A Flurry Of Stories Regarding Whiting Today

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Press release:

WLL today announced that it has priced a public offering of $1.9 billion aggregate principal amount of senior notes consisting of the following:

• $1.1 billion of senior notes that mature on March 15, 2019 and bear interest at an annual rate of 5.000%, and
• $800.0 million of senior notes that mature on March 15, 2021 and bear interest at an annual rate of 5.750%.

Whiting expects to use the net proceeds from this offering to repay all of the debt outstanding under Whiting Oil and Gas Corporation’s credit agreement, to fund its $260.0 million acquisition of Williston Basin assets, to retire its $250.0 million of outstanding 7.0% Senior Subordinated Notes due 2014 on or prior to their maturity on February 1, 2014 and for general corporate purposes including capital expenditures.

I don't know much about business, but paying off a 7% loan with 5% money seems a pretty decent move.

Moody's:

Moody's Investors Service assigned a Ba2 rating to Whiting Petroleum Corporation's (Whiting) proposed $1.8 billion of senior unsecured notes. At the same time, Moody's changed the rating outlook to positive from stable. Moody's also affirmed Whiting's Ba2 Corporate Family Rating (CFR), Ba3 rated senior subordinated notes, and Speculative Grade Liquidity (SGL) rating at SGL-2.

The proceeds from the proposed notes will be used to redeem Whiting's existing $250 million senior subordinated notes on or prior to their maturity on February 1, 2014, to repay all drawings under its revolving credit facility, to fund a $260 million acquisition in the Williston Basin, and to pre-fund its capital expenditure program through 2014.

Zacks like this, too: gives WLL a "strong buy" recommendation.

The company reported earnings surprises in three out of the last four quarters with an average beat of 5.51%. The long-term expected sales growth of Whiting Petroleum is poised at a promising 20.53%. Currently, the company’s asset divestiture, strategic acquisitions and strong hedging program have placed it well in the market.

The proceeds from the sale of its Postle assets will enable the company to invest in the resource-rich Niobrara and Bakken formations thereby expanding its future growth prospects. These plays have proved to be the major drivers of production for Whiting Petroleum in the first six months of 2013.

Oil and gas players are perennially on the lookout for reserve additions. Whiting Petroleum’s recent purchase of Williston Basin assets in North Dakota and Montana has given it access to the prolific Bakken and Three Fork shale formations.

In the near term, the company is relying on the low-cost operations of its Redtail and Missouri Breaks assets in Colorado and Montana, respectively, to drive production. Moreover, planned drilling activities and superior frack design execution at the operating plays will act as tailwinds for Whiting Petroleum.

Coincidentally, earlier today, I posted some observations from Whiting's August corporate presentation.  Those observations were posted before I saw the news about Whiting's public offering announcement today.

So, $1.51 billion deal for Oasis announced this past week, and now this $1.9 billion deal announced by Whiting. Pretty soon Wall Street might sit up and take notice.