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WHITING PETROLEUM: Unsecureds Projected Recovery Under Plan at 39%

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The Whiting Petroleum Corporation, et al., filed a Plan and a Disclosure Statement on June 29, 2020.

Between the Petition Date and April 23, 2020, the Debtors and their advisors engaged in negotiations with the Ad Hoc Committee of Noteholders regarding the documentation of the Restructuring Support Agreement and Plan contemplated thereby. On April 23, 2020, the Debtors entered into the Restructuring Support Agreement with certain Consenting Creditors, subject, as to the Debtors, to Bankruptcy Court approval, which is anticipated to be granted at Confirmation.

As of June 29, 2020, holders of 44.7% of the Senior Notes and at least 12.0% of the Convertible Notes have executed the Restructuring Support Agreement or have informally indicated that they support the Plan. The “settlement” referred to in the Plan and Disclosure Statement generally refers to the agreement by the Holders of Senior Notes Claims to equitize their debt pursuant to the Plan and to otherwise agree to the various compromises and resolutions of these Chapter 11 Cases embodied in the Plan.

The material terms of the Plan and Restructuring Support Agreement are as follows:

* Holders of Allowed RBL Claims shall, in full and final satisfaction of such Allowed RBL Claim, receive, at the option of each Holder: (a) if such Holder votes to accept the Plan and elects to participate in the Exit Facility, its Pro Rata share of: (i) the Exit Facility Revolving Loan Commitments; and (ii) the Exit Facility Effective Date Cash Amount; or (b) if such Holder does not vote to accept the Plan (including by voting against the Plan or failing to timely return a ballot) or does not elect to participate in the Exit Facility (including by not making any election with respect to the Exit Facility on the ballot), its Pro Rata share of the Exit Facility Term Loans. For the avoidance of doubt, in either case, contingent or unasserted indemnification or reimbursement obligations under the RBL Credit Agreement shall remain in full force and effect to the maximum extent permitted by applicable law and shall not be discharged, impaired, or otherwise affected by the Plan;

* Holders of Allowed General Unsecured Claims shall receive their pro rata share of 97% of the equity of the Reorganized Debtors (subject to dilution by the New Common Stock to be issued pursuant to the New Warrants-A, the New Warrants-B, and the Management Incentive Plan); provided that if either Class 3 or Class 5 vote to reject the Plan, each Holder of an Allowed General Unsecured Claim shall receive, in full and final satisfaction of such Allowed General Unsecured Claim, its Pro Rata share of 100% of the New Common Stock, subject to dilution by the New Common Stock to be issued pursuant to the Management Incentive Plan;

* To the extent that Class 3 and Class 5 vote to accept the Plan, Holders of Allowed Existing Interests shall receive (i) their Pro Rata share of 3% of the equity in the Reorganized Debtors (subject to dilution by the New Common Stock to be issued pursuant to the New Warrants-A, the New Warrants-B, and the Management Incentive Plan), (ii) warrants to purchase up to 10% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-A Agreement, and (iii) warrants to purchase up to 5% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-B Agreement; provided that if either Class 3 or Class 5 vote to reject the Plan, Holders of Allowed Existing Interests shall receive no distribution; and

* To the extent that Class 3 and Class 5 vote to accept the Plan, Holders of Allowed Section 510(b) Claims shall receive (i) their Pro Rata share of 3% of the equity in the Reorganized Debtors (subject to dilution by the New Common Stock to be issued pursuant to the New Warrants-A, the New Warrants-B, and the Management Incentive Plan), (ii) warrants to purchase up to 10% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-A Agreement, and (iii) warrants to purchase up to 5% of the New Common Stock (subject to dilution only by the New Common Stock issued pursuant to the Management Incentive Plan) on the terms and conditions set forth in the New Warrants-B Agreement; provided that if either Class 3 or Class 5 vote to reject the Plan, Holders of Allowed Section 510(b) Claims shall receive no distribution.

Class 3 RBL Claims are projected to total $914,186,000. In full and final satisfaction of such Allowed RBL Claim, each Holder of an Allowed RBL Claim shall receive, at the option of each Holder: (a) if such Holder votes to accept the Plan and elects to participate in the Exit Facility, its Pro Rata share of: (i) the Exit Facility Revolving Loan Commitments and (ii) the Exit Facility Effective Date Cash Amount; or (b) if such Holder does not vote to accept the Plan (including by voting against the Plan or failing to timely return a ballot) or does not elect to participate in the Exit Facility (including by not making any election with respect to the Exit Facility on the ballot), its Pro Rata share of the Exit Facility Term Loans. For the avoidance of doubt, in either case, contingent or unasserted indemnification or reimbursement obligations under the RBL Credit Agreement will remain in full force and effect to the maximum extent permitted by applicable law and shall not be discharged, impaired, or otherwise affected by this Plan.

Class 4 Trade Claims are projected to total $9,480,000.

Class 5 General Unsecured Claims totaling $2,578,625,000 will recover 39%.

Class 8 Existing Interests — 92,522,059 shares — will each receive a pro rata share of approximately $48 million in value. To the extent Class 3 and Class 5 vote to accept the Plan, each Holder of an Allowed Existing Interest shall receive its Pro Rata6 share of (i) the Existing Interests Equity Pool, (ii) the New Warrants-A, and (iii) the New Warrants-B; provided that if either Class 3 or Class 5 vote to reject the Plan: Holders of Allowed Existing Interests in Class 8 shall receive no distribution.

A full-text copy of the Disclosure Statement dated June 29, 2020, is available at https://tinyurl.com/y99nca6r from PacerMonitor.com at no charge.

Co-Counsel to the Debtors:

Matthew D. Cavenaugh
Jennifer F. Wertz
Veronica A. Polnick
JACKSON WALKER L.L.P.
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
Email: mcavenaugh@jw.com
jwertz@jw.com
vpolnick@jw.com

– and –

Brian E. Schartz, P.C.
Anna Rotman, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
609 Main Street
Houston, Texas 77002
Telephone: (713) 836-3600
Facsimile: (713) 836-3601
Email: brian.schartz@kirkland.com
anna.rotman@kirkland.com

Gregory F. Pesce
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
Email: gregory.pesce@kirkland.com

– and –

Stephen E. Hessler, P.C.
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: stephen.hessler@kirkland.com

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the United States. Its largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado. Whiting Petroleum trades publicly under the symbol WLL on the New York Stock Exchange.

Whiting Petroleum and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32021) on April 1, 2020. At the time of the filing, the Debtors disclosed $7,636,721,000 in assets and $3,611,750,000 in liabilities. Judge David R. Jones oversees the cases.

The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis International, LLP and Jackson Walker L.L.P. as legal counsel; Moelis & Company as investment banker; Alvarez & Marsal as financial advisor; Stretto as claims and solicitation agent, and administrative advisor; and KPMG LLP US as tax consultant.

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