The Assets include the Company's Ante Creek and Medicine Hat operations along with its broad interests in the West Five and West Six areas of Alberta
Enerplus announces sale of certain Canadian assets. (Credit: John R Perry from Pixabay)
Enerplus Corporation (“Enerplus” or the “Company”) (TSX: ERF) (NYSE: ERF) today announced that it has entered into a definitive agreement to sell certain Canadian assets (the “Assets”) located in Alberta to Journey Energy Inc. (“Journey”) for total consideration of CDN$140 million (US$109 million), prior to closing adjustments. Under the terms of the agreement, the total consideration comprises cash of CDN$81 million, 3.0 million common shares in Journey valued at CDN$14 million based on its last five trading days volume weighted average share price, and a CDN$45 million monthly amortizing, interest-bearing loan which Enerplus will provide to Journey that is secured by certain of the Assets and which must be repaid in full by October 31, 2024.
The Assets include the Company’s Ante Creek and Medicine Hat operations along with its broad interests in the West Five and West Six areas of Alberta. Production from the Assets is approximately 3,400 BOE per day (60% crude oil) on a net after deduction of royalty basis (4,400 BOE per day before deduction of royalties). The Assets include over 400 net wells.
Enerplus is continuing to advance opportunities to divest its remaining Canadian assets in Alberta and Saskatchewan with associated production of approximately 3,000 BOE per day (99% crude oil) on a net after deduction of royalty basis (4,000 BOE per day before deduction of royalties).
Proceeds from the transaction are expected to be directed to debt reduction and enhancing Enerplus’ return of capital to shareholders. Enerplus will provide an update on its return of capital plans with the Company’s second quarter 2022 results to be announced on August 4, 2022. Updated guidance will also be provided with the second quarter results announcement.
The transaction is expected to close at the end of the third quarter of 2022, subject to customary closing conditions.
Tudor Pickering Holt & Co. and Scotiabank acted as financial advisors to the Company with respect to the transaction.
Source: Company Press Release