Enerplus Acquires Bakken Assets from Hess
NYSE and TSX-listed Enerplus Corp. has entered into a definitive agreement with New York-based Hess Corp. to acquire certain Bakken formation assets in the Williston basin North Dakota, for a total consideration of US$312 million, subject to customary purchase price adjustments.
The assets cover approximately 78,700 net contiguous acres in the Little Knife and Murphy Creek areas of Dunn County, and are located strategically adjacent to Enerplus’ core Bakken position. The acreage includes 230 net undrilled inventory locations primarily focused on the Middle Bakken formation, with additional development potential in the Three Forks formation. The assets include operated and non-operated interests, with other operators including Exxon Mobil Corp., Continental Resources Inc., ConocoPhillips, and Marathon Oil Corp.
Total proved plus probable (2P) reserves attributable to the assets (as of March 1st, 2021) is estimated to be around 62.7 million barrels of oil equivalent (MMboe), and production currently averages around 6,000 barrels of oil equivalent per day (boe/d), 76% of which is tight oil.
“These assets are a strong strategic and operational fit for Enerplus, further extending our high-return Bakken drilling inventory. The addition of this tier one resource into our development plan is expected to generate strong financial returns and enhance our free cash flow growth,” said Ian C. Dundas, President & CEO of Enerplus.
“The Bakken is a core asset in our company’s portfolio. Sale of the Little Knife and Murphy Creek acreage – the majority of which we were not planning to drill before 2026 – brings material value forward and further strengthens our cash and liquidity position,” added John Hess, Hess’s CEO.
Stifel FirstEnergy and BMO Capital Markets are advising Enerplus on the deal.
The transaction, which is subject to customary closing conditions, is expected to close in May 2021 and has an effective date of March 1st, 2021.