(Adds context, share prices)
By Arathy S Nair and Jessica Resnick-Ault
Oct 14 (Reuters) - Whiting Petroleum Corp, an oil and gas producer with operations in North Dakota and Colorado, is in deal talks with San Antonio-based Abraxas Petroleum Corp , two people familiar with the matter told Reuters.
A deal would increase Whiting's acreage in the second-largest U.S. shale field by output and spread its overhead costs over greater production, according to one of the people, who spoke on the condition of anonymity as the talks are not yet public.
It was not clear what terms the companies were discussing and there is no guarantee they will strike a deal.
The companies did not immediately respond to requests for comment.
Investors have called for change at Abraxas, an exploration and production company operating in the Rocky Mountains, the Permian Basin of West Texas, and in Wyoming's Powder River Basin.
Abraxas on Monday said it had engaged investment bank Petrie Partners for a thorough review of its business and strategic plans after concluding a sale of south Texas assets. The latest review would include "potential alternative transactions that might further enhance shareholder value."
This summer, Whiting announced a restructuring designed to generate $50 million in annual cost savings and to focus on unconventional assets.
Abraxas shares were up a fraction at 37 cents apiece on Monday, giving the company a market value of $62.8 million. Whiting shares fell 2% to $7.26 apiece and are off 68% year to date. (Reporting by Jessica Resnick-Ault and Arathy Nair; additional reporting by Jennifer Hiller in Houston; Editing by Sandra Maler and Tom Brown)