Hess Divests Acreage in North Dakota
Hess Corp. (NYSE: HES) has sold its Little Knife and Murphy Creek acreage interests in the Bakken Formation in North Dakota to Enerplus Corp. (TSX: ERF) (NYSE: ERF) for a total consideration of $312 million, Hess reported Friday.
The deal is effective March 1, 2021, Hess noted in a written statement.
“The Bakken is a core asset in our company’s portfolio,” remarked Hess CEO John Hess. “Sale of the Little Knife and Murphy Creek acreage – the majority of which we were not planning to drill before 2026 – brings material value forward and further strengthens our cash and liquidity position.”
When on April 8, 2021, it announced its plan to acquire the 78,700 net acres in Dunn County, N.D., Enerplus pointed out that it would add 110 net tier one undrilled locations (77% operated). Moreover, it stated the additional, largely contiguous Williston Basin acreage will extend its development drilling inventory by two to three years based on tier one conditions.
“These assets are a strong strategic and operational fit for Enerplus, further extending our high-return Bakken drilling inventory,” Enerplus President and CEO Ian C. Dundas remarked in the April 8 statement. “The addition of this tier one resource into our development plan is expected to generate strong financial returns and enhance our free cash flow growth. In connection with the acquisition, we have highlighted a five-year outlook with projected cumulative free cash flow of between $1.2 to $1.8 billion between 2021 and 2025, assuming US$50 to $55 per barrel WTI.”
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