December 8, 2014 / 11:48 PM / 3 years ago

Whiting buyout of Kodiak valued at $1.55 billion

WILLISTON, N.D. (Reuters) - Whiting Petroleum Corp’s (WLL.N) buyout of Kodiak Oil and Gas Inc is worth $1.55 billion based on Monday’s closing stock price, about $2.25 billion less than when first announced last July.

The value of the all-stock deal, which pushes Whiting past Continental Resources Inc (CLR.N) to become the largest North Dakota oil producer, has dropped sharply as shares of both companies have plunged in tandem with oil prices.

As part of the deal, Whiting acquired Kodiak’s proven reserves of roughly 167 million barrels of oil equivalent for $23.77 per barrel. That is far below the current benchmark price for American crude oil CLc1, boosting the economics of the deal.

“We have a lot of financial flexibility to weather this” recent drop in oil prices, said Eric Hagen, Whiting’s vice president of investor relations.

Whiting on Monday announced the completion of the transaction and had already begun integrating the two companies, with roughly 80 percent of Kodiak’s employees joining Whiting and the remainder laid off or choosing to leave, Hagen said.

Reporting by Ernest Scheyder; Editing by Steve Orlofsky

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