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Chord (CHRD) Updates 2024 Outlook After Enerplus Acquisition

Chord Energy Corporation CHRD completed the acquisition of Enerplus Corporation on May 31, 2024. The acquisition, valued at $4 billion, received the approval of both Chord and Enerplus shareholders on May 14 and May 24, respectively. It was also approved by the Court of King's Bench of Alberta on May 28, 2024.

The merger is expected to create a leading operator within the Williston Basin. The combined entity is anticipated to boast significantly low-cost inventory, a sound financial position, and deliver enhanced scale and better shareholder returns. It will continue to focus on benefiting stakeholders and maximizing shareholder value.

Chord has highlighted that it will leverage best practices from both companies to create a more efficient organization and generate annual synergies exceeding $200 million (approximately), up from the original estimate of $150 million. In association with this deal, CHRD amended its existing credit agreement on May 31, 2024. The company increased the borrowing base to $3 billion and the total amount of elected commitments to $1.5 billion, thereby gaining access to an increased amount of funds.

Per the previous announcement regarding the acquisition made in February 2024, Enerplus shareholders received 0.10125 shares of Chord common stock and $1.84 in cash in exchange for each common share of Enerplus. Consequently, Enerplus has been de-listed from the New York Stock Exchange following the acquisition and will also no longer be traded on the Toronto Stock Exchange after market close on Jun 3, 2024.

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Additionally, Enerplus’ board of directors announced a dividend of $0.232675 per common share on May 23, 2024, payable on Jun 4 to shareholders of record as of May 30.

CHRD also provided an updated outlook for 2024 following the closure of the deal. The combined output of oil, gas and NGL is expected to be in the range of 265,700-273,200 barrels of oil equivalent per day. Oil volumes are anticipated to be in the band of 152,300-156,800 barrels per day.

Zacks Rank and Key Picks

Currently, CHRD carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC, Hess Midstream Partners LP HESM and Sunoco LP SUN. Archrock presently sports a Zacks Rank #1 (Strong Buy), while Hess Midstream and Sunoco carry a Zacks Rank of #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Hess Midstream LP owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.

Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than that of the composite stocks in the industry, providing unitholders with consistent returns.

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Sunoco LP (SUN) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

Hess Midstream Partners LP (HESM) : Free Stock Analysis Report

Chord Energy Corporation (CHRD) : Free Stock Analysis Report

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