CALGARY, Nov. 1, 2012 /CNW/ - Enerplus Corporation ("Enerplus") (TSX: ERF) (NYSE: ERF) is pleased to announce that it has entered into an agreement today to sell all of our working interests in our producing assets located in Manitoba for gross proceeds of approximately $220 million.
The assets, located in the Virden/Daly region of Manitoba, are currently producing approximately 1,600 bbls/day of crude oil under waterflood from seven units and other various non-unit interests. A total of 8.4 million barrels of estimated proved plus probable reserves are attributable to these properties. Given the limited near-term growth potential under our current capital allocation plans, along with the high recovery of oil to date and lower working interests, these assets were considered non-core to our long-term business strategy.
"Improving the focus, concentration and profitability of our business is critical to our future success," says Gordon Kerr, President & Chief Executive Officer. "The sale of these assets will reduce our debt levels thereby improving our financial flexibility and allowing us to focus our investment in core areas that we believe have better growth potential and superior economics."
The transaction is expected to be accretive to cash flow and production per debt adjusted share. The selling price reflects favourable valuation metrics of approximately 7x cash flow, approximately $138,000 per flowing barrel and $28.70/bbl of proved plus probable reserves including future development capital.
The sale is subject to financing and customary closing conditions and is expected to close before the end of December 2012.