CALGARY,
AB, July 28, 2022 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX: ERF) (NYSE: ERF) today
announced that it has entered into a definitive agreement to sell
certain Canadian assets (the "Assets") located in Alberta to Journey Energy Inc. ("Journey") for
total consideration of CDN$140
million (US$109 million),
prior to closing adjustments. Under the terms of the agreement, the
total consideration comprises cash of CDN$81
million, 3.0 million common shares in Journey valued at
CDN$14 million based on its last five
trading days volume weighted average share price, and a
CDN$45 million monthly amortizing,
interest-bearing loan which Enerplus will provide to Journey that
is secured by certain of the Assets and which must be repaid in
full by October 31, 2024.
The Assets include the Company's Ante Creek and Medicine Hat operations along with its broad
interests in the West Five and West Six areas of Alberta. Production from the Assets is
approximately 3,400 BOE per day (60% crude oil) on a net after
deduction of royalty basis (4,400 BOE per day before deduction of
royalties). The Assets include over 400 net wells.
Enerplus is continuing to advance opportunities to divest its
remaining Canadian assets in Alberta and Saskatchewan with associated production of
approximately 3,000 BOE per day (99% crude oil) on a net after
deduction of royalty basis (4,000 BOE per day before deduction of
royalties).
Proceeds from the transaction are expected to be directed to
debt reduction and enhancing Enerplus' return of capital to
shareholders. Enerplus will provide an update on its return of
capital plans with the Company's second quarter 2022 results to be
announced on August 4, 2022.
Updated guidance will also be provided with the second
quarter results announcement.
The transaction is expected to close at the end of the third
quarter of 2022, subject to customary closing conditions.
Tudor Pickering Holt & Co. and Scotiabank acted as financial
advisors to the Company with respect to the transaction.
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.
Follow @EnerplusCorp on Twitter at
https://twitter.com/EnerplusCorp.
Barrels of Oil
Equivalent
This news release 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. BOE 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.
NOTICE REGARDING INFORMATION
CONTAINED IN THIS NEWS RELEASE
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 Assets, including the terms of the transaction, estimated
consideration and terms thereof, timing of completion and expected
impacted of the sale on Enerplus' operations and financial results;
and expected usage of transaction proceeds, including with respect
to debt reduction plans and returning capital to
shareholders.
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 news 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 Assets in accordance with the terms
thereof or at all and/or failure to realize the anticipated
benefits of such sale; inability of the Company to divest its
remaining Canadian assets in Alberta and Saskatchewan on the timelines anticipated or
at all; unanticipated operating results; fluctuations in commodity
prices; 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, 2021,
management's discussion and analysis ("MD&A"), and Form 40-F at
December 31, 2021 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).
SOURCE Enerplus Corporation