Chord Energy creates $11bn firm with Enerplus deal

May 2024 | DEALFRONT | MERGERS AND ACQUISITIONS

Financier Worldwide Magazine

May 2024 Issue

Continuing a surge in oil and gas dealmaking, Chord Energy Corporation is to combine with Enerplus Corporation in a stock and cash transaction valued at approximately $11bn.

Under the terms of the definitive agreement, 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 percent stock and 10 percent cash consideration.

Upon completion of the transaction – which is expected in the middle of 2024 – Chord shareholders will own approximately 67 percent of the combined company and Enerplus shareholders will own approximately 33 percent on a fully diluted basis.

An independent exploration and production company with quality and sustainable long-lived assets in the Williston Basin, a large sedimentary basin along the eastern edge of the Rocky Mountains in western North Dakota, Chord develops unconventional onshore oil-rich resources in the continental US.

“This combination further strengthens our Williston Basin position and represents a compelling opportunity for both companies’ shareholders,” said Danny Brown, president and chief executive of Chord Energy. “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,” continued Mr Brown. “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.

The transaction has been unanimously approved by the boards of directors of both companies.

“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, president and chief executive of Enerplus. “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.”

Serving as lead financial adviser to Chord is Citi, with Vinson & Elkins LLP, Wachtell, Lipton, Rosen & Katz and Goodmans LLP serving as legal advisers. Wells Fargo Securities, LLC and JP Morgan Securities LLC are acting as financial advisers.

Serving as lead financial adviser to Enerplus is Evercore, with RBC Capital Markets serving as financial adviser. Blake, Cassels & Graydon LLP and Latham & Watkins LLP are serving as legal advisers to Enerplus, with BMO Capital Markets and CIBC Capital Markets acting as co-financial advisers.

The transaction is subject to customary closing conditions in the US and Canada, as well as the approvals by Chord and Enerplus’ shareholders, 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.

Mr Brown concluded: “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.”

Fraser Tennant