CALGARY, Dec. 12, 2016 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX & NYSE: ERF) announces that
its wholly-owned subsidiary, Enerplus Resources (USA) Corporation, has entered into a
definitive agreement to sell non-operated assets in North Dakota (the "Assets") for total cash
consideration of US$292 million
(approximately C$385 million),
subject to estimated cash tax of US$12
million and customary closing adjustments. The divestment
includes approximately 5,800 net acres primarily located on the
Fort Berthold Indian Reservation with an average working interest
per drilling spacing unit of 8%. Production from the Assets
averaged approximately 5,000 BOE per day (approximately 4,000 BOE
per day net of royalties) during the third quarter of 2016.
The Assets comprise approximately 8% of the Company's existing
net acreage in North Dakota. Upon
closing of the divestment, Enerplus will hold an operated position
in North Dakota of approximately
65,500 net acres. Production from Enerplus' operated North Dakota assets averaged 23,700 BOE per
day (90% liquids) in the third quarter of 2016.
"We have established a position as one of the leading operators
in the Williston Basin. This
divestment of our non-operated, low-working interest acreage is
highly accretive and will further improve our focus on our operated
core acreage position allowing us to more efficiently allocate
capital to the play," commented Ian C.
Dundas, President & CEO. "This transaction also
highlights our significant running room in the core of the
Williston Basin where our operated
acreage has, on average, approximately half the drilled well
density of the divested acreage."
Mr. Dundas added, "The proceeds from this sale will provide
additional financial flexibility and a source of funding for the
acceleration of activity at our operated Fort Berthold acreage over
the coming years."
Evercore and RBC Richardson Barr are acting as financial
advisors to Enerplus on this transaction.
Enerplus expects to provide updated 2017 capital plans and
guidance in early 2017.
Increased Drilling Inventory at Fort Berthold
As part of Enerplus' ongoing development optimization at Fort
Berthold, the Company continues to progress its evaluation of well
density. Based on analysis of Enerplus' higher density units and
data from other operators in the basin, Enerplus believes there is
strong technical and economic justification to support a higher
recovery factor assumption and higher well density than the
Company's previous development plan.
Enerplus is now planning for higher density in the Middle Bakken
zone, increasing to six wells per drilling spacing unit, compared
to four wells previously. At this time, Enerplus has not changed
its planning assumptions for well density in the Three Forks'
zones. Overall, this results in an average density of approximately
ten wells per drilling spacing unit leading to an estimated 550
gross remaining drilling locations (465 net). This increase in
gross operated inventory represents growth of nearly 40% from
previous estimates. Enerplus' 550 gross remaining drilling
locations were comprised of 92 proved plus probable undeveloped
reserves locations, 155 development pending best estimate
contingent resources locations, and 303 unbooked future locations
at year-end 2015. Enerplus expects to have drilled 20 gross
locations in 2016. The remaining 530 gross locations represent
approximately 16 years of drilling inventory under a two rig
program.
In connection with the ongoing down-spacing analysis, Enerplus
is continuing to modify its completion design in order to optimize
capital efficiencies and individual well recoveries while
maximizing economic returns and recoverable resources per drilling
spacing unit.
About Enerplus
Enerplus Corporation is a responsible
developer of high quality crude oil and natural gas assets in
Canada and the United States, committed to creating value
for its shareholders through a disciplined capital investment
strategy.
BARRELS OF OIL EQUIVALENT
This news release also contains references to "BOE" (barrels
of oil equivalent). Enerplus has adopted the standard of six
thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl) when
converting natural gas to BOEs. BOEs may be misleading,
particularly if used in isolation. The foregoing conversion ratios
are based on an energy equivalency conversion method primarily
applicable at the burner tip and do not represent a value
equivalency at the wellhead. Given that the value ratio based on
the current price of oil as compared to natural gas is
significantly different from the energy equivalent of 6:1,
utilizing a conversion on a 6:1 basis may be misleading.
PRESENTATION OF PRODUCTION INFORMATION
U.S. industry protocol is to present production volumes net
of royalties. Under Canadian industry protocol, production volumes
are presented on a gross basis before deduction of royalties. In
order to continue to be comparable with our Canadian peer
companies, the information contained within this news release
presents our production and BOE measures on a "company interest"
basis (before deduction of Crown and other royalties, plus
Enerplus' royalty interest), unless otherwise specified.
DRILLING INVENTORY
Drilling locations associated with proved plus probable
undeveloped reserves have been evaluated by Enerplus' independent
qualified reserves evaluators in accordance with the Canadian Oil
and Gas Evaluation Handbook (the "COGE Handbook").
Drilling locations associated with unrisked "best estimate"
economic contingent resources in "development pending" project
maturity sub-class have been evaluated by internal qualified
reserves evaluators and audited by Enerplus' independent qualified
reserves evaluators in accordance with the COGE Handbook.
Unbooked future drilling locations are not associated with
any reserves or contingent resources of Enerplus, and have been
identified by internal qualified reserves evaluators.
FORWARD-LOOKING INFORMATION AND STATEMENTS
Except for the historical and present factual information
contained herein, the matters set forth in this news release,
including words such as "anticipates", "expects", "projects",
"plans" and similar expressions, are forward-looking information
that represents management of Enerplus' internal projections,
expectations or beliefs concerning, among other things, Enerplus'
development plan, well inventory and production in North Dakota, and the proposed sale of
non-operated North Dakota assets,
including anticipated proceeds therefrom and production therewith,
and expected closing thereof. The projections, estimates and
beliefs contained in such forward-looking statements necessarily
involve known and unknown risks and uncertainties, which may cause
Enerplus' actual performance and financial results in future
periods to differ materially from any projections of future
performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other
things, Enerplus' failure to complete the proposed asset
disposition, on the terms and within the timeframe described herein
or at all, and those described in Enerplus' filings with the
Canadian and U.S. securities authorities. Accordingly,
holders of Enerplus shares and potential investors are cautioned
that events or circumstances could cause results to differ
materially from those predicted.
Follow @EnerplusCorp on Twitter at
https://twitter.com/EnerplusCorp.
Ian C. Dundas
President & Chief Executive Officer
Enerplus Corporation
SOURCE Enerplus Corporation