Enerplus Acquires More Marcellus, Parts With Montney Leases

Bought working interests in 17,000 net operated acres within its core Marcellus properties.

Enerplus Corp. (TSX: ERF) (NYSE: ERF) had acquired working interests in 17,000 net non-operated acres within its core Marcellus properties, the company announced Nov. 8.

The company will pay $153 million before adjustments for the acreage, which has current production of about 42 million cubic feet per day (MMcf/day).

The company is also selling its Montney interests in northeastern British Columbia for $130 million.

The acquisition in northeast Pennsylvania increases Enerplus’ working interest in existing non-operated leases. Since entering the play in 2009, well performance from the region has surpassed the company’s expectations.

“Based upon the drilling results achieved to date, we expect ultimate recoveries (EURs) of natural gas in the best areas to range from 10 billion cubic feet (Bcf) to 13.5 Bcf or higher per well,” the company said. “Close to half of the acquired leases are located in 10 Bcf or greater areas and virtually all of the value of the transaction has been attributed to these Tier 1 areas with approximately 44 net future drilling locations.”

About 60% of the total leases being acquired are held by production. Upon closing of the acquisition, Enerplus’ core Marcellus acreage will total 60,000 net acres.

The acquisition is expected to close at the end of November 2013 and will increase its 2013 exit rate guidance to 95,000 barrels of oil equivalent (BOE/d) from 88,000 BOE/d.

Enerplus’ divestment in the Montney involves 33,300 net contiguous acres with 100% working interest. The sale price works out to about $3,900 per acre. Natural gas produced in the area is predominantly dry with very little associated natural gas liquids production, Enerplus said.