CALGARY, AB, Feb. 2, 2022
/CNW/ - Enerplus Corporation ("Enerplus" or the "Company") (TSX:
ERF) (NYSE: ERF) today announced preliminary fourth quarter and
full year 2021 production and capital spending, along with plans to
initiate a divestment process for its Canadian assets. In addition,
the Company announced its intention to change its reporting
currency to U.S. dollars and the future presentation of its
production volumes to a "net", after deduction of royalty
basis.
FOURTH QUARTER 2021 OPERATIONS UPDATE
Fourth quarter 2021 total production was 128,000 BOE per day,
which was at the high-end of the Company's guidance of 124,500 to
128,500 BOE per day. Fourth quarter liquids production was 81,000
barrels per day, in line with the Company's guidance of 80,000 to
83,000 barrels per day. Capital spending in the fourth quarter was
C$102 million.
For the full year 2021, total production was 114,700 BOE per
day, which was at the high-end of the Company's full year guidance
of 113,750 to 114,750 BOE per day. Full year liquids production was
70,200 barrels per day, in line with the Company's full year
guidance of 69,750 to 70,750 barrels per day. Capital spending in
2021 was C$378 million compared to
guidance of C$380 million.
All the above 2021 production information is presented on a
"company interest" basis, as described further below.
DIVESTMENT PROCESS FOR CANADIAN ASSETS
As Enerplus continues to focus on its strategic position in the
Williston Basin, the Company plans to initiate a divestment process
for its Canadian assets. Production from Enerplus' Canadian assets
averaged approximately 9,100 BOE per day ("company interest" basis)
in the fourth quarter of 2021, representing 7% of the Company's
total production.
If the marketing effort is successful, Enerplus would work to
conclude the divestment process by mid-2022, and will continue to
have a Canadian head office.
CHANGE IN REPORTING CURRENCY AND THE PRESENTATION OF
PRODUCTION VOLUMES
Enerplus is electing to change its reporting currency from
Canadian dollars to U.S. dollars since the majority of its crude
oil and natural gas properties are in the U.S. The change in
reporting currency is a voluntary change which is accounted for
retrospectively. All prior periods will be restated to U.S.
dollars.
In conjunction with the reporting currency change, Enerplus also
intends to change the presentation of its production volumes to be
on a "net" basis, where permitted. As defined in Canadian National
Instrument 51-101 and consistent with U.S. SEC reporting practices,
"net" production means the Company's working interest share of
production after the deduction of any royalty obligations plus the
Company's royalty interests. Enerplus' royalty obligations are
approximately 20% of the Company's working interest share.
Previously, Enerplus presented production volumes on a "company
interest" basis which does not deduct royalties paid to others.
With these changes, production volumes presented by Enerplus on a
"net" basis are expected to be lower than those presented
historically. The Company believes, however, this change in
presentation to "net" production in conjunction with the change in
reporting currency to U.S. dollars, should facilitate a more direct
comparison to other U.S. exploration and production companies.
The above noted changes will be in effect beginning with the
Company's reporting of its fourth quarter and full year 2021
operating and financial results and reserves, which are scheduled
for release on February 24, 2022.
2022 PRELIMINARY OUTLOOK PROVIDED IN U.S. DOLLARS AND ON A
NET PRODUCTION BASIS
In November 2021, Enerplus
announced a preliminary 2022 capital budget of C$500 million expected to result in average
company interest production of approximately 122,000 BOE per day,
including 75,000 barrels per day of liquids. Following the
Company's change to U.S. dollar and net volume reporting, this
preliminary budget corresponds to approximately US$400 million with net production of 98,000 BOE
per day, including 60,000 barrels per day of liquids.
Enerplus plans to provide comprehensive 2022 guidance with its
fourth quarter and full year 2021 operating and financial results
on February 24, 2022.
Summary tables at the end of this news release show the
Company's 2021 guidance and preliminary results and 2022
preliminary outlook on both a Canadian dollar, company interest
production basis and a U.S. dollar, net production basis.
UPDATE ON SHARE REPURCHASE PROGRAM
Between November 2021 through the
end of January 2022, Enerplus
repurchased 12.1 million shares at an average price of C$12.89 per share for a total cost of
C$155.5 million under the Company's
current C$200 million share
repurchase program. Enerplus expects to complete the balance of
this share repurchase program by the end of the first quarter of
2022 whereupon its remaining normal course issuer bid ("NCIB")
authorization will be approximately 3% of shares outstanding. The
Company can renew its NCIB in August
2022 and will continue to evaluate opportunities to
enhance cash returns to shareholders.
SUMMARY TABLES
2022 Preliminary Outlook Summary
|
2022 Preliminary
Outlook(1)
(C$, company interest
production basis)
|
2022 Preliminary
Outlook(1)
(US$, net production
basis)
|
Capital
spending(2)
|
C$500
million
|
US$400
million
|
Average total
production
|
122,000
BOE/day
|
98,000
BOE/day
|
Average liquids
production
|
75,000
bbls/day
|
60,000
bbls/day
|
|
|
(1)
|
2022 preliminary
outlook was provided on November 4, 2021.
|
(2)
|
Based on a USD/CDN
exchange rate of 1.25.
|
2021 Guidance and Preliminary Results Summary
|
C$, company interest
production basis
|
US$, net production
basis
|
|
2021
Guidance
|
2021 Actual
|
2021
Guidance
|
2021 Actual
|
Capital
spending
|
C$380
million
|
C$378
million
|
US$303
million
|
US$302
million
|
Average total
production
|
113,750–114,750
BOE/day
|
114,700
BOE/day
|
91,450–92,250
BOE/day
|
92,200
BOE/day
|
Average liquids
production
|
69,750–70,750
bbls/day
|
70,200
bbls/day
|
55,950–56,750
bbls/day
|
56,300
bbls/day
|
Average royalty and
production tax rate
|
26%
|
|
Royalty rate not
applicable
Production tax
7%
|
|
Operating
expense
|
C$8.80/BOE
|
|
US$8.73/BOE
|
|
Transportation
expense
|
C$3.85/BOE
|
|
US$3.82/BOE
|
|
Cash G&A
expense
|
C$1.15/BOE
|
|
US$1.14/BOE
|
|
Current Income Tax
expense
|
US$3 million
|
|
US$3 million
|
|
About Enerplus
Enerplus is an independent North American oil and gas
exploration and production company focused on creating long-term
value for its shareholders through a disciplined, returns-based
capital allocation strategy and a commitment to safe, responsible
operations. For more information, visit the Company's website at
www.enerplus.com.
PRESENTATION OF PRODUCTION INFORMATION
All references to "liquids" in this news release include light
and medium crude oil, heavy oil and tight oil (all together
referred to as "crude oil") and natural gas liquids on a combined
basis.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking
information and forward-looking statements within the meaning of
applicable securities laws ("forward-looking information"). The use
of any of the words "expect", "anticipate", "continue", "estimate",
"guidance", "will", "believes", "intends" and "plans" and similar
expressions are intended to identify forward-looking information.
In particular, but without limiting the foregoing, this news
release contains forward-looking information pertaining to the
following: expected 2021 capital spending and average production
volumes, including anticipated changes in volumes as a result of
the change in presentation of such information, and the anticipated
production mix; 2022 preliminary production outlook; the results
from our drilling program, timing of related production, and
ultimate well recoveries; future royalty rates on our production;
our anticipated share repurchases under current and future normal
course issuer bids and the anticipated timing thereof; preliminary
capital spending levels in 2022 and in the future, financial
capacity and liquidity and capital resources to fund capital
spending and working capital requirements.
The forward-looking information contained in this news
release reflects several material factors, expectations and
assumptions including, without limitation: that we will conduct our
operations and achieve results of operations as anticipated; that
our development plans will achieve the expected results; that lack
of adequate infrastructure will not result in curtailment of
production and/or reduced realized prices beyond our current
expectations; current commodity prices, differentials and cost
assumptions; the general continuance of current or, where
applicable, assumed industry conditions; the continuation of
assumed tax, royalty and regulatory regimes; the accuracy of the
estimates of our reserve and contingent resource volumes; the
continued availability of adequate debt and/or equity financing and
adjusted funds flow to fund our capital, operating and working
capital requirements, and dividend payments as needed; the
continued availability and sufficiency of our adjusted funds flow
and availability under our bank credit facility to fund our working
capital deficiency; the availability of third party services; and
the extent of our liabilities. We believe the material factors,
expectations and assumptions reflected in the forward-looking
information are reasonable but no assurance can be given that these
factors, expectations and assumptions will prove to be
correct.
The forward-looking information included in this news release
is not a guarantee of future performance and should not be unduly
relied upon. Such information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information including, without limitation:
decreases in commodity price or volatility in commodity prices;
changes in realized prices of Enerplus' products; changes in the
demand for or supply of our products; unanticipated operating
results, results from our capital spending activities or production
declines; curtailment of our production due to low realized prices
or lack of adequate infrastructure; changes in tax or environmental
laws, royalty rates or other regulatory matters; changes in our
capital plans or by third party operators of our properties;
increased debt levels or debt service requirements; inability to
comply with debt covenants under our bank credit facility and
outstanding senior notes; inaccurate estimation of our oil and gas
reserve and contingent resource volumes; limited, unfavourable or a
lack of access to capital markets; increased costs; a lack of
adequate insurance coverage; the impact of competitors; reliance on
industry partners and third party service providers; and certain
other risks detailed from time to time in our public disclosure
documents (including, without limitation, those risks and
contingencies described under "Risk Factors and Risk Management" in
Enerplus' 2020 MD&A and in our other public filings).
The forward-looking information contained in this press
release speaks only as of the date of this press release, and we do
not assume any obligation to publicly update or revise such
forward-looking information to reflect new events or circumstances,
except as may be required pursuant to applicable laws.
SOURCE Enerplus Corporation