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January 26, 2021updated 27 Jan 2021 10:56am

Canadian operator Enerplus acquires Bruin E&P for $465m

Canadian oil and gas operator Enerplus has announced its full acquisition of Bruin E&P for $465m.

By Matt Farmer

Canadian oil and gas operator Enerplus has announced its full acquisition of Bruin E&P for $465m.

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Enerplus owns several significant leases in the Fort Berthold area of North Dakota, US. Bruin also owns stakes in the area, with 30,000 net acres lying adjacent to Enerplus ’ stakes. Bruin has another 121,000 acres of leases in the Williston Basin, across North Dakota.

The acquired leases produce 24,000 barrels of oil equivalent (BOE) per day, composed of 72% tight oil, 14% natural gas liquids, and 14% natural gas. The reserves hold total proved and “probable” reserves of 84 million BOE.

An Enerplus statement says that the company estimates it could continue its 2021 rate of production for more than ten years with the new acquisitions.

Credit: CNW Group/Enerplus

Enerplus president and CEO said Ian Dundas said: “This acquisition demonstrates our disciplined returns-oriented focus and commitment to value creation for our shareholders. With immediately adjacent acreage offering strong operational synergies, Bruin’s assets are highly complementary to our existing tier one 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.”

Bruin emerged from Chapter 11 bankruptcy proceedings in August 2020, with CEO Matt Steele describing the process as “efficient and uncontentious”. The company underwent a restructuring as part of this, including installing a new board of directors.

Subject to closing conditions, the deal will occur early in March 2021.

Following the announcement, the company’s stock jumped up by 14% in after hours trading. At the same time, Enerplus also announced the issuing of new shares. This caused trading to return to normal levels when the market reopened.

The company expects the acquisition to increase its free cash flow within the first year. In a statement, the company said it expects free cash flow per share to increase by 80% in the 12 months following the deal’s close. In 2021, this would mean a $200m increase based on $50 per barrel WTI prices.

Enerplus will fund the deal with a three-year $400m loan from RBC Capital Markets and BMO Capital Markets . It will also make use of $115m in purchased deal equity financing. However, the company will not take any of Bruin’s debt as part of the transaction.

Stifel FirstEnergy acted as financial advisor for the deal, with Vinson & Elkins and Black Cassels & Graydon acting as legal advisors. Tudor, Pickering, Holt & Co., and TD Securities were the strategic advisors.

The announcement came with the company’s preliminary annual results, which showed average production of 90,700 BOE per day in 2020. This came with $291m of capital spending across the year. With the Bruin acquisition, it aims to increase this to approximately 105,000 BOE per day, with approximately two-thirds as liquids.

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Free Report
img

2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
Enter your details here to receive your free Report.

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