Market Overview

Whiting Petroleum Slides; Offerings A Signal Buyout Is Dead

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Whiting Petroleum Corp (NYSE: WLL) shares slid 20 percent in early trading Tuesday after the company's plan for a stock offering signaled that reported efforts to seek a buyer have withered.

Whiting changed hands recently at $30.62, down $7.77 (20.2 percent).

The company had reportedly been shopped to the likes of Exxon Mobil Corp. (NYSE: XOM), Hess Corp. (NYSE: HES), but "efforts to seek a buyer have failed," Susquehanna's Biju Perincheril said in a note Tuesday.

Biju cut his target more than 7 percent to $40, citing dilution from the pending sale.

Whiting plans to sell 35 million shares in the offering, and said separately it will raise $1 billion through the sale of convertible senior notes.

The company, which operates in North Dakota's Bakken oil field, currently has 167.04 million shares outstanding.

Perincheril, who last week downgraded Whiting to Neutral when a sale began appearing unlikely, said by lowering debt, the offerings will result in "modest improvement" to the company's liquidity.

Assuming underwriters' over-allotment options are exercised, the company will raise $3.2 billion through the offering.

Perincheril expects Whiting to outspend its cash flow by $850 million this year, and by $600 million in 2016.

Latest Ratings for WLL

DateFirmActionFromTo
Jan 2020Capital One FinancialDowngradesOverweightEqual-Weight
Jan 2020Wells FargoDowngradesEqual-WeightUnderweight
Dec 2019KeyBancDowngradesOverweightSector Weight

View More Analyst Ratings for WLL
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Posted-In: Biju Perincheril SusquehannaAnalyst Color M&A News Stock Split Analyst Ratings

 

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