Whiting Petroleum in deal talks with smaller rival Abraxas Petroleum -sources (updated)

Abraxas Petroleum

14/10/2019 22:43

(Adds context, share prices)
    By Arathy S Nair and Jessica Resnick-Ault
    Oct 14 (Reuters) - Whiting Petroleum Corp  WLL.N , an oil
and gas producer with operations in North Dakota and Colorado,
is in deal talks with San Antonio-based Abraxas Petroleum Corp
 AXAS.O , two people familiar with the matter told Reuters. 
    A deal would increase Whiting's acreage in the
second-largest U.S. shale field by output and spread its
overhead costs over greater production, according to one of the
people, who spoke on the condition of anonymity as the talks are
not yet public. 
    It was not clear what terms the companies were discussing
and there is no guarantee they will strike a deal. 
    The companies did not immediately respond to requests for
comment.
    Investors have called for change at Abraxas, an exploration
and production company operating in the Rocky Mountains, the
Permian Basin of West Texas, and in Wyoming's Powder River
Basin.
    Abraxas on Monday said it had engaged investment bank Petrie
Partners for a thorough review of its business and strategic
plans after concluding a sale of south Texas assets. The latest
review would include "potential alternative transactions that
might further enhance shareholder value." 
    This summer, Whiting announced a restructuring designed to
generate $50 million in annual cost savings and to focus on
unconventional assets.  
    Abraxas shares were up a fraction at 37 cents apiece on
Monday, giving the company a market value of $62.8 million.
Whiting shares fell 2% to $7.26 apiece and are off 68% year to
date. 

 (Reporting by Jessica Resnick-Ault and Arathy Nair; additional
reporting by Jennifer Hiller in Houston; Editing by Sandra Maler
and Tom Brown)
 ((Jessica.Resnick-Ault@thomsonreuters.com; 646-223-6052;))