Enerplus Acquires Williston Basin Operator Bruin E&P
TSX and NYSE-listed Enerplus Corp. has entered into a Purchase and Sale Agreement (PSA) to acquire Bruin E&P HoldCo LLC, for a total cash consideration of US$465 million. Enerplus will not assume any debt as part of the acquisition.
In July last year, Bruin E&P Partners LLC and its subsidiaries had filed a voluntary petition for relief under Chapter 11. The Joint Prepackaged Chapter 11 Plan of Reorganization of the debtors included transfer of Bruin E&P Partners’ ownership in all the assets and subsidiaries to a newly formed company, Bruin E&P HoldCo, in exchange for 100% of the limited liability company interests of Bruin E&P HoldCo. Bruin E&P Partners successfully completed its restructuring process and emerged from Chapter 11 in August 2020.
Bruin’s asset portfolio includes approximately 151,000 net acres of Williston basin properties located in North Dakota. The acreage contains an inventory of 149 gross (111 net) drilling locations, with the current production averaging around 24,000 barrels of oil equivalent per day (boe/d), of which 85% is oil.
Calgary-based Enerplus currently owns portfolio of assets in the Bakken / Three Forks formation in North Dakota and Montana, the Marcellus shale in Pennsylvania, and various crude oil waterflood properties across Alberta and Saskatchewan. The combined entity will hold approximately ~294,000 net acres of properties, with pro forma average daily production for 2021 of between 103,500 and 108,500 boe/d (62% oil).
Enerplus intends to fund the acquisition with a new US$400 million term loan facility, along with an additional C$115 million being raised via a bought deal offering of approximately 28.75 million common shares.
Stifel FirstEnergy is acting as financial advisor to Enerplus in connection with the acquisition. RBC Capital Markets and BMO Capital Markets are acting as joint bookrunners for the term loan facility.
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to be completed in early March 2021.