In the latest U.S. oil and gas merger, Chord Energy and Enerplus have agreed to combine in an approximately $11 billion stock and cash transaction, which will create a premier Williston basin-focused exploration and production company.
The combined firm will have a premier position in the Williston Basin in North Dakota and Montana with deep, low-cost inventory, around 1.3 million net acres, combined Q4 23 production of 287,000 barrels of oil equivalent per day (boepd), and enhanced free cash flow generation to return capital to shareholders, the two companies said in a joint statement.
"The combined company is expected to generate meaningful free cash flow from its low-cost asset base, improving efficiencies and disciplined capital spending through a wide range of commodity price scenarios," Chord Energy and Enerplus said.
The transaction is expected to close by the middle of 2024 and is subject to customary closing conditions in the United States and Canada, as well as the approvals by the shareholders of both companies, approvals in Canada, and regulatory clearances or approvals.
"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," Enerplus' president and CEO Ian Dundas said.
The deal is the latest in a growing list of mergers and acquisitions announced in the United States in recent months.
Consolidation in the shale industry accelerated in the second half of 2023, and it looks like 2024 will bring more of the same-mergers and acquisitions in which large companies become even larger by purchasing smaller and independent companies and their top-tier assets.
ExxonMobil, Chevron, and Occidental are some of the big names that have announced acquisitions since the fourth quarter of 2023. In one of the latest deals, Diamondback Energy agreed earlier this month to buy Endeavor Energy Resources in a $26-billion transaction.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More