Through the deal, the company will add nearly 78,700 net acres of acreage in the Bakken Formation in North Dakota
Canadian oil and gas firm Enerplus has agreed to acquire Hess’ assets in the Williston Basin, US for $312m in cash.
The assets involved in the deal are Hess’ non-core interests in the Little Knife and Murphy Creek acreage in the Bakken Formation in North Dakota.
The acreage in the deal spans nearly 78,700 net acres. Located in the southernmost part of Hess’ position in the Bakken, the acreage is not connected to Hess Midstream infrastructure.
The average net production from the acreage for Hess was 4,500 barrels of oil equivalent per day (boed) in the first quarter of 2021.
Hess CEO John Hess said: “The Bakken is a core asset in our company’s portfolio.
“Sale of the Little Knife and Murphy Creek acreage – the majority of which we were not planning to drill before 2026 – brings material value forward and further strengthens our cash and liquidity position.”
For Enerplus, the acquisition provides it largely contiguous net acres in Dunn County, strategically near the company’s core position in the Bakken Formation.
The assets provide a working interest production of 6,000boed, of which 76% is tight oil, 14% is natural gas, and 10% is natural gas liquids.
Included in the assets to be acquired are 110 net tier one undrilled locations, of which 77% are operated.
Following the acquisition, Enerplus will extend its development drilling by another two or three years. The company projects to have nearly 10 years of drilling inventory under mid-single digit annual liquids production growth rates.
Apart from the tier one locations, the transaction includes 120 net operated undrilled sites, which are economically based on the present crude oil prices, said Enerplus.
Enerplus president and CEO Ian Dundas said: “These assets are a strong strategic and operational fit for Enerplus, further extending our high-return Bakken drilling inventory.
“The addition of this tier one resource into our development plan is expected to generate strong financial returns and enhance our free cash flow growth.”
The deal, which is subject to customary closing conditions, is anticipated to close next month.