DEAL ALERT (BAKKEN MERGER)

Energy Advisors Group has released a Special Report in its continuing Research and Thought Leadership efforts as a continuation of our Market Monitor Series. This latest 21-page Special Report analyzes Chord Energy's $4 billion buy via merger of Calgary-based public Enerplus and provides additional comments, contrast and context to the quickly changing landscape in the premier Bakken oil play. Also, included in this Special Report is a Special Section that has individual Deal Sheets for all the large Bakken deals since June 2022.

Quick Quotes:

----"Chord, the new sound of Oasis & Whiting, buys Enerplus just 4 months after Chevron bought Hess' Bakken assets."

----"At $4 billion, the deal goes off at 3.4x Enerplus' Q423 annualized cash flow from operations."

----“Oasis went in and out of Ch 11 in 2020 then bought FANG's Bakken assets in 2021, merged with Whiting in 2022 (rebranded as Chord Energy) and now with Enerplus reigns top operator in the Bakken."            

----“Enerplus was THE original Canadian oil & gas royalty trust and now nearly 40 years later its shareholders own 1/3rd of the Bakken's largest producer."

----“The Bakken has well delineated tiers contoured with breakevens of $40, $50 and $60 oil assuming 10% IRR and can maintain production in the Basin with 50 rigs running."

----"Since February 8 when media reported Devon courting Enerplus to the close on the day of Chord's pre-market opening announcement on February 21 sealing the deal, Enerplus shares gained ~25%."

----"Enerplus brings high quality rock and strengthens Chord's now 10 year inventory of which >40% is positioned for 3-mile laterals with upside."

Lets Look AT Other Observations & Takeaways---

The road to becoming the Bakken’s largest producer took nearly 40 years of corporate effort from two companies maneuvering financial booms and busts:

• Suitors. First there was Devon, but then Chord moved swiftly to top bid Enerplus and position itself not only as #1 in the Bakken but also propelling itself into the Large Cap E&P peer group;
• History. New Chord represents a combination of assets from name brand companies like Enerplus, Kodiak, Oasis, Whiting, Bruin, Hess, WPX, SM Energy, Forge and more;
• Risk. With over 1,800 drilling locations at breakevens of <$60 oil (defined as IRR 10%), Chord has 10 years of drilling inventory of which >40% is positioned for 3-mile laterals with upside;
• Size Matters. With a market cap of >$10 billion, Chord competes with other large caps in the $10-$20 billion range and has a strong balance sheet with expected Y/E 24 leverage of 0.2x;
• Cash. Chord expects a 2024 YE FCF yield of 14% & offers investors a "pure play focus";
• Technical, Chord/Enerplus executives have turned online 30% of the top 100 Bakken wells since 2022 while drilling 15% of the total Bakken well count;
• Inventory. As seen right, Enerplus lands strengthens Chord’s inventory with significant positions in Tier 1 areas with <$40 breakeven 
• Takeaway. Ample midstream takeaway (bottom image) to 2027 should help WTI differentials; 
• Stable. Bakken oil production can be held flat with about 40 rigs running in the Basin;
• Play. The Bakken will likely continue to see change as top operators eye Encap's Grayson Mill;
• ERF Shareholders. Since Feb. 8 deal rumors, ERF shares soared ~25% as CHRD cut the deal.

Deal Overview--

Here is a slide on the transaction including a map, pro forma highlights and Bakken rankings ---

Here's a couple visuals related to Enerplus assets (Bakken Contours & Marcellus Non-Op) ---

Here's a look at the New Chord Energy and Ranking Against Some Large Cap E&Ps ---

Here's the story how Chord Energy became the Bakken's #1 Operator

And an Update contrasting four Bakken Operators ---

Contained in this Report is a Special Section Covering Impact Bakken Deals since June 2022 --

Please click right to download this report to learn more about this transaction. Also, you can access or request our detailed Bakken/Three Forks report released in early January 2024 for more play detail.

Energy Advisors is working hard to expand our thought leadership and look forward to providing additional market insight for our clients through regional perspectives, M&A analysis and market monitor. 

Our firm has been serving the needs of buyers, sellers and capital providers for over thirty-five years.

TO LEARN MORE:

Energy Advisors Group

Brian Lidsky

Director

Phone: 713-600-0138

---Email: [email protected]

Corporate Office:

4265 San Felipe Ste 650

Houston TX 77027

---Corporate Switchboard: 713-600-0123