Calgary’s Enerplus announces US$465M takeover of Bruin E&P HoldCo, LLC
The Dakota Access pipeline was the subject of months of sometimes violent protests in 2016 and 2017 during its construction.
Enerplus Corp. is increasing its bets on the Bakken light oil region in North Dakota with the purchase of a private rival for US$465 million, despite a legal fight that could shut down a major oil pipeline there.
The Calgary-based company said on Jan. 26 that it has agreed to buy Bruin E&P HoldCo, LLC, which has current production of about 24,000 barrels of oil equivalent per day.
“With immediately adjacent acreage offering strong operational synergies, Bruin’s assets are highly complementary to our existing tier 1 position in the Bakken,” said Enerplus CEO Ian Dundas in a statement.
The company did not immediately respond to a request for comment about a federal appeal court decision on Jan. 26 to uphold the ruling of a district judge who last year ordered a full environmental impact review of the Dakota Access oil pipeline.
Following a complaint by the Standing Rock Sioux Tribe, the district judge ruled last spring that the review conducted by the U.S. Army Corps of Engineers on the 1,886-kilometre pipeline that straddles the North Dakota-South Dakota border was incomplete.
He ordered the pipeline shut down, but that order was reversed. The ruling on Jan. 26 by the U.S. Court of Appeals for the D.C. Circuit is a setback for the pipeline but also does not require it to stop operating or be emptied of oil while the environmental review is done.
The Dakota Access pipeline was the subject of months of sometimes violent protests in 2016 and 2017 during its construction.
The tribe continued its legal challenges against the pipeline even after it began carrying oil from North Dakota across South Dakota and Iowa to a shipping point in Illinois in June 2017.
Enerplus reported fourth-quarter production of 86,200 boe/d on Jan. 26 and said that is expected to rise to an average of about 106,000 boe/d in 2021 on capital spending of between C$335 million and C$385 million if the Bruin deal goes through by early March as expected.
Enerplus says it will fund the purchase of Bruin with a new US$400-million term loan and a C$115-million equity financing. It says it will not assume any of Bruin’s debt.
