Whiting Petroleum (WLL) and Kodiak Oil & Gas (KOG) announced a definitive agreement pursuant to which Whiting will acquire Kodiak in an all-stock transaction valued at $6B, based on the closing price of Whiting on July 11, and including Kodiak’s net debt of $2.2B as of March 31. Whiting’s Chairman, CEO and President James J. Volker said, "We expect the combined entity to have an initial enterprise value of $17.8B, total 2014 production of 152 thousand barrels of oil equivalent per day, and proved reserves of 606M barrels of oil equivalent, providing a leading platform for future oil-driven growth.” Volker continued, “We expect that the transaction will be accretive to Whiting’s cash flow per share, earnings per share and production per share for 2015 and increasingly accretive thereafter. Furthermore, the combined company is expected to have significant financing flexibility, with a ratio of debt to 2014E EBITDA of approximately 1.6x. Additionally, we believe the all-stock transaction structure is credit enhancing.” Under the definitive agreement, Kodiak shareholders will receive .177 of a share of Whiting stock in exchange for each share of Kodiak common stock they hold, representing consideration to each Kodiak shareholder of $13.90 per share based on the closing price of Whiting common stock on July 11, 2014. This represents a premium of approximately 5.1% to the volume weighted average price of Kodiak for the last 60 trading days. Following the transaction, shareholders of Whiting are expected to own approximately 71% of the combined company on a fully diluted basis, and shareholders of Kodiak are expected to own approximately 29%. The Boards of Directors of both companies have unanimously approved the definitive agreement, and each will recommend the approval of the transaction to its respective shareholders. Completion of the transaction is subject to the approval of both Whiting and Kodiak shareholders and certain regulatory approvals and customary conditions. The transaction is expected to close in Q414.