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Whiting (WLL) Strikes Deal With Creditors Over Restructuring

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Whiting Petroleum Corporation  recently entered into a restructuring support agreement with creditors of its 1.25% convertible senior notes due 2020, 5.750% senior notes due 2021, 6.250% senior notes due 2023, and 6.625% senior notes due 2026. It has also filed for Chapter 11 plan of reorganization and a related disclosure statement in the Southern District of Texas.

Per the plan, Whiting Petroleum will exchange 97% of the new equity of the reorganized company for erasure of more than $2.3 billion debt, payment or refinancing of its revolving credit facility, payment of all other secured lenders and employees, and 3% of the new equity of the reorganized company and warrants for its existing stockholders.

The reorganization program is expected to help Whiting compete in the current environment by addressing its balance sheet issues, capitalizing on the cost structure and generating sufficient liquidity in a highly capital-constrained market.

Moelis & Company (MC - Free Report) , Kirkland & Ellis LLP along with Jackson Walker, and Alvarez & Marsal are Whiting Petroleum’s financial, legal and restructuring advisors.

Earlier this month, Whiting had filed for bankruptcy as the global oil market has collapsed due to slackness in the world’s energy demand and weakness in oil prices triggered by the coronavirus pandemic and Russia-Saudi Arabia price war.

Denver-based oil producer expects to emerge from the bankruptcy protection over the next five months.

About the Company          

Founded in 1980, Denver, CO-based Whiting Petroleum is an independent energy company engaged in the exploration, development and production of crude oil and natural gas properties in the United States. With majority of its output coming from the Bakken play, it holds one of the largest acreage positions in the region. The company currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked players in the energy sector are Murphy USA Inc. (MUSA - Free Report) and Gazprom Neft OAO . Both stocks carry a Zacks Rank #2 (Buy).

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