8-K
Chord Energy Corp (CHRD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 16, 2025
CHORD ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-34776 | 80-0554627 |
|---|---|---|
| (State or other jurisdiction of<br> <br>incorporation or organization) | (Commission<br> <br>File Number) | (I.R.S. Employer<br>Identification No.) |
| 1001 Fannin Street, Suite 1500 | ||
| --- | --- | |
| Houston, Texas | 77002 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (281) 404-9500
Not Applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock | CHRD | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 | Regulation FD Disclosure. |
|---|
Proposed Notes Offering
On September 16, 2025, Chord Energy Corporation (the “Company,” “we,” or “our”) announced that it has commenced an offering of $500 million aggregate principal amount of new senior unsecured notes due 2030 (the “Notes”) in a private placement to eligible purchasers (the “Notes Offering”). The final terms and amounts of the Notes are subject to market and other conditions and may be materially different than expectations.
If (i) the consummation of the acquisition contemplated by the Purchase and Sale Agreement, dated September 15, 2025, by and between a subsidiary of the Company, XTO Energy, Inc. and certain of its affiliates (the “XTO Acquisition”) does not occur on or before June 30, 2026, which date may be extended by the Company at its option by written notice to the trustee for the Notes to not later than September 30, 2026 (such date, as it may be extended, the “Outside Date”) or (ii) prior thereto, the Company notifies the trustee in writing that it will not pursue the consummation of the XTO Acquisition (the earlier of the date of delivery of such notice described in clause (ii) and the Outside Date the “Special Mandatory Redemption Trigger Date”), the Notes will be subject to a special mandatory redemption at a redemption price equal to (a) if the Special Mandatory Redemption Trigger Date occurs on or before June 30, 2026, 100% of the principal amount of the Notes to be redeemed or (b) if the Special Mandatory Redemption Trigger Date occurs thereafter, 101% of the principal amount of the Notes to be redeemed, in each case, plus accrued and unpaid interest up to, but excluding, the date upon which the Notes will be redeemed.
The Notes will be offered in a private placement to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A and to non-U.S. persons outside the United States pursuant to Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) and other applicable laws. Copies of the press release announcing the Notes Offering is attached hereto as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.
The information contained in this Item 7.01, including Exhibit 99.1 attached hereto, does not constitute an offer to sell, or a solicitation of an offer to buy, any of the Notes in the Notes Offering or any other securities of the Company, and none of such information shall constitute an offer, solicitation or sale of securities in any jurisdiction in which the offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or any applicable exemption from registration under the Securities Act and applicable state securities laws.
In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in any such filing. The filing of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is or may be required to be disclosed solely by reason of Regulation FD.
| Item 8.01 | Other Information. |
|---|
Pro Forma Financial Information
In connection with the Notes Offering, the Company is disclosing under Item 8.01 of this Current Report on Form 8-K the unaudited pro forma condensed combined financial information contained in Exhibit 99.2 attached hereto and which is incorporated into this Item 8.01 by reference.
Cautionary Note Regarding Forward-Looking Statements
The information in this Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical fact included in this Current Report on Form 8-K, including statements regarding the Notes Offering and the use of proceeds therefrom, the XTO Acquisition, and our strategy, plans and objectives of management, are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
All forward-looking statements are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors and risks include, but are not limited to, unanticipated developments that prevent, delay, or negatively impact the Notes Offering or the XTO Acquisition, the timing of the special mandatory redemption, if any, in relation to the closing of the XTO Acquisition, and other financial, operational, and legal risks and uncertainties detailed from time to time in the Company’s cautionary statements contained in its filings with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under the caption “Risk Factors,” as may be updated from time to time in the Company’s periodic filings with the SEC. Should one or more of the risks or uncertainties described in this Current Report on Form 8-K occur, or should any underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Current Report on Form 8-K. All forward-looking statements, expressed or implied, included in this Current Report on Form 8-K are expressly qualified in their entirety by this cautionary statement.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(b) Pro Forma Financial Information.
The following unaudited pro forma condensed combined financial information of the Company, attached as Exhibit 99.2 hereto:
| • | Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2024; and |
|---|---|
| • | Notes to the Unaudited Pro Forma Condensed Combined Statement of Operations. |
| --- | --- |
(d) Exhibits.
| Exhibit<br> <br>No. | Description of Exhibit |
|---|---|
| 99.1 | Press release, dated September 16, 2025, announcing the Notes Offering. |
| 99.2 | Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CHORD ENERGY CORPORATION<br> <br>(Registrant) | ||
|---|---|---|
| Date: September 16, 2025 | By: | /s/ Shannon B. Kinney |
| Shannon B. Kinney | ||
| Executive Vice President, Chief Administrative Officer, General Counsel, and Corporate Secretary |
EX-99.1
Exhibit 99.1
Chord Energy Corporation Announces $500 Million Offering of Senior Notes
HOUSTON, Texas, September 16, 2025—Chord Energy Corporation (NASDAQ: CHRD) (the “Company,” “we,” “us,” or “our”), announced today that, subject to market conditions, it intends to offer $500 million in aggregate principal amount of senior unsecured notes due 2030 (the “Notes”) in a private placement to eligible purchasers (the “Notes Offering”). The Notes will be unsecured, senior obligations of the Company and will be guaranteed by the Company’s existing subsidiaries and future domestic subsidiaries that, in each case, guarantee the Company’s senior secured revolving credit facility.
The Company intends to use the net proceeds from the Notes Offering for purposes of (i) funding all or a portion of the consideration in connection with the Company’s recently announced pending acquisition of certain oil and gas assets in the Williston Basin from XTO Energy, Inc. (“XTO”) (such acquisition, the “XTO Acquisition”) and paying related costs and expenses and (ii) paying all fees and expenses associated with the Notes Offering. The final terms and amounts of the Notes are subject to market and other conditions and may be materially different than expectations.
The Notes will be subject to a “special mandatory redemption” in the event that the XTO Acquisition does not occur on or before June 30, 2026, which date may be extended to not later than September 30, 2026. The special mandatory redemption would be at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest up to but excluding the date upon which the Notes will be redeemed (unless the trigger date for the redemption occurs after June 30, 2026 and on or before September 30, 2026, in which case the redemption price will be equal to 101% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest).
The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and unless so registered, the notes may not be offered or sold in the United States absent an applicable exemption from, or a transaction not subject to, registration requirements of the Securities Act and applicable state securities laws. The Notes are being offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act and is for informational purposes only. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security, including with respect to the Notes, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.
About Chord Energy
Chord Energy Corporation is an independent exploration and production company with quality and sustainable long-lived assets primarily in the Williston Basin. The Company is uniquely positioned with a best-in-class balance sheet and is focused on rigorous capital discipline and generating free cash flow by operating efficiently, safely and responsibly to develop its unconventional onshore oil-rich resources in the continental United States.
Cautionary Note Regarding Forward-Looking Statements
The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this press release, including statements regarding the Notes Offering, the use of proceeds therefrom, the XTO Acquisition, the timing of the special mandatory redemption, if any, in relation to the closing of the XTO Acquisition, and our strategy, plans, and objectives of management, are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
All forward-looking statements are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors and risks include, but are not limited to, unanticipated developments that prevent, delay, or negatively impact the Notes Offering or the XTO Acquisition, and other financial, operational, and legal risks and uncertainties detailed from time to time in the Company’s cautionary statements contained in its filings with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, under the caption “Risk Factors,” as may be updated from time to time in the Company’s periodic filings with the SEC.
Should one or more of the risks or uncertainties described in this press release occur, or should any underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. These forward-looking statements represent the Company’s judgment as of the date of this press release. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement.
Contact:
Chord Energy Corporation
Bob Bakanauskas, VP, Investor Relations
(281) 404-9600
ir@chordenergy.com
EX-99.2
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
On May 31, 2024, Chord Energy Corporation (“Chord” or the “Company”) completed the arrangement contemplated by the arrangement agreement, dated as of February 21, 2024 (the “Arrangement Agreement”), by and among Chord, Enerplus Corporation (“Enerplus”) and Spark Acquisition ULC, a wholly-owned subsidiary of Chord (such transaction, the “Arrangement”). Pursuant to the Arrangement Agreement, each Enerplus shareholder received 0.10125 shares of common stock of Chord, par value of $0.01 per share (the “Chord Common Stock”) and $1.84 in cash, in exchange for each Enerplus common share held as of May 31, 2024.
Chord and Enerplus prepared their respective historical financial statements in accordance with U.S. GAAP. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), Chord was treated as the acquirer for accounting purposes and accounted for the Arrangement as an acquisition of a business.
The effects of the Arrangement were included in the Company’s unaudited historical condensed consolidated balance sheet as of June 30, 2024; therefore, a pro forma balance sheet is not included herein. The Company’s unaudited historical condensed consolidated statement of operations for the six months ended June 30, 2024 includes the effects of the Arrangement from May 31, 2024 through June 30, 2024. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024 was prepared as if the Arrangement had occurred on January 1, 2024. The unaudited pro forma condensed combined statement of operations has been derived from the historical consolidated financial statements of the Company and Enerplus.
The unaudited pro forma condensed combined statement of operations and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by the Company’s management; accordingly, actual results could differ materially from the pro forma information. Significant estimates and assumptions include the purchase price allocation, based on estimates of, and assumptions related to, the fair value of the assets acquired and liabilities assumed as of May 31, 2024. Management believes that the assumptions used to prepare the unaudited pro forma condensed combined statement of operations and accompanying notes provide a reasonable and supportable basis for presenting the significant estimated effects of the Arrangement. The following unaudited pro forma condensed combined statement of operations does not purport to represent what the Company’s results of operations would have been if the Arrangement had occurred on January 1, 2024. The unaudited pro forma condensed combined statement of operations should be read together with the following:
| (i) | Company’s unaudited historical condensed consolidated financial statements and related notes included in<br>its Quarterly Report on Form 10-Q for the six months ended June 30, 2024, filed with the SEC on August 8, 2024; and |
|---|---|
| (ii) | Enerplus’ unaudited historical condensed consolidated financial statements and related notes for the<br>three months ended March 31, 2024 filed with SEDAR+ on May 8, 2024 and included on Form 6-K filed with the SEC on May 8, 2024. |
| --- | --- |
The unaudited pro forma condensed combined statement of operations has been prepared in accordance with Article 11 of SEC Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” using assumptions set forth in the notes herein. Article 11 permits presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). The Company has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined statement of operations.
Chord Energy Corporation
Pro Forma Condensed Combined Statement of Operations (Unaudited)
Six Months Ended June 30, 2024
(In thousands, except per share data)
| As Reported | Enerplus AsAdjusted –Note 2 | TransactionAccountingAdjustments –Note 3 | Pro FormaCombinedChord | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | ||||||||||||||||
| Oil, NGL and gas revenues | $ | 1,650,829 | $ | 601,485 | $ | — | $ | 2,252,314 | ||||||||
| Purchased oil and gas sales | 695,111 | — | — | 695,111 | ||||||||||||
| Total revenues | 2,345,940 | 601,485 | — | 2,947,425 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Lease operating expenses | 335,853 | 124,726 | — | 460,579 | ||||||||||||
| Gathering, processing and transportation expenses | 117,114 | 55,831 | — | 172,945 | ||||||||||||
| Purchased oil and gas expenses | 692,118 | — | — | 692,118 | ||||||||||||
| Production taxes | 143,433 | 54,240 | — | 197,673 | ||||||||||||
| Depreciation, depletion and amortization | 396,822 | 162,695 | 15,634 | (a | ) | 575,151 | ||||||||||
| General and administrative expenses | 107,789 | 61,516 | 6,647 | (b | ) | 175,952 | ||||||||||
| Exploration and impairment | 7,639 | — | — | 7,639 | ||||||||||||
| Total operating expenses | 1,800,768 | 459,008 | 22,281 | 2,282,057 | ||||||||||||
| Gain on sale of assets, net | 16,788 | — | — | 16,788 | ||||||||||||
| Operating income | 561,960 | 142,477 | (22,281 | ) | 682,156 | |||||||||||
| Other income (expense) | ||||||||||||||||
| Net gain (loss) on derivative instruments | (22,969 | ) | (2,789 | ) | — | (25,758 | ) | |||||||||
| Net gain from investment in unconsolidated affiliate | 22,158 | — | — | 22,158 | ||||||||||||
| Interest expense, net of capitalized interest | (19,800 | ) | (6,622 | ) | (8,193 | ) | (c | ) | (34,615 | ) | ||||||
| Other income | 6,907 | 3,902 | — | 10,809 | ||||||||||||
| Total other income (expense), net | (13,704 | ) | (5,509 | ) | (8,193 | ) | (27,406 | ) | ||||||||
| Income before income taxes | 548,256 | 136,968 | (30,474 | ) | 654,750 | |||||||||||
| Income tax expense | (135,541 | ) | (6,654 | ) | 7,314 | (d | ) | (134,881 | ) | |||||||
| Net income | $ | 412,715 | $ | 130,314 | $ | (23,160 | ) | $ | 519,869 | |||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 9.12 | $ | 8.35 | (e | ) | ||||||||||
| Diluted | $ | 8.87 | $ | 8.18 | (e | ) | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 45,048 | — | — | 62,281 | (e | ) | ||||||||||
| Diluted | 46,313 | — | — | 63,546 | (e | ) |
The accompanying notes are an integral part of the unaudited pro forma condensed combined statement of operations.
Notes to Unaudited Pro Forma Condensed Combined Statement of Operations
| 1. | Basis of Presentation |
|---|
The unaudited pro forma condensed combined statement of operations has been prepared in accordance with Article 11 using assumptions set forth in the notes herein. Article 11 permits presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur, otherwise known as Management’s Adjustments. The Company has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined statement of operations.
On May 31, 2024, the Arrangement was completed, and the Company issued 20,680,097 shares of Chord Common Stock and paid $375.8 million in cash to Enerplus shareholders. Pursuant to the Arrangement Agreement, each Enerplus shareholder received 0.10125 shares of Chord Common Stock and $1.84 in cash, in exchange for each Enerplus common share held as of May 31, 2024. The Arrangement was accounted for using the acquisition method of accounting in accordance with ASC 805, with Chord treated as the accounting acquirer. The Company’s allocation of the purchase price with respect to the Arrangement was based on estimates of, and assumptions related to, the fair value of the assets acquired and liabilities assumed as of May 31, 2024.
The tables below present the total consideration transferred and its allocation to the estimated fair value of identifiable assets acquired and liabilities assumed, and the resulting goodwill as of the acquisition date of May 31, 2024.
| Purchase Price Consideration(In thousands) | ||
|---|---|---|
| Common stock issued to Enerplus shareholders | $ | 3,732,137 |
| Cash paid to Enerplus shareholders | 375,813 | |
| Cash paid to settle Enerplus equity-based compensation awards | 102,393 | |
| Cash paid to settle Enerplus credit facility | 395,000 | |
| Cash paid to settle a retention bonus to Enerplus employees | 5,920 | |
| Total consideration transferred | $ | 4,611,263 |
| Purchase Price Allocation<br>(In thousands) | ||
| --- | --- | --- |
| Assets Acquired | ||
| Cash and cash equivalents | $ | 239,921 |
| Accounts receivable, net | 281,492 | |
| Inventory | 14,878 | |
| Prepaid expenses | 16,323 | |
| Oil and gas properties (successful efforts method) | 5,253,860 | |
| Other property and equipment | 6,812 | |
| Long-term inventory | 8,636 | |
| Operating<br>right-of-use assets | 42,954 | |
| Other assets | 1,049 | |
| Total assets acquired | $ | 5,865,925 |
| Liabilities Assumed | ||
| Accounts payable | $ | 1,965 |
| Revenues and production taxes payable | 199,706 | |
| Accrued liabilities | 195,034 | |
| Current portion of long-term debt | 60,063 | |
| Current operating lease liabilities | 27,420 | |
| Deferred tax liabilities | 1,179,200 | |
| Asset retirement obligations | 115,056 | |
| Operating lease liabilities | 15,534 | |
| Total liabilities assumed | $ | 1,793,978 |
| Net Assets Acquired | $ | 4,071,947 |
| Goodwill | 539,316 | |
| Purchase **** price consideration | $ | 4,611,263 |
The effects of the Arrangement were included in the Company’s unaudited historical condensed consolidated balance sheet as of June 30, 2024; therefore, a pro forma balance sheet is not included herein. The Company’s unaudited historical condensed consolidated statement of operations for the six months ended June 30, 2024 includes the effects of the Arrangement from May 31, 2024 through June 30, 2024. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024 was prepared as if the Arrangement had occurred on January 1, 2024. The unaudited pro forma condensed combined statement of operations has been derived from the historical consolidated financial statements of the Company and Enerplus.
For purposes of preparing the unaudited pro forma condensed combined statement of operations, certain pro forma adjustments were translated from Canadian dollars to United States dollars using historical exchange rates.
The unaudited pro forma condensed combined statement of operations and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by management; accordingly, actual results could differ materially from the pro forma information. Management believes the assumptions provide a reasonable and supportable basis for presenting the estimated significant effects of the transactions described above. The unaudited pro forma condensed combined statement of operations is provided for illustrative purposes only and may or may not provide an indication of results in the future.
| 2. | Arrangement Reclassification Adjustments |
|---|
Certain reclassifications have been made in the historical presentation of Enerplus’ statement of operations to conform to the Company’s historical presentation.
Statement of Operations for the five months ended May 31, 2024
| Statement of Operations<br>Five Months Ended May 31, 2024<br>(In thousands) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Enerplus Caption | Chord Caption | Enerplus HistoricalMarch 31, 2024 | Enerplus Historical -April 1, 2024 throughMay 31, 2024 | ReclassificationAdjustments | Ref. | EnerplusAs Adjusted | ||||||||
| Revenues | ||||||||||||||
| Crude oil and natural gas sales | Oil, NGL and gas revenues | $ | 362,037 | $ | 288,770 | $ | (49,322 | ) | (i) (v) | $ | 601,485 | |||
| Purchased oil and gas sales | — | — | — | — | ||||||||||
| Commodity derivative instruments gain/(loss) | Other services revenues | (2,775 | ) | (14 | ) | 2,789 | (ii) | — | ||||||
| Total revenues | 359,262 | 288,756 | (46,533 | ) | 601,485 | |||||||||
| Expenses | ||||||||||||||
| Operating | Lease operating expenses | 102,001 | 72,031 | (49,306 | ) | (i) | 124,726 | |||||||
| Transportation | Gathering, processing and transportation expenses | 32,464 | 23,367 | — | 55,831 | |||||||||
| Purchased oil and gas expenses | — | — | — | — | ||||||||||
| Production taxes | Production taxes | 29,436 | 24,804 | — | 54,240 | |||||||||
| General and administrative | General and administrative expenses | 24,257 | 4,773 | 32,486 | (iii) | 61,516 | ||||||||
| Depletion, depreciation and accretion | Depreciation, depletion and amortization | 92,510 | 70,185 | — | 162,695 | |||||||||
| Interest | 3,530 | 3,881 | (7,411 | ) | (iv) | — | ||||||||
| Other expense/(income) | (3,873 | ) | (802 | ) | 4,675 | (v) | — | |||||||
| Transaction costs | 7,769 | 24,717 | (32,486 | ) | (iii) | — | ||||||||
| Exploration and impairment | — | — | — | — | ||||||||||
| Total operating expenses | 288,094 | 222,956 | (52,042 | ) | 459,008 | |||||||||
| Gain on sale of assets, net | — | — | — | — | ||||||||||
| Operating income | 71,168 | 65,800 | 5,509 | 142,477 | ||||||||||
| Net gain (loss) on derivative instruments | — | — | (2,789 | ) | (ii) | (2,789 | ) | |||||||
| Net gain from investment in unconsolidated affiliate | — | — | — | — | ||||||||||
| Interest expense, net of capitalized interest | — | — | (6,622 | ) | (iv) (v) | (6,622 | ) | |||||||
| Other income (expense) | — | — | 3,902 | (v) | 3,902 | |||||||||
| Total other income (expense), net | — | — | (5,509 | ) | (5,509 | ) | ||||||||
| Income/(Loss) Before Taxes | Income before income taxes | 71,168 | 65,800 | — | 136,968 | |||||||||
| Income tax expense (benefit) | ||||||||||||||
| Current income tax expense/(recovery) | Income tax (expense) benefit | 2,445 | 2,000 | 2,209 | (vi) (vii) | (6,654 | ) | |||||||
| Deferred income tax expense/(recovery) | 2,587 | (378 | ) | (2,209 | ) | (vi) | — | |||||||
| Total income tax expense (benefit) | 5,032 | 1,622 | — | (6,654 | ) | |||||||||
| Net Income/(Loss) | Net income | $ | 66,136 | $ | 64,178 | $ | — | $ | 130,314 | |||||
| (i) | Represents the reclassification of balances contained in “Operating” expenses on Enerplus’<br>historical statement of operations into “Oil, NGL and gas revenues” to conform to the Company’s accounting policy. | |||||||||||||
| --- | --- | |||||||||||||
| (ii) | Represents the reclassification of balances contained in “Commodity derivative instruments<br>gain/(loss)” on Enerplus’ historical statement of operations into “Net gain (loss) on derivative instruments” to conform to the Company’s statement of operations presentation. | |||||||||||||
| --- | --- | |||||||||||||
| (iii) | Represents the reclassification of balances contained in “Transaction costs” on Enerplus’<br>historical statement of operations into “General and administrative expenses” to conform to the Company’s statement of operations presentation. | |||||||||||||
| --- | --- | |||||||||||||
| (iv) | Represents the reclassification of balances contained in “Interest” on Enerplus’ historical<br>statement of operations into “Interest expense, net of capitalized interest” to conform to the Company’s statement of operations presentation. | |||||||||||||
| --- | --- | |||||||||||||
| (v) | Represents the reclassification of balances contained in “Crude oil and natural gas sales” and<br>“Other income, net” on Enerplus’ historical statement of operations into “Interest expense, net of capitalized interest” and “Other income, net” to conform to the Company’s statement of operations<br>presentation. | |||||||||||||
| --- | --- | |||||||||||||
| (vi) | Represents the reclassification of balances contained in “Deferred income tax expense/(recovery)”<br>on Enerplus’ historical statement of operations into “Income tax (expense) benefit” to conform to the Company’s statement of operations presentation. | |||||||||||||
| --- | --- | |||||||||||||
| (vii) | Represents the presentation of balances contained in “Current income tax expense/(recovery)” and<br>“Deferred income tax expense/(recovery)” on Enerplus’ historical statement of operations as a negative value within “Income tax (expense) benefit” to conform to the Company’s statement of operations presentation.<br> | |||||||||||||
| --- | --- | |||||||||||||
| 3. | Arrangement Acquisition Accounting and Pro Forma Adjustments and Assumptions | |||||||||||||
| --- | --- |
The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024 reflects the followingadjustments:
| (a) | Represents the incremental depreciation, depletion and amortization expense related to the assets<br>acquired in the Arrangement, which is based on the purchase price allocation. Depletion was calculated using the unit-of-production method under the successful efforts<br>method of accounting. The depletion expense was adjusted for (i) the revision to the depletion rate reflecting the acquisition costs and the reserves volumes attributable to the acquired oil and gas properties and (ii) the difference in<br>depletion methodology under the successful efforts method of accounting applied by Chord compared to the full cost method of accounting applied by Enerplus. The pro forma depletion rate attributable to the Arrangement was $12.57 per barrel of oil<br>equivalent. This adjustment also includes an increase in accretion expense attributable to asset retirement obligations of $1.5 million for the six months ended June 30, 2024 due to Chord’s higher credit-adjusted risk-free rate as<br>compared to Enerplus. | ||
|---|---|---|---|
| (b) | Represents the adjustment to expense certain historical costs originally capitalized by Enerplus under the full<br>cost method of accounting to align with Chord’s accounting policy under the successful efforts method of accounting. | ||
| --- | --- | ||
| (c) | Represents the net increase to interest expense resulting from the (i) elimination of interest expense on<br>Enerplus’ bank credit facilities, (ii) incremental interest expense for the amortization of the fair value adjustment to Enerplus’ senior notes assumed by Chord, (iii) reduction of interest expense to align with Chord’s<br>capitalized interest accounting policy, (iv) incremental interest expense for borrowings on Chord’s existing credit facility to finance the closing of the Arrangement and (v) incremental interest expense for the amortization of<br>deferred financing costs related to the amendment entered into by Chord on the closing date of the Arrangement to increase the borrowing base capacity and commitment amounts on Chord’s revolving credit facility as follows:<br> | ||
| --- | --- | ||
| Six Months EndedJune 30, 2024<br>(In thousands) | |||
| --- | --- | --- | --- |
| Elimination of interest expense on Enerplus’ bank credit facilities | $ | 5,430 | |
| Incremental interest expense for amortization of remeasurement of legacy Enerplus’ senior<br>notes | (333 | ) | |
| Reduction of interest expense related to capitalized interest to align with Chord’s<br>accounting policy | 1,054 | ||
| Incremental interest expense for borrowings on Chord’s revolving credit facility | (13,928 | ) | |
| Incremental interest expense for amortization of deferred financing costs | (416 | ) | |
| Net transaction accounting adjustments to interest expense | $ | (8,193 | ) |
A 0.125% change in the variable interest rate of Chord’s revolving credit facility or a $10 million change in the amount financed would increase or decrease interest expense presented in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024 by $0.2 million and $0.3 million, respectively.
| (d) | Represents the income tax impact of the pro forma adjustments from the Arrangement at the blended federal and<br>state statutory rate of approximately 24% for the six months ended June 30, 2024. | |
|---|---|---|
| (e) | The table below represents the calculation of the weighted average shares outstanding and earnings per share<br>included in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2024. As the Arrangement is being reflected in the unaudited pro forma condensed combined statement of operations for the six<br>months ended June 30, 2024 as if it had occurred on January 1, 2024, the calculation of weighted average shares outstanding for basic and diluted earnings per share assumes that the shares issuable related to the Arrangement have been<br>outstanding for the entire period. | |
| --- | --- | |
| Six Months Ended June 30, 2024(In thousands, except per sharedata) | ||
| --- | --- | --- |
| Pro forma net income | $ | 519,869 |
| Basic shares: | ||
| Chord shares outstanding (weighted average per statement of operations) | 45,048 | |
| Chord shares issued in exchange for legacy Enerplus shares as part of consideration<br>transferred | 17,233 | |
| Pro forma weighted average common shares outstanding, basic | 62,281 | |
| Diluted shares: | ||
| Pro forma weighted average shares outstanding, basic | 62,281 | |
| Dilutive effect of shares convertible from Chord share based awards | 438 | |
| Dilutive effect of shares convertible from Chord in-the-money warrants | 827 | |
| Pro forma weighted average common shares outstanding, diluted | 63,546 | |
| Earnings attributable to Chord per share, basic | $ | 8.35 |
| Earnings attributable to Chord per share, diluted | $ | 8.18 |
| Anti-dilutive weighted average common shares: | ||
| Potential common shares | 2,028 |