Chord Energy and Enerplus Complete Combination, Creating Premier Williston-Focused E&P Company
Chord Energy and Enerplus announced the completion of their business combination, creating a premier operator in the Williston Basin with enhanced scale and financial strength. The arrangement was approved by shareholders and received court approval. Chord expects over $200MM in annual synergies, an increase from the original $150MM estimate. The combined entity, led by Chord's existing management, aims to maximize shareholder value through capital discipline and sustainable cash flow. Enerplus shareholders received Chord shares and cash, and Enerplus stock will be delisted. Updated 2024 guidance reflects the merger, with projections for oil, NGL, and natural gas volumes, as well as CapEx adjustments. The credit agreement was amended to increase the borrowing base to $3B.
- Completion of the business combination creating a premier Williston Basin operator.
- Chord expects over $200MM in annual synergies, up from the initial $150MM target.
- Enhanced scale and financial strength for the combined entity.
- Chord's management team will continue in their current roles, ensuring operational continuity.
- Enerplus shareholders received Chord shares and cash, providing immediate value.
- Projected improvements in capital efficiency and shareholder value creation post-merger.
- Updated guidance projects solid oil, NGL, and natural gas volumes for 2Q24 and 2H24.
- Amended credit agreement increased the borrowing base to $3B and elected commitments to $1.5B.
- Enerplus stock will be delisted from the NYSE and TSX, potentially impacting liquidity for former Enerplus shareholders.
- The merger involves significant integration risks, despite the anticipated synergies.
- Natural gas volumes were adjusted downward due to price-related curtailments in the Marcellus basin.
- There is uncertainty in Q3 and Q4 2024 volume projections, with expected declines in Q4.
- Capital expenditure is projected to be high, with significant investments required for the combined operations.
Insights
The combination of Chord Energy and Enerplus is a significant event in the energy sector, particularly within the Williston Basin. This merger results in an operator with enhanced scale and financial strength. The anticipated
The merger significantly shifts the dynamics within the Williston Basin, now with Chord Energy emerging as a dominant player. With a combined production capacity that includes oil, NGLs and natural gas, this positions Chord as a diversified energy producer. The de-listing of Enerplus shares from major stock exchanges consolidates investor focus on Chord. This could streamline market perception and potentially reduce uncertainty. The additional dividend declared by Enerplus prior to the merger might be seen as a sweetener, ensuring shareholder goodwill during the transition. For retail investors, the new structure promises streamlined operations and potential market share growth within the region.
From an industry perspective, the merger enhances Chord's position by integrating Enerplus's assets and expertise. The combined energy output and the focus on the Williston Basin—known for its significant shale oil reserves—underline the strategic importance of this merger. The forward-looking operational guidance suggests a robust production outlook, though it is tempered by expected declines in natural gas volumes due to price curtailments in the Marcellus basin. Over the long term, the merger's success will hinge on effective integration and realization of the projected synergies. For investors, the key metrics to watch will be the combined entity's ability to maintain and grow production volumes while effectively managing capital expenditures.
"We are excited to complete the combination with Enerplus, creating a premier
Danny Brown continued, "Chord will continue to benefit its stakeholders, including the communities in
Governance and Leadership
Effective with the closing of the Arrangement, the Board of Directors of Chord increased to 11 members, including 7 members from Chord and 4 members from Enerplus as follows:
- Susan Cunningham, Board Chair
- Daniel Brown, President & CEO
- Samantha Holroyd, Safety & Sustainability Committee Chair
- Jeffrey Sheets, Audit & Reserves Committee Chair
- Anne Taylor, Compensation & Human Resources Committee Chair
- Marguerite Woung-Chapman, Nominating & Governance Committee Chair
- Douglas Brooks
- Ian Dundas
- Hilary Foulkes
- Kevin McCarthy
- Ward Polzin
Chord's executive management team will continue in their current capacities and includes:
- Daniel Brown, President & CEO
- Michael Lou, Chief Strategy Officer & Chief Commercial Officer
- Darrin Henke, Chief Operating Officer
- Shannon
Kinney , Chief Administrative Officer, General Counsel & Corporate Secretary - Richard Robuck, Chief Financial Officer
For more information on Chord's Board of Directors and management team, please visit the Company's website at http://www.chordenergy.com/our-company/.
Share Exchange and Enerplus Additional Dividend
Pursuant to the Arrangement Agreement, by and among Chord, Enerplus and Spark Acquisition ULC, dated February 21, 2024, at closing each common share of Enerplus was exchanged for 0.10125 shares of Chord common stock and
As permitted in the Arrangement Agreement, the board of directors of Enerplus declared an additional dividend on May 23, 2024 of
Updated 2024 Outlook
The following tables provide select operational and financial guidance for 2Q24 and 2H24, respectively, to reflect the completion of the combination with Enerplus. Both Chord and Enerplus FY24 standalone liquids and capital guidance is unchanged from the outlooks issued in early May. Natural gas volumes were adjusted to reflect price related curtailments in the Marcellus basin. The guidance included below is not intended to represent actual results and remains subject to the completion of accounting, financial close and reporting processes, including but not limited to conforming Enerplus accounting policies to Chord.
2Q24 | ||||||||
Metric | Enerplus | Chord | Chord | Chord | ||||
Oil volumes (MBopd) | 51.7 – 54.7 | 97.5 – 100.5 | 149.2 – 155.2 | 115.6 – 118.6 | ||||
NGL volumes (MBblpd) | 11.3 – 12.3 | 34.0 – 35.0 | 45.3 – 47.3 | 37.9 – 38.9 | ||||
Natural gas volumes (MMcfpd) | 184.0 – 190.0 | 219.0 – 225.0 | 403.0 – 415.0 | 280.6 – 286.6 | ||||
Total volumes (MBoepd) | 93.7 – 98.7 | 168.0 – 173.0 | 261.7 – 271.7 | 199.5 – 206.1 | ||||
E&P & Other CapEx ($MM) | ||||||||
___________________
(1) Represents Enerplus standalone for the three months ended June 30, 2024.
(2) Represents Chord standalone for the three months ended June 30, 2024.
(3) Represents proforma Enerplus plus Chord for the three months ended June 30, 2024, without closing date adjustments.
(4) Represents Chord combined for the quarter ended June 30, 2024, including closing date adjustments. Includes Enerplus for the month ended June 30, 2024 and Chord for the three months ended June 30, 2024.
2H24 | ||
Metric | Chord | |
Oil volumes (MBopd) | 152.3 – 156.8 | |
NGL volumes (MBblpd) | 45.4 – 46.8 | |
Natural gas volumes (MMcfpd) | 408.0 – 418.0 | |
Total volumes (MBoepd) | 265.7 – 273.2 | |
E&P & Other CapEx ($MM) |
___________________
(1) Represents Chord combined for the 2H24 period after the closing date of the Arrangement.
Pro forma for the combination with Enerplus, Chord expects to turn-in-line ("TIL") 163 to 193 gross operated wells (~
Integration Update
Chord anticipates over
Credit Agreement Update
In connection with the closing of the Arrangement, Chord entered into an amendment to its amended and restated credit agreement on May 31, 2024, which increased the borrowing base to
About Chord Energy
Chord Energy Corporation is an independent exploration and production company with quality and sustainable long-lived assets in the
Forward-Looking Statements and Cautionary Statements
Certain statements in this press release concerning the Arrangement, including any statements regarding the results, effects, benefits and synergies of the Arrangement, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Chord's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely," "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include, but are not limited to, statements regarding Chord's plans and expectations with respect to the Arrangement and the anticipated impact of the Arrangement on the combined company's results of operations, financial position, growth opportunities and competitive position, including strategies and plans and integration. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Arrangement; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Chord and Enerplus; the effects of the business combination of Chord and Enerplus, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; the risk of changes in governmental regulations or enforcement practices; the effects of commodity prices; the risks of oil and gas activities; and the fact that operating costs and business disruption may be greater than expected following the consummation of the Arrangement. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for the combined company's operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in the definitive proxy statement filed by Chord on April 9, 2024, Chord's Annual Report on Form 10-K for the year ended December 31, 2023, and subsequent Quarterly Reports on Form 10-Q, which are on file with the Securities and Exchange Commission (the "SEC") and available from Chord's website at www.chordenergy.com under the "Investors" tab, and in other documents Chord files with the SEC and in the information circular and proxy statement filed by Enerplus on April 25, 2024 and Enerplus' annual information form for the year ended December 31, 2023, which are on file with the SEC and on SEDAR+ and available from Enerplus' website at www.enerplus.com under the "Investors" tab, and in other documents Enerplus files with the SEC or on SEDAR+.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Chord undertakes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by applicable securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Contact:
Chord Energy Corporation
Bob Bakanauskas, Managing Director, Investor Relations
(281) 404-9600
ir@chordenergy.com
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SOURCE Chord Energy Corp.
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