HOUSTON and CALGARY, AB - Chord Energy Corporation (NASDAQ: CHRD) and Enerplus Corporation (TSX: NYSE:ERF) (NYSE: ERF) have announced an agreement to merge in a transaction valued at approximately $11 billion. The deal, which includes stock and cash considerations, will result in a combined entity with significant operations in the Williston Basin, boasting a joint production of 287,000 barrels of oil equivalent per day (Boepd) as of the fourth quarter of 2023.
The terms of the arrangement will see Enerplus shareholders receive 0.10125 shares of Chord common stock and $1.84 in cash for each Enerplus share. Post-merger, Chord shareholders will own about 67% of the new company, with Enerplus shareholders holding the remaining 33%. The combined company\'s enterprise value includes Enerplus\' net debt and is based on the closing share prices as of February 20, 2024.
Danny Brown, President and CEO of Chord Energy, will lead the merged company, while Ian Dundas, President and CEO of Enerplus, will serve as an advisor to the CEO and join the board along with three additional Enerplus directors. The combined company is expected to realize up to $150 million in annual cost synergies, with an after-tax present value of these synergies estimated to exceed $750 million.
The merger is anticipated to be immediately accretive to key financial metrics, including cash flow per share and free cash flow per share, among others. The combined entity aims to maintain a strong balance sheet with low leverage and is committed to returning capital to shareholders, with an expected free cash flow of $1.2 billion in 2024.
Both companies have emphasized their commitment to environmental, social, and governance (ESG) excellence and the adoption of best practices from each organization. The transaction, already approved by both boards of directors, is expected to close by mid-year 2024, subject to shareholder and regulatory approvals.
The announcement of the merger coincides with a joint conference call hosted by the companies to discuss the transaction. This news is based on a press release statement and does not include personal opinions or speculative commentary.
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