Whiting Petroleum Corp. isn’t confirming Wall Street talk about a sale being afoot, and an analyst at BMO Capital Markets isn’t convinced that the Denver-based Bakken Shale producer is up for sale within three months of closing a $6 billion acquisition of Kodiak Oil & Gas Corp.
Whiting's Investor Relations Director, John Kelso, told NGI's Shale Daily on Monday that the company will not comment on rumors or speculation.
BMO's Phillip Jungwirth characterized Whiting since the oil price nosedive as "underperforming," meaning he thinks "any sale needs to be at a notable premium and contain a majority stock component.
"Also, equity capital markets are welcoming, and broadly speaking, this provides less incentive for management to pursue a deal for fear of selling at the bottom," Jungwirth wrote in a March 8 analysis.
The analyst was reacting to a story in Friday's Wall Street Journal that reported not only that Whiting is "seeking a buyer," but also was in the midst of an "auction process." Whiting was also reportedly pursuing a sale in 2012.
In December, Whiting completed its acquisition of Kodiak, creating the largest Bakken/Three Forks producer (see Shale Daily, July 14, 2014). The closing of the transaction followed the issuance of a final order by the Supreme Court of British Columbia approving the arrangement on Dec. 5.
Whiting officials have characterized the transaction as enhancing the company’s “leading oil-weighted platform," and it is expected to drive production, reserve growth and operational efficiencies.
Jungwirth said that Whiting's financial position will improve in 2016 with an assumed $60/bbl price for WTI crude. Any interest in buying Whiting would likely come from larger Bakken peers that are "looking to expand their footprint in the play, and at least four companies expressed interest in acquiring Kodiak, according to the Whiting/Kodak proxy,” he said.