Kodiak Oil & Gas Corp. (NYSE: KOG) reports that its securityholders have approved the proposals relating to an arrangement agreement with Whiting Petroleum Corp. (NYSE: WLL) and a wholly owned subsidiary of Whiting (Whiting Canadian Sub), under which Whiting Canadian Sub will acquire all of the outstanding common shares of Kodiak in exchange for common shares of Whiting. On July 13, Whiting and Kodiak entered into a definitive agreement pursuant to which Whiting will acquire Kodiak in an all-stock transaction.
At a special meeting held Dec. 3, Kodiak shareholders and securityholders voted on and approved a resolution with respect to the arrangement, and Kodiak shareholders voted on and approved a resolution with respect to the continuance of Kodiak from Yukon Territory to British Columbia; and, on a nonbinding, advisory basis, the compensation that may be paid or become payable to Kodiak's named executive officers in connection with the arrangement.
Kodiak will apply for a final order of the Supreme Court of British Columbia for approval of the arrangement on Dec. 4. Assuming receipt of court approval and the satisfaction or waiver of all other conditions to closing, Kodiak expects the arrangement to close on Dec. 8.
Separately, also in a special meeting held Dec. 3, Whiting Petroleum Corp. stockholders overwhelmingly approved the issuance of Whiting common stock required for Whiting to acquire Kodiak in an all-stock transaction. Approximately 78.5% of the outstanding shares of Whiting common stock voted, and, of those outstanding shares that voted, 98.8% voted in favor of the issuance of common stock to acquire Kodiak.
Regarding the agreement, Wunderlich Securities analysts commented, “Given that the deal is an all-stock transaction for the equity, with WLL also assuming the debt, the deal price remains at a valid market valuation in these tough times; and, in our view, the combination of the two remains a very smart move that adds nice value to WLL as the larger, more financially viable company with a strong balance sheet should see multiple expansion in the future as it executes like its larger (and higher valued) peers.
“The strong liquidity position provides ample strength and optionality. Whiting arranged to expand its credit facility to $3.5 billion alongside the announcement of this deal, easily allowing it to not only absorb the outstanding balance of KOG's credit facility but also potentially fund any of the KOG bonds that are put to the company going forward. Further, these moves should not impact the company's activity level going forward given the strong balance sheet Whiting continues to utilize.”