Whiting, Oasis Petroleum Become Chord Energy as Merger Closes

Whiting Petroleum Corp. and Oasis Petroleum Inc. completed the pair’s planned combination on July 1, forming Chord Energy Corp.

“We are excited to establish Chord Energy, which will build on the proud legacies and extraordinary talent and capabilities of Whiting and Oasis,” commented Danny Brown, Oasis CEO who will now lead the combined company.

In March, the two Williston Basin producers, Whiting, based in Denver, and Oasis, based in Houston, had announced an agreement to combine in a $6 billion “mergers of equals” transaction. Under the terms of the agreement, Whiting shareholders were to receive 0.5774 shares of Oasis common stock and $6.25 in cash for each share of Whiting common stock owned.

“With a premier Williston Basin position, a peer-leading balance sheet, significant scale and enhanced free cash flow generation, Chord is positioned to succeed.”—Daniel E. Brown, President and CEO, Chord Energy Corp.

Successfully combined, the new company, Chord Energy based in Houston, has a premier Williston Basin position with top tier assets across approximately 972,000 net acres and combined first-quarter production of 171,100 boe/d (historical Oasis has been adjusted for three-stream reporting). Chord’s common stock is expected to begin trading on the NASDAQ Global Select Market under the ticker symbol “CHRD” on July 5.

“With a premier Williston Basin position, a peer-leading balance sheet, significant scale and enhanced free cash flow generation, Chord is positioned to succeed,” Brown continued in his statement. “Chord will execute a focused strategy to enhance value delivery to our shareholders and maintain a strong commitment to safety, gas capture and emissions reduction.”

Chord Energy represents the joining of separate entities whose complementary strengths create something more formidable than either independent entity, according to the release. “The word ‘chord’ is frequently used to describe multiple musical notes sounded simultaneously and harmoniously, while an alternative definition is a line segment joining two points on a circle,” the company noted.

As previously announced, Chord’s executive leadership team includes:

• Danny Brown, president and CEO (previously Oasis CEO);
• Chip Rimer, executive vice president and COO (previously Whiting COO);
• Michael Lou, executive vice president and CFO (previously Oasis CFO); and
• Scott Regan, executive vice president, general counsel and secretary (previously Whiting General Counsel).

Additional members of Chord’s senior leadership team announced on July 1 include:

• Charles Ohlson, senior vice president base production;
• Richard Robuck, senior vice president corporate planning and investor relations;
• Jason Swaren, senior vice president operations;
• Jennifer Charbonneau, vice president HSE and supply chain;
• Kevin Kelly, vice president sustainability;
• Michael King, vice president asset management;
• Lara Kroll, vice president accounting; and
• Alex Wall, vice president business development.

Chord’s 10-member board of directors has equal representation from Whiting and Oasis and was selected to ensure that the Company has the right mix of skills, experience and perspectives, according to the release.

Chord board members include Lynn A. Peterson, previously Whiting’s president and CEO as executive chair, and Chord President and CEO Danny Brown. Additional board members consist o Douglas E. Brooks, Susan M. Cunningham, Samantha Holroyd, Paul J. Korus, Kevin S. McCarthy, Anne Taylor, Cynthia L. Walker and Marguerite N. Woung-Chapman.

Chord expects to realize administrative and operational cost savings of at least $65 million on an annual basis by the second half of 2023.

On July 1, the newly established company pledged to return 60% of its free cash flow to shareholders in the second half of 2022 through its base dividend, variable dividends, and share buybacks. The company noted it previously announced a $150 million share repurchase program, currently in place.

Chord is aiming to pay a base dividend of $0.585 per share beginning in the third quarter. Further, the company said it expects to use variable dividends and share repurchases to return the full targeted amount.

In conjunction with the closing of the merger, Chord also entered into an amended and restated credit facility with a borrowing base increased to $2 billion with elected commitments totaling $800 million. The lending group from the historical Oasis credit facility continues to support Chord, and Wells Fargo NA will serve as the administrative agent.

Immediately prior to the merger closing, the combined company’s bank cash balance exceeded $670 million, which is before the payment of the $6.25/share merger consideration to Whiting shareholders and a $15/share special dividend to Oasis shareholders. 

Chord’s pro forma debt consists of $400 million of senior unsecured notes outstanding with nothing drawn on the amended and restated credit facility.    

Citi was financial adviser and Kirkland & Ellis LLP is serving as legal adviser to Whiting for the merger transaction. Tudor, Pickering, Holt & Co. and RBC Capital Markets LLC are serving as financial advisers and Vinson & Elkins LLP is legal adviser to Oasis.