There Goes The Shale M&A Bid - Whiting Petroleum Finds 'No Buyer', Forced To Issue Massive Secondary

TINA - There Is No Alternative... except when it comes to energy stocks with 1043x P/Es. Having been exuberantly chased brioefly after announcing it was looking for a buyer - fueling further excitement about a low-oil-price-driven Shale firm M&A boom - Whiting Petroleum appears to have found no buyer as it prepares for a massive 35 million share secondary dilution (and almost $2bn of new debt).

...because who doesn't wnat to buy a company whose valuation is a mere 1043x Fwd P/E...

 

 

Whiting Petroleum Announces Offering of 35,000,000 Shares of Common Stock

Whiting Petroleum Corporation (NYSE: WLL) announced today that it has commenced a registered public offering of 35,000,000 shares of its common stock. Whiting expects to grant the underwriter a 30-day option to purchase up to an additional 5,250,000 shares of its common stock.

 

Whiting also announced by separate press release that it has commenced private unregistered offerings to eligible purchasers of $1.0 billion aggregate principal amount of convertible senior notes due 2020 (or up to $1.15 billion aggregate principal amount if the initial purchasers in that offering exercise in full their option to purchase additional convertible senior notes) and $750 million aggregate principal amount of senior notes due 2023. Nothing contained herein shall constitute an offer to sell or the solicitation of an offer to buy the convertible senior notes or the senior notes.

 

Whiting expects to use the net proceeds from the offerings to repay all or a portion of the amount outstanding under its credit agreement and any remainder for general corporate purposes.

 

J.P. Morgan Securities LLC is acting as sole book-running manager for the common stock offering. The offering will be made only by means of a prospectus, forming a part of the Company's effective shelf registration statement, related prospectus supplement and other related documents.

As we asked recently... what happens if no one wants to buy them?

Two words... "massive repricing" of the entire sector.

 

And do not forget, all of these companies have massivley exaggerated oil reserve valuation levels on their balance sheets.

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We wonder - have they tried Kickstarter?