Oil and gas exploration and production company Whiting Petroleum Inc. (NYSE: WLL) has emerged from bankruptcy following court approval of a plan that exchanges 97% of the company’s equity for newly issued shares. Existing shareholders will receive one new share for every 75 shares previously owned, in addition to warrants exercisable over the next four or five years.

Whiting filed a prepackaged bankruptcy deal in April after reaching an agreement in principle with some debtholders that included a restructuring of approximately $2.4 billion in debt in exchange for 97% of the new equity in the reorganized company. Existing shareholders were slated to receive 3% of the new equity (including warrants) in the reorganized company. The restructuring resulted in the elimination of about $3 billion in Whiting’s debt load.

The company reported approximately 38.1 million shares outstanding at the time of its emergence from bankruptcy protection and has authorized 500 million new shares. At the conversion rate of one-for-75, existing shareholders as a group will receive about 500,000 shares and another 3.1 million shares have been reserved for potential distribution to some unsecured claimants whose claims are still pending.

Whiting also has issued 4.8 million Series A warrants at an initial exercise price of $73.44. The offer, which expires on September 1, 2024, gives warrant holders the right to purchase one share for each warrant. Existing shareholders receive about 0.05 Series A warrants for each old share of Whiting stock.

A similar Series B warrant offering of 2.4 million warrants with an exercise price of $83.45 per share expires one year later. Existing shareholders receive about 0.03 Series B warrants for each share of old stock.

Excluding the value of the warrants, each share of new stock is valued at around $42.85. Moelis has estimated the midpoint equity value of each of the 38.1 million new shares at $27.46.

Unsecured creditors will receive new equity at a value of around $15 to $16 per share

Whiting’s existing equity was canceled before the opening bell on Wednesday, and the new shares opened at $15.00. Old Whiting shares closed at $0.57 on Tuesday. At last look, shares traded at less than $14.00.

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