2010-09-22-2010-09-22-2010-10-18

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
456MM
Description

Acquired 46,500 net acres targeting Bakken and Three Forks formation in Fort Berthold area of ND, gaining 800 BO/d, 10 MMBOE proved in Bakken.

Enerplus Resources Fund, Calgary, (Toronto: ERF-UN, NYSE: ERF) has closed its purchase of 46,500 net acres targeting the Bakken and Three Fork formations in the Fort Berthold area of North Dakota for C$456 million.

KeyBanc Capital Markets analyst Mitchell Wurschmidt has identified the buyer as privately held, Durango, Colo.-based Peak Energy Resources LLC, funded by Yorktown Energy Partners.

The assets include 72 sections in Dunn and McKenzie counties. Production is approximately 8,000 barrels of oil per day. Proved and probable reserves from the assets' Bakken formation are 10 million barrels of oil equivalent.

Enerplus now has have more than 70,000 net acres (109 sections) in the Fort Berthold area, the majority of which will be operated by Enerplus with a greater than 90% working interest. Enerplus will have a total of more than 210,000 net acres of potential Bakken and Three Forks acres in North Dakota and Saskatchewan. Production is now 4,000 barrels per day.

Enerplus president and chief executive Gordon Kerr says, "We have made tremendous progress on our strategy this year. We have invested over $1.3 billion in two of the best resource plays in North America, the Bakken light crude oil play and the Marcellus shale gas play, expanding our portfolio and significantly improving the future growth prospects of Enerplus."

Wurschmidt estimates Enerplus paid $9,806 per net acre, $45.60 per barrel equivalent for the proved and probable reserves, and $570,000 per barrel equivalent per day for the production.

"Considering only (Kodiak Oil & Gas Corp.'s) total acreage position of 55,400 net acres in the Bakken/Three Forks play, we estimate the Enerplus/Peak transaction represents a roughly 22% premium to KOG's closing price as of yesterday. The deal also implies higher valuation metric for production. The deal would be even more accretive when including the proceeds raised from the recent equity offering by KOG, given its net cash position."