Chord Energy and Enerplus merge to form a $11 billion powerhouse
Investing.com | Author Vahid Karaahmetovic
Published Feb 22, 2024 06:29AM ET
Chord Energy (CHRD) and Enerplus (ERF) merge to form a $11 billion powerhouse
Chord Energy (CHRD) announced on Wednesday its plans to acquire Canadian energy firm Enerplus (NYSE:ERF), in a deal that will create a new entity focused on the Williston basin with an enterprise value of $11 billion.
This acquisition, which comes as part of a broader trend of consolidation within the U.S. oil and gas sector, is set to establish one of the leading operators in the Williston basin, located in North Dakota, featuring approximately 1.3 million net acres and producing around 287,000 barrels of oil equivalent per day.
ERF shares popped over 12% in premarket trading while CHRD gained 1.3%.
Under the terms of the agreement, Enerplus shareholders are to receive 0.10125 shares of Chord common stock plus $1.84 in cash for each Enerplus common share they hold.
Based on Chord's closing price on the announcement day, the equity value of the transaction is calculated to be around $3.8 billion.
"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 CEO.
“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,” he added.
The companies anticipate that the synergies realized post-merger, on an after-tax present value basis, will surpass $750 million.
Chord Energy is expected to issue approximately 20.7 million shares of its common stock as part of the deal, which is expected to be completed by mid-2024.
Following the merger, Chord's shareholders will retain a 67% stake in the newly combined entity, with the remainder held by Enerplus's shareholders.
The combined company will be led by Brown.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.