CALGARY, AB, Aug. 30, 2021 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX: ERF) (NYSE: ERF) today
announced that it has entered into a definitive agreement to sell
its interests in the Sleeping Giant field (Montana) and Russian Creek area (North Dakota) in the Williston Basin (the "Interests") for total
consideration of US$115 million. In
addition, Enerplus will receive up to US$5
million in contingent payments if the WTI oil price averages
over $65 per barrel in 2022 and over
$60 per barrel in 2023. The effective
date of the transaction is July 1,
2021.
The sale consists of the Company's Interests in the developed
Sleeping Giant field in Montana
and the southernmost portion of Enerplus' North Dakota position in the Russian Creek
area. The Interests do not include any future drilling locations in
Enerplus' identified Williston
Basin drilling inventory. Enerplus' working interest(1)
production from the Interests averaged approximately 3,000 BOE per
day (77% crude oil and natural gas liquids) in the second quarter
of 2021 and includes approximately 244 net wells. Estimated 2022
net operating income associated with the Interests is approximately
US$22 million based on a US$60 WTI oil price.
"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," said
Ian C. Dundas, President and CEO.
"We now estimate that we will achieve our $400 million debt reduction target by the end of
the first quarter of 2022, based on the current commodity price
environment. While debt reduction remains our priority, 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 is expected to close at the end of October 2021, subject to customary closing
conditions.
TD Securities (USA) LLC acted
as the exclusive financial advisor to Enerplus on this
divestiture.
Footnotes:
|
(1)
|
Production is stated
on a working interest basis before deduction of
royalties.
|
About Enerplus
Enerplus is an independent North American oil and gas
exploration and production company focused on creating long-term
value for its shareholders through a disciplined, returns-based
capital allocation strategy and a commitment to safe, responsible
operations. For more information, visit the Company's website at
www.enerplus.com.
Currency
All amounts in this news release are
stated in Canadian dollars unless otherwise specified.
Barrels of Oil Equivalent
This news release also
contains references to "BOE" (barrels of oil equivalent). Enerplus
has adopted the standard of six thousand cubic feet of gas to one
barrel of oil (6 Mcf: 1 bbl) when converting natural gas to BOEs.
BOEs may be misleading, particularly if used in isolation. The
foregoing conversion ratios are based on an energy equivalency
conversion method primarily applicable at the burner tip and do not
represent a value equivalency at the wellhead. Given that the value
ratio based on the current price of oil as compared to natural gas
is significantly different from the energy equivalent of 6:1,
utilizing a conversion on a 6:1 basis may be misleading.
FORWARD-LOOKING INFORMATION AND
STATEMENTS
This news release contains certain
forward-looking information and forward-looking statements
("forward-looking information") within the meaning of applicable
securities laws. The use of any of the words "expect", "believe",
"estimate", "will", "plan", "strategy" and similar expressions are
intended to identify forward-looking information. In particular,
but without limiting the foregoing, this news release contains
forward-looking information pertaining to the following: proposed
disposition of the Company's interests in the Sleeping Giant field
and Russian Creek acreage in the Williston Basin, including the terms,
estimated consideration, timing of completion and expected impacted
of the sale on Enerplus' operations and financial results; expected
usage of sale proceeds, including with respect to debt reduction
plans and targets and share repurchases; and anticipated
contingency payments in connection with such sale.
The forward-looking information contained in this news
release reflects several material factors and expectations and
assumptions of Enerplus including, without limitation: that the
transaction will be completed substantially on the terms and within
the timeline described in this press release; that we will conduct
our operations and achieve results of operations as anticipated;
estimated commodity prices; and the general continuance of
current or, where applicable, assumed industry conditions.
The forward-looking information included in this news release
is not a guarantee of future performance and should not be unduly
relied upon. Such information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information including, without limitation: failure
to complete the sale of the interests in the Williston Basin in accordance with the terms
thereof or at all and/or failure to realize the anticipated
benefits of such sale; unanticipated operating results; and certain
other risks detailed from time to time in Enerplus' public
disclosure documents (including, without limitation, those risks
identified in its annual information form for the year ended
December 31, 2020, management's
discussion and analysis ("MD&A"), and Form 40-F at December 31, 2020 as it may be updated from time
to time by current reports on Form 6-K, all of which are available,
as applicable, on SEDAR website at www.sedar.com, on the SEC's
website at http://www.sec.gov and on Enerplus' website).
NON-GAAP MEASURES
In this news release,
Enerplus utilizes the term "net operating income" which it believes
is useful to investors and securities analysts in evaluating
operating performance of crude oil and natural gas assets. Net
operating income is calculated as crude oil, natural gas liquids
and natural gas sales less royalties, production taxes, operating
expenses and transportation expenses. This measure does not have a
standardized meaning or definition as prescribed by U.S. GAAP and,
therefore, may not be comparable with the calculation of similar
measures by other entities.
SOURCE Enerplus Corporation