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Acquisitions
 6 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
2024 Acquisition
On May 31, 2024, the Company completed the Arrangement with Enerplus and issued 20,680,097 shares of common stock and paid $375.8 million of cash to Enerplus shareholders. Also on May 31, 2024, and pursuant to the Arrangement Agreement, the Company (i) paid cash to settle Enerplus equity-based compensation awards, (ii) paid cash to satisfy and discharge in full the Enerplus credit facility and (iii) paid a cash retention bonus to Enerplus employees.
Preliminary purchase price allocation. The Company recorded the assets acquired and liabilities assumed in the Arrangement at their estimated fair value on May 31, 2024 of $4.1 billion. Goodwill recognized as a result of the Arrangement totaled $539.8 million, none of which is deductible for income tax purposes. The assignment of goodwill to reporting units was not complete as of June 30, 2024. Goodwill is primarily attributable to additional operational and financial synergies expected to be realized from the combined operations. Determining the fair value of the assets and liabilities of Enerplus requires judgement and certain assumptions to be made. See Note 5—Fair Value Measurements for additional information.
The tables below present the total consideration transferred and its preliminary 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. As provided under ASC 805, the purchase price allocation may be subject to change for up to one year after May 31, 2024, which may result in a different allocation than that presented in the tables below. Certain estimated values for the acquisition, including oil and natural gas properties, intangibles and inventory, are not yet finalized and are subject to revision as additional information becomes available and more detailed analyses are completed.
Purchase Price Consideration
(In thousands)
Common stock issued to Enerplus shareholders(1)
$3,732,137 
Cash paid to Enerplus shareholders(1)
375,813 
Cash paid to settle Enerplus equity-based compensation awards(2)
102,393 
Cash paid to settle Enerplus credit facility(3)
395,000 
Cash paid for retention bonus to Enerplus employees(4)
5,920 
Total consideration transferred$4,611,263 
__________________ 
(1)The Company issued 20,680,097 shares of common stock and paid $375.8 million of cash to Enerplus shareholders as Arrangement Consideration. Enerplus shareholders received, for each Enerplus common share issued and outstanding, 0.10125 shares of common stock as Share Consideration and $1.84 per share of cash as Cash Consideration. The fair value of the common stock issued was based on the opening price of the Company’s common stock on May 31, 2024 of $180.47. See Note 15—Stockholders’ Equity for additional information.
(2)Each Enerplus outstanding equity-based compensation award became fully vested upon completion of the Arrangement on May 31, 2024. See Note 15—Stockholders’ Equity for additional information.
(3)On May 31, 2024, the Company fully satisfied all obligations under the Enerplus credit facility, and the Enerplus credit facility was concurrently terminated. See Note 11— Long-Term Debt for additional information.
(4)In connection with the Arrangement, employees of Enerplus were paid a retention bonus upon the closing of the Arrangement totaling $5.9 million.
Preliminary Purchase Price Allocation
(In thousands)
Assets acquired:
Cash and cash equivalents$239,921 
Accounts receivable, net281,492 
Inventory5,701 
Prepaid expenses16,323 
Oil and gas properties (successful efforts method)5,253,860 
Other property and equipment6,812 
Long-term inventory8,636 
Operating right-of-use assets42,954 
Other assets1,049 
Total assets acquired$5,856,748 
Liabilities assumed:
Accounts payable$1,965 
Revenues and production taxes payable199,706 
Accrued liabilities186,334 
Current portion of long-term debt60,063 
Current operating lease liabilities27,420 
Deferred tax liabilities1,179,200 
Asset retirement obligations115,056 
Operating lease liabilities15,534 
Total liabilities assumed$1,785,278 
Net assets acquired$4,071,470 
Goodwill acquired539,793 
Purchase price consideration$4,611,263 
Post-arrangement operating results. The results of operations of Enerplus have been included in the Company’s unaudited condensed consolidated financial statements since the closing of the Arrangement on May 31, 2024. The following table summarizes the total revenues and income before income taxes attributable to Enerplus that were recorded in the Company’s Condensed Consolidated Statement of Operations for the periods presented.
Three and Six Months Ended June 30, 2024
(In thousands)
Revenues$132,036 
Income before income taxes15,131 
Unaudited pro forma financial information. Summarized below are the condensed consolidated results of operations for the periods presented, on an unaudited pro forma basis, as if the Arrangement had occurred on January 1, 2023. The information presented below reflects pro forma adjustments based on available information and certain assumptions that the Company believes are factual and supportable. The pro forma financial information includes certain non-recurring pro forma adjustments that were directly attributable to the Arrangement, including transaction costs incurred by the Company. The unaudited pro forma financial information does not purport to be indicative of results of operations that would have occurred had the Arrangement occurred on the basis assumed above, nor is such information indicative of the Company’s expected future results. The pro forma results of operations do not include any future cost savings or other synergies that may result from the Arrangement or any estimated costs that have not yet been incurred by the Company to integrate the Enerplus assets.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Revenues$1,529,346 $1,236,247 $2,947,425 $2,518,005 
Net income315,626 263,987 574,643 595,469 
Net income per share:
Basic$5.05 $4.25 $9.23 $9.57 
Diluted4.95 4.12 9.04 9.31 
2023 Acquisition
On May 22, 2023, a wholly-owned subsidiary of the Company entered into a definitive agreement to acquire approximately 62,000 net acres in the Williston Basin from XTO Energy Inc. and affiliates, each a subsidiary of Exxon Mobil Corporation (collectively “XTO”), for total cash consideration of $375.0 million, subject to customary purchase price adjustments (the “2023 Williston Basin Acquisition”). The effective date of the 2023 Williston Basin Acquisition was April 1, 2023.
On June 30, 2023, the Company completed the 2023 Williston Basin Acquisition for total cash consideration of $361.6 million, including a deposit of $37.5 million paid to XTO upon execution of the purchase and sale agreement and $324.1 million paid to XTO at closing (including customary purchase price adjustments). The Company funded the 2023 Williston Basin Acquisition with cash on hand. The 2023 Williston Basin Acquisition was accounted for as a business combination and was recorded under the acquisition method of accounting in accordance with ASC 805. The post-acquisition operating results and pro forma revenue and earnings for the 2023 Williston Basin Acquisition were not material to the Company’s condensed consolidated financial statements and have therefore not been presented.
Purchase price allocation. The Company recorded the assets acquired and liabilities assumed in the 2023 Williston Basin Acquisition at their estimated fair value on June 30, 2023 of $361.6 million. The allocation of the fair value to the identifiable assets acquired and liabilities assumed resulted in no goodwill or bargain purchase gain being recognized. Determining the fair value of the assets and liabilities of the 2023 Williston Basin Acquisition required judgement and certain assumptions to be made. See Note 5—Fair Value Measurements for additional information.
The table below presents the total consideration transferred and its allocation to the identifiable assets acquired and liabilities assumed as of the acquisition date on June 30, 2023. As provided under ASC 805, the purchase price allocation may be subject to change for up to one year after June 30, 2023. As of December 31, 2023, the purchase price was finalized with an immaterial adjustment to the preliminary purchase price allocation presented below.
Purchase Price Consideration
(In thousands)
Cash consideration transferred$361,609 
Purchase Price Allocation
(In thousands)
Assets acquired:
Oil and gas properties$367,672 
Inventory1,844 
Total assets acquired$369,516 
Liabilities assumed:
Asset retirement obligations$6,771 
Revenue and production taxes payable1,136 
Total liabilities assumed$7,907 
Net assets acquired$361,609