US-based oil and gas company Devon Energy has plans to acquire Canadian independent oil and gas producer Enerplus, reported Reuters, citing sources familiar with the matter.
The details of Devon’s offer to acquire Enerplus, which has a market value of around $3bn, have not been disclosed.
There is no guarantee that the two companies will reach an agreement, according to sources.
Enerplus owns light oil assets in the Bakken, North Dakota, and a position in the Marcellus natural gas shale region in north-east Pennsylvania, US.
Devon anticipates the acquisition will enhance its footprint in North Dakota and diversify its operations beyond the Delaware Basin in Texas and New Mexico.
In 2022, Enerplus divested its assets in Canada to Journey Energy and Surge Energy, concentrating on its more profitable US holdings.
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By GlobalDataEnerplus generated robust cash flow and returned $307m to its shareholders last year.
The company anticipates returning around 70% of its free cash flow to shareholders through dividends and share repurchase programmes this year.
With a 3.8% stake in Enerplus, Kimmeridge Energy Management is the second-largest shareholder, according to LSEG data.
Commenting on Enerplus’ move, Kimmeridge managing partner and lead portfolio manager Mark Viviano told the media outlet: “Any potential transaction for Enerplus would need to reflect the quality of their remaining core inventory in the Bakken.”
In North Dakota, Enerplus’ operations are concentrated in the core of the Bakken/Three Forks light oil shale play. The company owns around 235,600 net acres in North Dakota.
In the Marcellus shale, Enerplus owns stakes in around 32,500 net acres across Susquehanna, Bradford, Wyoming, Sullivan and Lycoming counties.
