Calgary-based Enerplus Corp. is selling off a small bundle of oil and natural gas interests in Montana and North Dakota for $115 million, but the Williston Basin remains a priority, the CEO said.  

Enerplus

Stakes are being sold in Montana’s Sleeping Giant field and North Dakota’s Russian Creek area of the Williston, home to the Bakken Shale. The buyer was not disclosed.

Enerplus during 2Q2021 completed its takeover of Bakken pure-play Bruin E&P Holdco LLC, It also recently built its Bakken portfolio in a deal with Hess Corp. 

The two acquisitions combined expanded the Williston portfolio by about four-fold to 296,000 acres. 

The Williston prospects being sold were unlikely to be funded, CEO Ian C. Dundas said. 

“The sale of our legacy position in Montana and the Russian Creek acreage in North Dakota, properties which were not attracting capital in our portfolio, brings significant value forward and accelerates our debt reduction plans,” Dundas noted.

In addition, the buyer agreed to provide Enerplus with up to $5 million in contingent payments if West Texas Intermediate (WTI) oil prices in 2022 are above $65/bbl in 2022 and $60-plus in 2023. 

The sale, expected to be completed by the end of October, does not include “any future drilling locations” in the identified Williston drilling inventory.

Enervus plans to use the sale in part to “achieve our C$400 million debt reduction target by the end of the first quarter of 2022, based on the current commodity price environment,” Dundas said.

Debt reduction “remains our priority.” However, around 10% of the sale proceeds are earmarked for share repurchases.

Working interest production from the stakes being sold averaged 3,000 boe/d (77% oil and natural gas liquids) in 2Q2021. Included are about 244 net wells.