CALGARY - Enerplus Corporation ('Enerplus' or the 'Company') (TSX & NYSE: ERF) today announced that it has entered into a definitive agreement to acquire all of the shares of Bruin E&P HoldCo, LLC ('Bruin'), a pure play Williston Basin private company, for total cash consideration of US$465 million.
KEY HIGHLIGHTS
Core area acquisition improving scale - Acquiring 151,000 net acres in the Williston Basin, including 30,000 net acres contiguous with Enerplus' tier 1 acreage position. The acquisition includes approximately 24,000 BOE per day of existing production (working interest(1)), 84 MMBOE of proved plus probable reserves (working interest(1)), and an inventory of 149 (111 net) drilling locations (including drilled uncompleted wells). After the Acquisition, Enerplus estimates it will hold more than a decade of drilling inventory capable of sustaining production at 2021 levels, with additional drilling inventory upside on Bruin's acreage if commodity prices strengthen.
Immediately accretive to per share metrics - Expected to be materially accretive to per share metrics in the first year, including adjusted funds flow and free cash flow. Accretion to adjusted funds flow per share and free cash flow per share is expected to be approximately 30% and 80%, respectively, in the 12-month period following closing of the Acquisition, inclusive of the bought deal equity financing described below.
Enhanced value capture and free cash flow acceleration - The purchase price represents less than 3.0 times Bruin's 2021 forecast EBITDA using a US$50 per barrel WTI oil price - a discount to Enerplus' current trading metrics. Bruin's lower decline production base is expected to support strong free cash flow generation. Pro forma and based on a ten-month contribution from Bruin's assets in 2021, Enerplus expects to generate over $200 million of free cash flow in 2021 based on US$50 per barrel WTI crude oil and US$2.75 per Mcf NYMEX natural gas prices.
Maintains strong balance sheet - The pro forma business retains a solid financial position with an estimated year-end 2021 net debt to adjusted funds flow ratio at or below 1.3x on a trailing 12-month basis (inclusive of the bought deal equity financing described below), with a target of less than 1.0x over the longer term. The business will continue to have excellent liquidity and expects to be undrawn on its US$600 million bank credit facility upon the Acquisition closing.
Drives cost synergies - The enhanced operating scale and asset synergies resulting from the Acquisition are expected to drive continued efficiency gains and cost reductions supporting further cash flow improvements beyond Enerplus' current forecast. Additionally, there are no incremental general and administrative costs associated with the Acquisition.
Commitment to strong ESG performance - Enerplus will continue to pursue ESG excellence while integrating Bruin's assets and operations into its ESG initiatives. The Company will continue to work towards its longer-term goals, including a 50% reduction in GHG emissions intensity by 2030 and a 50% reduction in freshwater use per well completion by 2025.
'This acquisition demonstrates our disciplined returns-oriented focus and commitment to value creation for our shareholders,' said Ian C. Dundas, President and CEO of Enerplus. '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.'
ABOUT ENERPLUS
Enerplus is an independent North American oil and gas exploration and production company focused on creating long-term value for its shareholders through a disciplined, returns-based capital allocation strategy and a commitment to safe, responsible operations.
Currency and Accounting Principles
All amounts in this news release are stated in Canadian dollars unless otherwise specified.
Barrels of Oil Equivalent
This news release also contains references to 'BOE' (barrels of oil equivalent). Enerplus has adopted the standard of six thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl) when converting natural gas to BOEs. BOEs may be misleading, particularly if used in isolation. The foregoing conversion ratios are based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking information and statements ('forward-looking information') within the meaning of applicable securities laws. The use of any of the words 'expect', 'anticipate', 'continue', 'estimate', 'guidance', 'ongoing', 'may', 'will', 'project', 'plans', 'budget', 'strategy' and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information pertaining to the following: anticipated completion of the Acquisition and financings, including expected size, terms, timing and completion thereof; expected benefits of the Acquisition; expected impacted of the Acquisition on Enerplus' operations and financial results, including inventory of drilling locations, expected accretion to Enerplus' metrics (including expected free cash flow in 2021 and year-end net debt to adjusted funds flow ratio) and minimum rates of return; Enerplus' expected 2020 and 2021 average production volumes and expected capital levels to support such production; anticipated production mix and Enerplus' expected source of funding thereof; the proportion of Enerplus' anticipated oil and gas production that is hedged; our operating plans; oil and natural gas prices and differentials and our commodity risk management programs and anticipated impact of the Acquisition on Enerplus' future costs and expenses; plans for excess cash flow and Enerplus' ESG targets, including reduction in GHG emissions intensity and in freshwater use.
The forward-looking information contained in this news release reflects several material factors and expectations and assumptions of Enerplus including, without limitation: that the Acquisition will be completed substantially on the terms and within the timeline described in this press release; that Enerplus will realize expected benefits of the Acquisition described in this press release; that Enerplus will conduct its operations and achieve results of operations as anticipated; that Enerplus' development plans will achieve the expected results; current commodity price and cost assumptions; the general continuance of current or, where applicable, assumed industry conditions, including expectations regarding the duration and overall impact of COVID-19; the continuation of assumed tax, royalty and regulatory regimes; the accuracy of the estimates of Enerplus' reserves and resources volumes; the continued availability of adequate debt and/or equity financing, cash flow and other sources to fund Enerplus' capital and operating requirements, and dividend payments as needed; availability of third party services and the extent of its liabilities. In addition, Enerplus' 2021 outlook contained in this news release is based on the following: a WTI price of between US$50.00/bbl, a NYMEX price of US$2.75/Mcf, a Bakken crude oil price differential of US$3.25/bbl below WTI and a USD/CDN exchange rate of 1.27. Certain metrics included in this press release, including accretion to adjusted funds flow per share and free cash flow per share and net debt to trailing adjusted funds flow ratio, take into account concurrent equity offering. Enerplus believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these factors, expectations, and assumptions will prove to be correct.
The forward-looking information included in this news release is not a guarantee of future performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: failure to complete the Acquisition, at all or on terms or within the timeline described in this press release; failure by Enerplus to realize anticipated benefits of the Acquisition; changes, including future decline, in commodity prices, including as a result of continued COVID-19 pandemic; changes in realized prices for Enerplus' products; changes in the demand for or supply of Enerplus' products; unanticipated operating results, results from Enerplus' capital spending activities or production declines; curtailment of Enerplus' production due to low realized prices or lack of adequate infrastructure; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans by Enerplus or by third party operators of Enerplus' properties; increased debt levels or debt service requirements; changes in estimates of Enerplus' oil and gas reserves and resources volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; reliance on industry partners; failure to complete any anticipated acquisitions or divestitures; changes in law or government programs or policies in Canada or the United States and certain other risks detailed from time to time in Enerplus' public disclosure documents (including, without limitation, those risks identified in its AIF, management's discussion and analysis ('MD&A'), and Form 40-F at December 31, 2019 and management's discussion and analysis for the third quarter of 2020) as it may be updated from time to time by current reports on Form 6-K, all of which are available, as applicable, on SEDAR website at www.sedar.com, on the SEC's website at http://www.sec.gov and on Enerplus' website).
The purpose of our estimated free cash flow disclosure, is to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes. Information in this press release is provided as of the date hereof and Enerplus assumes no obligation to update any forward-looking statements, unless otherwise required by law.
Contact:
Tel: 1-800-319-6462
ENERPLUS CORPORATION 
