DENVER -- Whiting Petroleum (WLL) said Sunday it is buying Kodiak Oil & Gas (KOG) for $6 billion in stock, worth $13.90 per share, in a deal that will make it the largest producer in the booming Bakken region of North Dakota and Montana.
The combined company had more than 107,000 barrels of oil equivalent production per day in the first quarter.
The merger is meant to take advantage of cost savings through technological expertise, complementary drilling areas and better access to capital. It also provides a stronger credit profile.
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Whiting CEO James Volker said both companies' shareholders will benefit from the combination. Next year, the company is expected to produce 152,000 barrels of oil equivalent per day, he said.
The deal will increase earnings per share starting in 2015.
Kodiak shareholders will get 0.177 shares of Whiting stock for every share they hold. The value is about 5% above the average price over the last 60 trading days. After the transaction, Whiting shareholders will own about 71% of the company, while Kodiak shareholders will own about 29%.
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The deal is expected to close before the end of the year.
Whiting shares closed at $78.54 on Friday, down 1.8% from the previous close, while Kodiak shares closed down 2.3% at $14.23.