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All Hail Whiting Petroleum, the New King of the Bakken

NEW YORK (TheStreet) --  Whiting Petroleum (WLL - Get Report) plans to buy peer Kodiak Oil & Gas (KOG), which will make it the king of the prolific Bakken Shale formation.

The acquisition will boost Whiting's production and reserves, which is why the company believes the deal will have a positive impact on cash flow, earnings and production per share starting next year.

The deal shows Whiting's resolve to play a central role in the rise of the Bakken formation as North America's leading shale field in terms of barrels-per-well.

Investors showed their delight, pushing Whiting's shares over 7% higher to $84, up 36% for the year to date.

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Kodiak Oil and Gas, like Whiting, is a Rocky Mountain-focused exploration and production company. The deal is valued at $6 billion.

The combined company will be the biggest producer and leaseholder at the Bakken formation, surpassing Continental Resources (CLR) and Exxon Mobil (XOM), respectively. The new company will have 855,000 net acres, daily production of more than 107,000 barrels of oil equivalents and a massive inventory of more than 3,400 net future drilling locations.

In the previous quarterly results, Continental Resources produced more than 152,000 barrels of oil equivalents per day, of which 64%, or nearly 97,400 barrels of oil equivalents, came from Bakken.

Whiting CEO James Volker said the new company will have an enterprise value of $17.8 billion and an oil-weighted reserve base of more than 600 million barrels of oil equivalents. The transaction is expected to close in the final quarter of this year. Whiting and Kodiak's shareholders will own 71% and 29% of the new company, respectively.

Kodiak's reserves have been growing at an average rate of 147% per year since 2009 to 167.3 million barrels of oil equivalents by the end of 2013. Meanwhile, its sales have grown from just 601 barrels in 2009 to 29,200 barrels of oil equivalents per day by the end of last year.

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