reuters on Sunday reported about their impending merger, citing a source familiar with the matter.

Shares in Oasis rose 6.2%, while Whiting Petroleum climbed 6% in premarket trade.

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.

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.

Upon completion of the deal, which is expected in the second half of 2022, Whiting shareholders will own about 53% and Oasis shareholders will own about 47% of the combined company on a fully diluted basis.

Oasis shareholders will also receive a special dividend of $15 per share once the deal is closed.

© Reuters. FILE PHOTO: A brand new oil production facility owned by Oasis Petroleum in the Permian Basin oil and natural gas production area near Wink, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford

Whiting Chief Executive Offer Lynn Peterson will serve as Executive Chair of the Board of the combined company while Oasis CEO Danny Brown will become the top boss.

Brent crude soared to near $130 a barrel on Monday, its highest since 2008, as the United States and European allies mull a Russian oil import ban and delays in the potential return of Iranian crude to global markets fuel tight supply fears. [O/R]

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