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  • Chord Energy and Enerplus to Combine in $11 Billion Transaction Creating Premier Williston-Focused E&P Company with Top-Tier Shareholder Returns
    édité le 01/03/2024 - Plus de news de "Chord Energy" - Voir la fiche entreprise de "Chord Energy"

Chord Energy and Enerplus to Combine in $11 Billion Transaction Creating Premier Williston-Focused E&P Company with Top-Tier Shareholder Returns
Chord Energy Corporation and Enerplus Corporation announced they have entered into a definitive arrangement agreement under which Chord will combine with Enerplus in an approximately $11 billion stock and cash transaction. The combined company will have a premier Williston Basin position with deep, low-cost inventory, approximately 1.3 million net acres, combined 4Q23 production of 287 MBoepd, and enhanced free cash flow generation to return capital to shareholders.

Under the terms of the transaction, each common share of Enerplus will be exchanged for 0.10125 shares of Chord common stock and $1.84 per share in cash, representing 90% stock and 10% cash consideration. Upon completion of the transaction, Chord shareholders will own approximately 67% of the combined company and Enerplus shareholders will own approximately 33% on a fully diluted basis. The combined company's enterprise value of approximately $11 billion is inclusive of Enerplus' net debt, based on the transaction exchange ratio, and the closing share prices for Chord and Enerplus as of February 20, 2024.

"This combination further strengthens our Williston Basin position and represents a compelling opportunity for both companies' shareholders," said Danny Brown, Chord Energy's President and Chief Executive Officer. "Enerplus' Williston Basin position brings high-quality inventory, and we are excited to leverage best practices from both companies to create a stronger, more efficient entity. The combined company is expected to benefit from improving returns, capital efficiency, low-cost inventory, and a peer-leading balance sheet, all of which support sustainable free cash flow generation and meaningful shareholder returns. This is also a great opportunity for the employees and stakeholders of both Chord and Enerplus, as we believe the combined company will continue to benefit the communities in which we operate in North Dakota and Montana, including the Fort Berthold Reservation. We look forward to working closely with Enerplus to ensure that the full potential of this combination is realized for the benefit of all of our stakeholders."

"This transaction brings together Chord's and Enerplus' premier asset bases, operational abilities and technical acumen to create a combined company positioned to drive further success, deliver competitive returns and peer-leading shareholder distributions," said Ian Dundas, Enerplus' President and Chief Executive Officer. "Joining forces with Chord will provide Enerplus shareholders with immediate value for their investment and the opportunity to participate in the future upside potential from ownership in the stronger, larger company with enhanced shareholder returns. I want to thank our employees for their dedication and hard work over the years that has allowed us to build such a great organization and reach this exciting milestone."

Combined Company Positioned to Drive Value Through Commodity Cycles

  - Enhances Williston Basin Position with Increased Scale. The combined company is expected to be a premier operator in the Williston Basin, with approximately 1.3 million net acres (98% Williston) and 4Q23 production of 287 MBoepd (over 90% Williston). Oil is expected to be approximately 56% of the combined company's production, supporting peer-leading EBITDA margins.

  - Adds Significant High-Quality Inventory. The combined company is expected to benefit from an enhanced inventory position, increasing its sub $60 WTI breakeven inventory by over 60%, improved returns and resilient free cash flow through commodity cycles. The pro forma inventory supports approximately 10 years of development at the current pace and expands the company's opportunities for three-mile lateral development.

  - Accretive to All Financial Metrics. The transaction is expected to be accretive to all metrics, including: i) cash flow per share, ii) free cash flow per share, iii) net asset value and iv) return of capital. Significant synergies allow for additional potential accretion in 2025 and beyond.

  - Delivers Significant Cost Saving and Synergy Opportunities. The combined company expects to benefit from administrative, capital and operating synergies of up to $150 million per year. Administrative synergies are expected to begin immediately in 2024 and increase in 2025 up to $40 million. Capital synergies are expected to increase up to $55 million during 2025, and operating synergies initiate in 2025 and are expected to increase up to $55 million in 2026. The combined company will leverage best practices to further advance efficiencies across the business. The after-tax present value of synergies is expected to exceed $750 million.

  - Supports Top-Tier Shareholder Returns. The combined company is expected to generate meaningful free cash flow from its low-cost asset base, improving efficiencies and disciplined capital spending through a wide range of commodity price scenarios. The combined company is expected to generate approximately $1.2 billion of free cash flow with a reinvestment rate of approximately 51% in 2024 at $79/bbl WTI and $2.50/MMBtu NYMEX gas. Post-closing Chord is expected to maintain its peer-leading return of capital framework at 75%+ of free cash flow through base and variable dividends and share repurchases.

  - Creates Stronger Financial Position and Relatively Unlevered Balance Sheet. The combined company is expected to have an improved credit profile and cost of capital, with a strong balance sheet with expected leverage of ~0.2x at close.

  - Continued ESG Commitment. The combined company will maintain and build upon its commitment to ESG and sustainability excellence and capitalize on combined best practices.

Transaction Details

Under the terms of the agreement, Enerplus shareholders will receive 0.10125 shares of Chord common stock and $1.84 in cash for each common share of Enerplus owned at closing. Based on the closing price as of close February 20, 2024, the implied value to each Enerplus share is $18.42. At this exchange ratio, and the respective companies' closing share prices on February 20, 2024, the combined company would have an enterprise value of approximately $11 billion. Chord will issue approximately 20.7 million shares of common stock in the transaction as stock consideration to the holders of Enerplus common shares in accordance with the terms of the arrangement agreement.

It is anticipated that the quarterly dividend payments made by Enerplus until closing of the transaction will be equalized to those made by Chord, after giving effect to the exchange ratio, through an additional Enerplus dividend declared shortly prior to the closing.

The transaction will be structured as a plan of arrangement under the Business Corporations Act (Alberta) and is subject to the approval of (i) at least two-thirds of the votes cast by holders of Enerplus common shares at a meeting to be called to consider the transaction and (ii) if required under applicable Canadian securities laws, a majority of the votes cast by Enerplus shareholders at such meeting (excluding the votes held by Enerplus shareholders whose votes are required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Securities Holders in Special Transactions). The issuance of shares of Chord common stock is subject to the approval of the majority of votes cast by holders of shares of Chord common stock in connection with the transaction, pursuant to the rules of the NASDAQ.

Governance and Leadership

Following close of the transaction, the board of directors of the combined company will increase to 11 members and will initially comprise seven representatives from Chord and four representatives from Enerplus, including Ian Dundas, who will also serve as Advisor to the CEO of Chord.

Danny Brown will serve as Director, President and Chief Executive Officer of the combined company. The remainder of the company's leadership team will include Michael Lou, Chord's Chief Financial Officer, Darrin Henke, Chord's Chief Operating Officer and Shannon Kinney, Chord's General Counsel, who will continue to serve in their respective capacities in the combined company.

Timing and Approvals

The combination has been unanimously approved by the boards of directors of both companies. The transaction is expected to close by mid-year 2024. The transaction is subject to customary closing conditions in the United States and Canada, as well as the approvals by Chord and Enerplus' shareholders described above, the approval of the Court of King's Bench of Alberta, the listing of shares of Chord's stock to be issued in the transaction on NASDAQ and regulatory clearances or approvals.

Further information regarding the transaction will be contained in a management information circular that Enerplus will prepare, file and mail to Enerplus shareholders in advance of its shareholder meeting and a proxy statement that Chord will file with the SEC and mail to Chord stockholders in advance of its stockholder meeting. Copies of the arrangement agreement and management information circular will be available on Enerplus' profile on SEDAR+ at and the arrangement agreement and proxy statement will be available on the SEC's website at under Chord's profile.

Commitment to ESG

Chord remains committed to continuous improvement across its business, including its environmental footprint. Please refer to the Chord website ( and the Enerplus website ( for ESG disclosure and reporting. Enerplus published it latest ESG report in June 2023.

About Chord Energy

Chord Energy Corporation (NASDAQ: CHRD) is an independent exploration and production company with quality and sustainable long-lived assets in the Williston Basin. The Company is uniquely positioned with a best-in-class balance sheet and is focused on rigorous capital discipline and generating free cash flow by operating efficiently, safely and responsibly to develop its unconventional onshore oil-rich resources in the continental United States.

About Enerplus

Enerplus (TSX: ERF) (NYSE: ERF) 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.

Origine : Communiqué Chord Energy

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