Whiting Petroleum Corporation Commences Consent Solicitations and Offers to Guarantee for Kodiak Oil & Gas Corp. Senior Notes
Whiting Petroleum Corporation (NYSE:WLL) (“Whiting”) today announced, in connection with its previously announced agreement to acquire Kodiak Oil & Gas Corp. (NYSE:KOG) (“Kodiak”), that it has commenced consent solicitations to certain proposed amendments to each of the indentures (the “Indentures”) governing the following outstanding Kodiak senior notes (collectively, the “Kodiak Notes”):
|Issuer||Debt Security Description||CUSIP No.||Aggregate Principal Amount|
|Kodiak Oil & Gas Corp.||8.125% Senior Notes Due 2019||50015Q AB6||$800,000,000|
|Kodiak Oil & Gas Corp.||5.500% Senior Notes Due 2021||50015Q AF7||$350,000,000|
|Kodiak Oil & Gas Corp.||5.500% Senior Notes Due 2022||50015Q AH3||$400,000,000|
Whiting is soliciting the consent of the holders of the Kodiak Notes at the record date of 5:00 p.m., New York City time, on October 3, 2014. In order to adopt the proposed amendments to an Indenture, consents must be received from holders at the record date of the Kodiak Notes in respect of at least a majority in aggregate principal amount of Kodiak Notes outstanding under such Indenture (the “Required Consents”). If the Required Consents are obtained with respect to an Indenture and the Whiting acquisition of Kodiak is completed, Whiting will (i) issue an unconditional and irrevocable guarantee of the prompt payment, when due, of any amount owed to the holders of the Kodiak Notes under such Kodiak Notes and such Indenture and any other amounts due pursuant to such Indenture and (ii) make a payment equal to $2.50 for each $1,000 principal amount of Kodiak Notes to the holders of Kodiak Notes under such Indenture who provide valid and unrevoked consents prior to the Expiration Time (as defined below). The expiration time of the consent solicitations and offers to guarantee is 5:00 p.m., New York City time, on October 17, 2014, unless extended by Whiting in its sole discretion (such time and date, as it may be extended, the “Expiration Time”). Consents delivered may be validly revoked at any time at or prior to the earlier of (i) the Expiration Time and (ii) the time at which the Required Consents have been received.
The proposed amendments would amend the following covenants contained in the Indentures: (i) the limitation on indebtedness covenant would be amended to provide that the pro forma Fixed Charge Coverage Ratio and Adjusted Consolidated Net Tangible Assets (each as defined in each of the Indentures) financial tests be calculated based on Whiting’s consolidated financial statements instead of Kodiak’s consolidated financial statements; (ii) the limitation on restricted payments covenant would be amended to permit Kodiak to distribute the equity interests of Kodiak Oil & Gas (USA) Inc. to Whiting, as parent guarantor, or to an affiliate of Whiting that is a guarantor or co-issuer of the Kodiak Notes; (iii) the limitation on transactions with affiliates covenant would be amended to permit Kodiak and its restricted subsidiaries to engage in transactions with, and provide guarantees for the benefit of, Whiting, as parent guarantor, and any affiliate of Whiting that is a guarantor or co-issuer of the Kodiak Notes; and (iv) the financial reporting covenant would be amended to replace Kodiak’s reporting obligations with Whiting reporting obligations.
The terms and conditions of the consent solicitations and offers to guarantee are set forth in a Consent Solicitation Statement/Prospectus Supplement dated October 6, 2014, which has been filed with the Securities and Exchange Commission, and related Letter of Consent, each of which will be sent to record holders of the Kodiak Notes.
J.P. Morgan Securities LLC is the Solicitation Agent for the consent solicitations and offers to guarantee. Questions regarding the terms of the consent solicitations and offers to guarantee should be directed to J.P. Morgan Securities LLC by calling (800) 245-8812 (toll-free) or (212) 270-1200 (collect).
Global Bondholder Services Corporation is the Information Agent and Tabulation Agent for the consent solicitations and offers to guarantee. Questions concerning consent procedures and requests for copies of the Consent Solicitation Statement/Prospectus Supplement and the Letter of Consent should be directed to Global Bondholder Services Corporation by calling at (866) 470-3800 (toll-free) or (212) 430-3774 (banks and brokers).
This press release is for informational purposes only and is not an offer to purchase or sell, a solicitation of an offer to purchase or sell, or a solicitation of consents with respect to any securities. The solicitation is being made solely pursuant to the above-described Consent Solicitation/ Prospectus Supplement dated October 6, 2014 and the related Letter of Consent.
The solicitation of consents is not being made in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such solicitation under applicable state or foreign securities or “blue sky” laws.
About Whiting Petroleum Corporation
Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain and Permian Basin regions of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota, the Niobrara play in northeast Colorado and its Enhanced Oil Recovery field in Texas. The Company trades publicly under the symbol WLL on the New York Stock Exchange.
This news release contains statements that Whiting believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than historical facts, including, without limitation, statements regarding Whiting’s future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.
These risks and uncertainties include, but are not limited to: the ability to obtain shareholder and court approvals for the Whiting acquisition of Kodiak (the “Kodiak Acquisition”); the ability to complete the Kodiak Acquisition on the anticipated terms and timetable; Whiting’s and Kodiak’s ability to integrate successfully after the Kodiak Acquisition and achieve anticipated benefits from the Kodiak Acquisition; the possibility that various closing conditions for the Kodiak Acquisition may not be satisfied or waived; risks relating to any unforeseen liabilities of Whiting or Kodiak; declines in oil, natural gas liquids or natural gas prices; the level of success in exploration, development and production activities; adverse weather conditions that may negatively impact development or production activities; the timing of exploration and development expenditures; the ability to obtain sufficient quantities of carbon dioxide necessary to carry out enhanced oil recovery projects; inaccuracies of reserve estimates or assumptions underlying them; revisions to reserve estimates as a result of changes in commodity prices; impacts to financial statements as a result of impairment write-downs; risks related to the level of indebtedness and periodic redeterminations of the borrowing base under Whiting’s amended credit agreement; ability to generate sufficient cash flows from operations to meet the internally funded portion of Whiting’s and Kodiak’s capital expenditures budgets; ability to obtain external capital to finance exploration and development operations and acquisitions; federal and state initiatives relating to the regulation of hydraulic fracturing; the ability to successfully complete potential asset dispositions and the risks related thereto; the impacts of hedging on results of operations; failure of properties to yield oil or gas in commercially viable quantities; availability of, and risks associated with, transport of oil and gas; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; uninsured or underinsured losses resulting from oil and gas operations; inability to access oil and gas markets due to market conditions or operational impediments; the impact and costs of compliance with laws and regulations governing oil and gas operations; ability to replace oil and natural gas reserves; any loss of senior management or technical personnel; competition in the oil and gas industry; and other risks described under “Risk Factors” in the Consent Solicitation Statement/Prospectus Supplement dated October 6, 2014, in Whiting’s Annual Report on Form 10-K for the year ended December 31, 2013, Whiting’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, Kodiak’s Annual Report on Form 10-K for the year ended December 31, 2013 and Kodiak’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014. Whiting assumes no obligation, and disclaims any duty, to update the forward-looking statements in this press release.
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