UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2009
Whiting Petroleum Corporation
(Exact name of registrant as specified in its charter)
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| Delaware
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1-31899
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20-0098515 |
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(State or other
jurisdiction of
incorporation)
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(Commission File
Number)
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(IRS Employer
Identification No.) |
1700 Broadway, Suite 2300, Denver, Colorado 80290-2300
(Address of principal executive offices, including ZIP code)
(303) 837-1661
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §240.13e-4(c))
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| Item 2.03. |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant. |
On April 28, 2009, Whiting Petroleum Corporation (the “Company”) and its subsidiary Whiting
Oil and Gas Corporation (“Whiting Oil and Gas”) entered into a Fourth Amended and Restated Credit
Agreement with the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the various other agents party thereto (the “Credit Agreement”). The Credit Agreement replaces
Whiting Oil and Gas’ existing credit agreement. The Credit Agreement provides for a revolving
credit facility in an amount up to a borrowing base, which is $1.1 billion until November 1, 2009
with $1.042 billion of commitments as of April 28, 2009. The borrowing base under the Credit
Agreement is determined at the discretion of the lenders, based on the collateral value of the
proved reserves that have been mortgaged to the lenders, and is subject to regular redeterminations
on May 1 and November 1 of each year, as well as special redeterminations described in the Credit
Agreement, in each case which may reduce the amount of the borrowing base. A portion of the
revolving credit facility in an aggregate amount not to exceed $50 million may be used to issue
letters of credit for the account of Whiting Oil and Gas or other designated subsidiaries of the
Company. On April 27, 2009, Whiting Oil and Gas borrowed $610 million under the Credit Agreement
and had $3 million of letters of credit outstanding under the Credit Agreement, leaving $429
million of available borrowing capacity.
The Credit Agreement provides for interest only payments until April 28, 2012, when the entire
amount borrowed is due. Interest accrues at Whiting Oil and Gas’ option at either (i) a base rate
for a base rate loan plus the margin in the table below, where the base rate is defined as the
greatest of the prime rate, the federal funds rate plus 0.50% or an adjusted LIBOR rate plus 1.00%,
or (ii) an adjusted LIBOR rate for a Eurodollar loan plus the margin in the table below.
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Applicable Margin |
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Applicable Margin |
| Ratio of Outstanding Borrowings to Borrowing Base |
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for Base Rate Loans |
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for Eurodollar Loans |
Less than .25 to 1.0 |
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1.1250 |
% |
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2.00 |
% |
Greater than or equal to .25 to 1.0 but less than .50 to 1.0 |
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1.1375 |
% |
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2.25 |
% |
Greater than or equal to .50 to 1.0 but less than .75 to 1.0 |
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1.6250 |
% |
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2.50 |
% |
Greater than or equal to .75 to 1.0 but less than .90 to 1.0 |
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1.8750 |
% |
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2.75 |
% |
Greater than or equal to .90 to 1.0 |
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2.1250 |
% |
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3.00 |
% |
Under the Credit Agreement, Whiting Oil and Gas will also incur a commitment fees of 0.50% on
the unused portion of the lesser of the aggregate commitments of the lenders or the borrowing base.
The Credit Agreement contains restrictive covenants that may limit the Company’s ability to,
among other things, incur additional indebtedness, sell assets, make loans to others, make
investments, enter into mergers, enter into hedging contracts, incur liens and engage in certain
other transactions without the prior consent of the lenders. The Credit Agreement requires the
Company, as of the last day of any quarter, (i) to not exceed a total debt to EBITDAX ratio (as
defined in the Credit Agreement) for the last four quarters of 4.5 to 1.0 for quarters ending prior
to and on September 30, 2010, 4.25 to 1.0 for quarters ending December 31, 2010 to June 30, 2011
and 4.0 to 1.0 for quarters ending September 30, 2011 and thereafter, (ii) to have a consolidated
current assets to consolidated current liabilities ratio (as defined in the Credit Agreement) of
not less than 1.0 to 1.0 and (iii) to not exceed a senior secured debt to EBITDAX ratio (as defined
in the Credit Agreement) for the last four quarters of 2.75 to 1.0 for quarters ending prior to and
on December 31, 2009 and 2.5 to 1.0 for quarters ending March 31, 2010 and thereafter. Except for
limited exceptions, the Credit Agreement restricts the ability of the Company to make any dividends or distributions on its common stock or principal
payments on the Company’s senior notes.
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The obligations of Whiting Oil and Gas under the Credit Agreement are secured by a first lien
on substantially all of Whiting Oil and Gas’ properties included in the borrowing base for the
Credit Agreement. The Company and its subsidiary Equity Oil Company have guaranteed the
obligations of Whiting Oil and Gas under the Credit Agreement. The Company has pledged the stock
of Whiting Oil and Gas and Equity Oil Company as security for its guarantee, and Equity Oil Company
has mortgaged substantially all of its properties included in the borrowing base for the Credit
Agreement as security for its guarantee.
The Credit Agreement also contains customary events of default. The lenders may declare any
outstanding obligations under the Credit Agreement immediately due and payable upon the occurrence
of an event of default. In addition, the amount of any outstanding obligations under the Credit
Agreement will be immediately due and payable in the event that the Company or any of its
subsidiaries that are obligors or guarantors under the Credit Agreement becomes the subject of
voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law or becomes
unable to pay its debts generally as they become due.
The foregoing description of the Credit Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which is
filed herewith as Exhibit 4 and is incorporated herein by reference.
On April 28, 2009, the Company also issued a press release announcing that it had entered into
the Credit Agreement, a copy of which press release is filed herewith as Exhibit 99 and is
incorporated by herein by reference.
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| Item 9.01. |
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Financial Statements and Exhibits. |
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(4) |
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Fourth Amended and Restated Credit Agreement, dated as of April
28, 2009, among Whiting Petroleum Corporation, Whiting Oil and Gas Corporation,
the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent,
and the various other agents party thereto. |
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(99) |
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Press Release of Whiting Petroleum Corporation dated April 28,
2009. |
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