Canada's Enerplus to buy some of Hess' North Dakota assets

Enerplus

08/04/2021 16:37

April 8 (Reuters) - Canada's Enerplus Corp  ERF.TO  said it
would buy some assets in North Dakota's Williston Basin from
Hess Corp  HES.N  for $312 million, as improved oil price
expectations have buoyed mergers and acquisitions in North
America. 
    Canada's oil and gas sector had a record start to 2021 in
terms of mergers and acquisitions as the energy sector benefits
from a rebound in oil prices from the pandemic-led crash last
year, and as smaller companies bet on economies of scale.
    Enerplus said it will buy 78,700 net acres in North Dakota,
adjacent to its current core Bakken acreage, with about 6,000
barrels of oil equivalent per day (boepd) of working interest
production from Hess.  urn:newsml:reuters.com:*:nBw6qNNHDa
    The acquisition of largely undeveloped land has expanded
Enerplus' drilling inventory in the play by two to three years,
Scotiabank analysts wrote in a note, adding its five-year plan
to grow production modestly and emphasize free cash flow will
likely be well received by investors.
    The deal, expected to close in May, will add to Enerplus'
adjusted free cash flow per share and net asset value in the
first year, Enerplus said.
   The company raised its output guidance for the year to
between 111,000 and 115,000 boepd, from 103,500 to 108,500
boepd, due to the acquisition as well as strong operating
performance in North Dakota and higher-than-expected production
in Pennsylvania's Marcellus region. 
    It also raised its 2021 spending plans to $360 million to
$400 million from $335 million to $385 million.
    For Hess, the sale of the acreage, which it was not planning
to drill before 2026, strengthens its cash and liquidity
position. Last month, the company agreed to sell stakes in the
two Danish oilfields to chemicals and energy group INEOS for
$150 million.  urn:newsml:reuters.com:*:nL1N2LG1A5

 (Reporting by Rithika Krishna in Bengaluru; Editing by Shinjini
Ganguli)
 ((Rithika.Krishna@thomsonreuters.com;))