Each one in plain English, with the numbers worked through for a shareholder.
26 Mar 2015capital raising announcement● NeutralMajor
In March 2015 Whiting priced three offerings: 35,000,000 common shares at $29.70 (plus a 5,250,000-share option), $1.25B of 1.25% convertible notes due 2020 (the $250M option was fully exercised), and $750M of 6.25% senior notes due 2023. All were expected to close March 27, 2015. The convertible notes convert at about $39.00 per share, and the filing says the banks involved are lenders under Whiting's credit agreement and will receive their pro rata share of proceeds. The share sale dilutes existing holders; the filing does not state the use of proceeds, though repaying lenders is an inference from that statement.
Whiting reported the results of its required 101%-of-par offer to buy back Kodiak's notes after the December 2014 acquisition. Holders had tendered $2.5M of the $800M 8.125% 2019 notes, $346.1M of the $350M 5.500% 2021 notes and $399.4M of the $400M 5.500% 2022 notes. Payment is due March 6, 2015, funded by revolver borrowings, so most of the 2021 and 2022 Kodiak debt shifts to the bank facility while nearly all the 2019 notes stay outstanding.
On December 19, 2014, Whiting raised the revolver under its August 2014 credit agreement from $2.5 billion to $3.5 billion. The term loan stays up to $1.0 billion and the borrowing base stays at $4.5 billion. This enlarges the amount Whiting may borrow; the filing does not say how much is drawn.
On December 11, 2014, following the Kodiak acquisition, Whiting's 6.5% subordinated notes due 2018, 5.000% notes due 2019 and 5.750% notes due 2021 gained guarantees from Whiting Canadian Holding (the former Kodiak), Whiting Resources and Whiting US Holding. This extends more subsidiaries' backing to Whiting's existing noteholders. No new borrowing or amounts are stated.
8 Dec 2014asset acquisition disposition● NeutralMajor
The Kodiak acquisition closed on December 8, 2014: each Kodiak share became 0.177 of a Whiting share, and Whiting issued about 47.5 million shares. Whiting now guarantees Kodiak's $1.55 billion of notes, the new credit agreement took effect with $1.5 billion borrowed (about $2.0 billion of capacity left), and Kodiak's Lynn Peterson and James Catlin joined Whiting's board. Kodiak note holders can require a repurchase at 101% of principal because the deal triggered a change of control. This resolves the open closing, credit-agreement and guarantee threads, and existing holders are diluted by the new shares.
Whiting filed its final joint proxy statement for the Kodiak deal, setting special meetings for Whiting stockholders and Kodiak securityholders on December 3, 2014 (record date October 14, 2014 for Whiting). Whiting holders keep their shares, and Kodiak holders are expected to own about 29% of Whiting fully diluted as of October 24, 2014. The 0.177 ratio was worth about $10.91 per Kodiak share on October 24, 2014, versus about $13.90 on July 11, 2014. This fills in the meeting and record dates left blank in the August preliminary proxy.
Holders of Kodiak's $800M 8.125% notes due 2019, $350M 5.500% notes due 2021 and $400M 5.500% notes due 2022 gave the consents Whiting sought, and supplemental indentures were signed October 17, 2014. These add a Whiting guarantee of the Kodiak notes, but the guarantee and the indenture changes only take effect if the Kodiak acquisition completes. This means Whiting would become responsible for those notes, about $1.55 billion in principal, after closing. The filing also mentions a cash payment for consents but gives no amount.
On August 27, 2014, Whiting and Whiting Oil and Gas signed a Sixth Amended and Restated Credit Agreement with JPMorgan Chase as agent, taking effect only when the Kodiak acquisition closes and replacing the existing facility. It provides a revolver of up to $2.5 billion (maturing five years after closing) and a term loan of up to $1.0 billion (maturing December 31, 2015), under an initial $4.5 billion borrowing base, with proceeds for working capital, refinancing some Kodiak debt, deal costs and general purposes. It continues the secured first-lien structure with a parent guarantee, and requires total debt to EBITDAX of no more than 4.0 to 1.0.
Whiting filed a preliminary proxy statement for the special meeting where its shareholders will vote on issuing shares for the Kodiak deal signed July 13, 2014; Whiting's board unanimously recommends voting for it. Existing Whiting holders keep their shares, and Kodiak holders are expected to own about 29% of Whiting on a fully diluted basis, so existing holders would be diluted to that extent. The 0.177 ratio was worth about $13.90 per Kodiak share on July 11, 2014, and the filing values the deal at about $3.99 billion for fee purposes. Meeting dates and record dates are still blank.
