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Jan 25, 2021

Enerplus doubles down on U.S., buys North Dakota producer for US$465M

Enerplus to buy U.S. oil and gas producer for US$465M

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Enerplus Corp. is doubling down on its shift to the United States from Canada, announcing it will buy privately-held oil and gas producer Bruin E&P HoldCo LLC for US$465 million in an all-cash deal.

The deal will add about 24,000 barrels of oil equivalent (BOE) per day to Enerplus’ production out of North Dakota’s Williston Basin with Bruin’s properties near Enerplus’ current operations in the area.  The deal is expected to close in early March.

In a release, Enerplus President and Chief Executive Officer Ian Dundas highlighted the geographic proximity between the two companies as a key driver behind the deal.

"With immediately adjacent acreage offering strong operational synergies, Bruin's assets are highly complementary to our existing Tier 1 position in the Bakken and will enable us to accelerate free cash flow growth and further support our focus on providing long term sustainable shareholder returns," he said in a statement.

The American acquisition fits within a trend for Enerplus, which has been increasingly shifting its operational focus away from Canada and into the United States. Dundas has repeatedly pointed to the Canadian energy regulatory regime as a key driver of that shift. The company’s U.S. operations now account for nearly 90 per cent of its total production.

Enerplus will finance the acquisition through a new US$400 million term loan and a concurrent US$115 million bought deal offering as it sells shares for $4 apiece, a seven per cent discount to the closing price of the company's shares on Monday. Enerplus will not assume any of Bruin’s debt after the deal closes.

As a result of the deal, Enerplus raised its 2021 production forecast to as much as 108,500 BOE per day, up from the earlier view of about 86,000 BOE per day. The company also raised its full-year capital spending plan to a range of $335 million to $385 million, up from $300 million.​