CALGARY, AB – 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.
Production is stated on a working interest basis before deduction of royalties.