Pictured is Enerplus’ Fort Berthold acreage in the Williston Basin where the company’s development plan features 10 wells per spacing unit in the Middle Bakken and First Three Forks, with upside in the Second Three Forks. (Source: Enerplus Corp.)
After a year of acquisitions doubling down in the Bakken Shale, Enerplus Corp. continues to make A&D waves with another multimillion-dollar deal.
According to a company release from the Calgary, Alberta-based independent E&P company on Aug. 30, Enerplus has agreed to sell its interests in Montana’s Sleeping Giant Field and North Dakota’s Russian Creek area in the Williston Basin to an undisclosed buyer for total consideration of $115 million. In addition, Enerplus said it will also receive up to $5 million in contingent payments tied to future oil prices as part of the sale agreement.
“The sale of our legacy position in Montana and the Russian Creek acreage in North Dakota, properties which were not attracting capital in our portfolio, brings significant value forward and accelerates our debt reduction plans,” commented Ian C. Dundas, president and CEO of Enerplus, in the company release on Aug. 30.
The divestiture follows two transformative back-to-back acquisitions made by Enerplus earlier this year in the Williston Basin. Combined, the acquisitions were worth almost $800 million and quadrupled the company’s acreage footprint in the Bakke Shale play.
The first acquisition, which added 151,000 net acres from Bruin E&P Partners LLC for $465 million, closed in March. Meanwhile, Enerplus completed its second acquisition, worth $312 million and comprised of 79,000 net operated and nonoperated acres carved out of Hess Corp.’s portfolio, in April.
RELATED:
Oil and Gas Investor Enerplus CEO Q&A: Doubling Down on the Bakken
As a result of the divestiture announced Aug. 30, Dundas estimates that Enerplus will achieve the company’s $400 million debt reduction target by the end of first-quarter 2022, based on the current commodity price environment, with proceeds going directly back to its shareholders.
“While debt reduction remains our priority,” he said, “we believe our shares are trading in an attractive price range, and as a result, we plan to direct approximately 10% of the sale proceeds to incremental share repurchases.”
The sale does not include any future drilling locations in Enerplus’ identified Williston Basin drilling inventory, according to the company release.
Enerplus’ working interest production from the interests averaged roughly 3,000 boe/d (77% crude oil and NGL) in second-quarter 2021 and includes approximately 244 net wells. Estimated 2022 net operating income associated with the interests is approximately $22 million based on a $60 WTI oil price.
The sale is expected to close at the end of October, subject to customary closing conditions. The effective date of the transaction is July 1.
TD Securities (USA) LLC is the exclusive financial adviser to Enerplus on the divestiture.
Recommended Reading
Shale Outlook Permian: The Once and Future King Keeps Delivering
2025-01-11 - The Permian Basin’s core is in full-scale manufacturing mode, with smaller intrepid operators pushing the basin’s boundaries further and deeper.
Exxon: Longer Laterals, Cube Well Design Lowering Permian Costs
2024-12-11 - Exxon Mobil is boosting spending to grow global oil and gas production by 18% by 2030. U.S. rival Chevron Corp. recently said it’s cutting spending in favor of free cash flow.
Permian to Drive Output Growth as Other Basins Flatten, Decline–EIA
2025-01-14 - Lower 48 oil production from outside the Permian Basin—namely, the Bakken and Eagle Ford shales—is expected to flatten and decline in coming years, per new EIA forecasts.
CEO: Berry Gears Up for Horizontal Drilling in Uinta Stacked Pay
2024-12-13 - Berry Corp.’s legacy roots are in California’s Central Valley—but its growth engine is in Utah’s emerging Uinta Basin, CEO Fernando Araujo told Hart Energy.
More Uinta, Green River Gas Needed as Western US Demand Grows
2025-01-22 - Natural gas demand in the western U.S. market is rising, risking supply shortages later this decade. Experts say gas from the Uinta and Green River basins will make up some of the shortfall.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.