The purchase will form the largest producer  and the second-biggest leaseholder in the Bakken shale and Three Forks oil region of North Dakota, which has become the second-most important state in the union for oil output after Texas, with production topping 1 million barrels a day in April.

The deal is expected to close in the fourth quarter of 2014 and has been approved by the boards of directors of both companies. The purchase price includes Kodiak’s net debt of $2.2 billion.

“The addition of Kodiak’s complementary acreage position,” James Volker, chairman and CEO of Whiting, said in a statement. “And substantial inventory of high return drilling locations will provide the opportunity to drive significant value growth for both Whiting and Kodiak shareholders through an acceleration in drilling and increase in operational efficiencies.”

The two Denver-based companies will form a Bakken shale powerhouse with nearly 3,500 net future drilling locations across 855,000 acres in North Dakota, South Dakota and Montana.

The combined company is expected to have an initial enterprise value of $17.8 billion and total 2014 production is slated to reach 152,000 barrels of oil equivalent per day.

Whiting said it expected the transaction to be accretive to per-share earnings and cash flow from 2015 and that it would give the company a stronger credit profile due to the increased size and scale. A merged Whiting-Kodiak has a borrowing base on $4.5 billion with an existing $3.5 billion of commitments.

Whiting is confident the ratings agencies will bestow an enhanced credit rating to the combined company, management said on a conference call discussing the deal.

Kodiak shareholders will receive 0.177 of a share of Whiting stock in exchange for each share of Kodiak common stock, equalling $13.90 per share based on Whiting’s closing price of $78.54 on Friday.