Enerplus Corp., Calgary, has agreed to sell its interests in Sleeping Giant field (Montana) and Russian Creek area (North Dakota) in the Williston basin for $115 million to an undisclosed buyer.
In addition, Enerplus will receive up to $5 million in contingent payments if the WTI oil price averages over $65/bbl in 2022 and over $60/bbl in 2023.
The sale consists of the company's interests in the developed Sleeping Giant field in Montana and the southernmost portion of Enerplus' North Dakota position in the Russian Creek area. The Interests do not include any future drilling locations in Enerplus' identified Williston basin drilling inventory.
Enerplus' working interest production from the interests averaged 3,000 boe/d (77% crude oil and natural gas liquids) in second-quarter 2021 and includes 244 net wells. Estimated 2022 net operating income associated with the interests is $22 million based on a $60 WTI oil price.
With the sale, the company expects to both accelerate debt reduction and direct about 10% of the sale proceeds to incremental share repurchases. Debt reduction of $400 million is targeted by the end of first-quarter 2022 based on the current commodity price environment, the company said.
The sale is expected to close at end October, subject to customary closing conditions.