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Whiting Petroleum to offer 35 mln shares to reduce debt

(Adds debt offering, context on Oasis; updates stock)

By Ernest Scheyder

WILLISTON, N.D., March 23 (Reuters) - Whiting Petroleum Corp , the largest North Dakota oil producer, said on Monday it would sell 35 million shares of common stock to help pare debt from its December buyout of rival Kodiak Oil & Gas.

The offering, as well as a $1.75 billion debt issuance, may signal the company is not seeking to sell itself outright, as the cost of an acquisition would rise exorbitantly.

The stock and debt raisings also give Whiting breathing room to clean up its balance sheet and weather the low oil-price environment.

Talk had swirled in recent weeks that the company was considering a full sale, a strategy that many investors had decried, though sources said it was not in the cards.

The Kodiak deal swelled the company's debt load to $5.63 billion, a level that was increasingly uncomfortable as Whiting's shares fell more than 60 percent in tandem with oil prices.

In offering stock, Whiting follows the path of fellow North Dakota producer Oasis Petroleum Inc, which last month said it would issue 25 million shares and repay debt.

Despite cheap oil, Whiting's chief executive, Jim Volker, vowed to Wall Street analysts last month to keep pushing down the costs of drilling and fracking new wells, forecasting a 6 percent rise in production this year.

Shares of Whiting fell 12 percent to $33.78 in after-hours trading after the offering was announced. Stock offerings tend to be unpopular with existing shareholders as their effective stake in a company is diluted.

JPMorgan is running the company's stock offering.

Hedge fund Paulson & Co is Whiting's largest shareholder.

(Reporting by Ernest Scheyder; Editing by Terry Wade and Leslie Adler)