Whiting Petroleum Corp (NYSE:WLL) announced over the weekend that it was acquiring Kodiak Oil & Gas Corp (NYSE:KOG) for $3.8 billion in an all-stock transaction. The deal creates the largest crude-oil producer in the most productive U.S. shale area as oil companies jockey to gain rights to the remaining drilling opportunities.

Whiting Petroleum

Under the terms of the deal, Kodiak Oil & Gas Corp (NYSE:KOG) stockholders will receive 0.177 of a Whiting Petroleum Corp (NYSE:WLL) share for each Kodiak share they own, which is the equivalent of $13.90 based on the acquirer’s price on July 11th, according to a statement released Sunday, July 13th. The deal is valued at around $6 billion when you count in $2.2 billion in debt.

The deal moves Whiting Petroleum Corp (NYSE:WLL) ahead Harold Hamm’s Continental Resources, Inc. (NYSE:CLR) as the number one player in the Bakken shale in the northern Great Plains.

Statement from Whiting CEO

“This is the right deal, at the right time,” James Volker, Whiting’s chairman and chief executive officer, elaborated in a telephone interview on Sunday. “It massively enhances the scale of the two companies combined.”

“It’s going to allow our production at the combined company to grow faster than Whiting standalone did before,” he continued. It should be noted that Whiting Petroleum Corp (NYSE:WLL) is buying a company that more than doubled production last year while its own growth slowed as costs to bring new wells into production increased dramatically.

Deal valuation

The per-share price of the transaction represents a 5.1% premium to Kodiak’s volume-weighted average over the past 60 days.

Furthermore, an enterprise value for Kodiak Oil & Gas Corp (NYSE:KOG) of $6 billion comes out to around 8.8 times 2013 earnings before interest, taxes, depreciation and amortization. That outs this deal on the low side of recent deals, given the median EBITDA for U.S. oil and exploration deals since 2009 valued at more than $1 billion is 11.6, according to Bloomberg financial data.

Odd timing

Not all analysts are impressed with the deal. The decision by Kodiak Oil & Gas Corp (NYSE:KOG) to sell now is “curious,” Tim Rezvan, a New York-based analyst for Stern Agee & Leache Inc., said in a note to clients published Monday. He says it’s possible that a second-quarter earnings miss by Kodiak might explain the sale. There has been no announcement from Kodiak regarding the date for the release of second-quarter results.