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Chord, Enerplus Plan a Bakken Super-Merger

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Chord Energy (CHRD) and Enerplus (ERF) plan to merge in an $11B transaction, creating an E&P focused on Bakken oil development. Several midstream operators could see rigs and volumes affected by the upstream deal.

At a combined count of 7 rigs and crude oil volumes of ~167 Mb/d, CHRD-ERF would be one of the top oil producers in the Williston Basin. The two companies currently operate 1 rig in McKenzie County, 2 rigs in Dunn County, and 4 in Montrail County, ND. They plan to close the merger in mid-2024.

The Williston Basin saw a significant uptick in crude oil production in 3Q23 to 1.3 MMb/d, a gain of 147 Mb/d (+12.7%). East Daley’s Crude Hub Model forecasts Williston Basin effective egress pipe utilization at 83% in 2023.

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EDA expects Bakken oil production to grow 65 Mb/d on average in 2024, increasing utilization to 88% on oil pipelines leaving the basin (see figure). At the close of 2024, the Crude Hub Model predicts flows on Enbridge’s (ENB) North Dakota Pipeline and the Dakota Access Pipeline (DAPL) to run at 88% utilization.

On the natural gas side, East Daley clients can analyze impacts of the merger using the “Producer to System Analysis” dashboard in Energy Data Studio. ONEOK (OKE) is the largest gatherer and processor for Chord and Enerplus, processing over 50% of the producers’ gas volumes (see figure from EDS dashboard showing CHRD-ERF volumes by processor). Targa Resources (TRGP), Hess Midstream, and Crestwood (CEQP) also handle gas for the two companies.

Chord and Enerplus both have guided to hold oil production flat in 2024 at 91–101 Mb/d and 64 Mb/d, respectively. The two companies have 1.3 million net acres combined and foresee 10 years of development opportunities at their current pace. From September 2022 to September 2023, Chord’s volume grew by 26.4% or 18.8 Mb/d while Enerplus saw volumes decline 1.1%. – Kristine Oleszek Tickers: CEQP, CHRD, ENB, ERF, OKE, TRGP.




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