Chord Energy and Enerplus seal $11bn merger to dominate Williston Basin

Chord Energy Corporation (NASDAQ: CHRD) and Enerplus Corporation (TSX: ERF) (NYSE: ERF) have successfully completed a landmark merger, valued at approximately $11 billion, making a bold move in the energy sector. This strategic alliance is set to redefine the landscape of the Williston Basin, where the newly combined entity will now control an impressive 1.3 million net acres, with oil constituting about 56% of its total production.

Strategic Implications of the Merger

This merger is poised to create a leading operator in the Williston Basin, leveraging both companies’ strengths to enhance operational efficiencies and financial performance. The deal, initially announced in February 2024, received approval from the shareholders of both Chord and Enerplus in May 2024 and was ratified by the Court of King’s Bench of Alberta on May 28, 2024. The combined company expects to produce around 287 thousand barrels of oil equivalent per day (MBoepd) and anticipates peer-leading EBITDA margins due to its enhanced scale and low-cost inventory.

Chord Energy and Enerplus complete a landmark $11 billion merger, establishing a dominant force in the Williston Basin and setting new standards in the energy sector.

Financial and Operational Synergies

The merger brings together Chord’s and Enerplus’s complementary assets, with Chord shareholders owning approximately 67% and Enerplus shareholders about 33% of the new entity. This arrangement underscores a shared commitment to capital discipline and the generation of sustainable free cash flow, projecting annual synergies of over $200 million—a significant increase from the initial estimate of $150 million.

Danny Brown, President and CEO of Chord Energy, expressed his satisfaction with the merger’s progress: “We are excited to complete the combination with Enerplus, creating a premier Williston Basin operator… We are leveraging best practices from both companies to create a stronger, more efficient organization.”

Future Prospects and Market Positioning

The merger is not merely a financial transaction but a strategic enhancement that promises to improve the combined entity’s market standing, inventory quality, and development opportunities. It is also expected to be accretive to key financial metrics such as cash flow per share, net asset value, and return on capital. Both companies are committed to delivering increased capital returns to their shareholders and driving positive change in the communities where they operate.