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): October 15, 2010
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
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(Commission File
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(IRS Employer |
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Number)
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Identification No.) |
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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:
o Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 C.F.R. §240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 C.F.R. §240.13e-4(c))
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
On October 15, 2010, Whiting Petroleum Corporation (the “Company”) and its subsidiary Whiting
Oil and Gas Corporation (“Whiting Oil and Gas”) entered into a Fifth 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 May 1, 2011. 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. As of October 14, 2010, Whiting Oil and Gas had borrowed
$190.0 million under the Credit Agreement and had $0.4 million of letters of credit outstanding
under the Credit Agreement, leaving $909.6 million of available borrowing capacity.
The Credit Agreement provides for interest only payments until October 15, 2015, 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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0.75 |
% |
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1.75 |
% |
Greater than or equal to .25 to 1.0 but less than .50 to 1.0 |
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1.00 |
% |
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2.00 |
% |
Greater than or equal to .50 to 1.0 but less than .75 to 1.0 |
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1.25 |
% |
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2.25 |
% |
Greater than or equal to .75 to 1.0 but less than .90 to 1.0 |
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1.50 |
% |
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2.50 |
% |
Greater than or equal to .90 to 1.0 |
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1.75 |
% |
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2.75 |
% |
Under the Credit Agreement, Whiting Oil and Gas will also incur 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 the last four
quarters’ EBITDAX ratio (as defined in the Credit Agreement) of 4.25 to 1.0 for quarters ending
prior to and on December 31, 2012 and 4.0 to 1.0 for quarters ending March 31, 2013 and thereafter
and (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. Except for limited exceptions, which
include the payment of dividends on the Company’s 6.25% convertible perpetual preferred stock, the
credit agreement restricts the Company’s ability to make any dividend payments or distributions on
its common stock.
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
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Agreement. The Company has guaranteed the obligations of Whiting Oil and Gas under the Credit
Agreement and has pledged the stock of Whiting Oil and Gas 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.
Item 9.01. Financial Statements and Exhibits.
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(a) |
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Not applicable. |
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(b) |
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Not applicable. |
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(c) |
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Not applicable. |
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(d) |
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Exhibits: |
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(4) |
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Fifth Amended and Restated Credit Agreement, dated as of
October 15, 2010, 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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