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Investor Update – Enerplus Corp

Enerplus Corp · Feb 28, 2014 · 46 slides

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Slides

  1. Investor Update – Enerplus Corp – slide 1
    Investor Update ERF - TSX & NYSE February 28, 2014
  2. Investor Update – Enerplus Corp – slide 2
    Enerplus Proven Strategy Focused, top tier Strong financial resource plays & flexibility mature assets with low decline Deliver sustainable, profitable growth and income to Disciplined, investors Competitive growth &…
  3. Investor Update – Enerplus Corp – slide 3
    2014 Outlook ERF TSX & NYSE 2013 2014E Change Annual Average Production (BOE/day) 89,793 96,000-100,000 +9% Oil & Liquids Weighting 46% 48% +4% Capital Expenditures (MM) 681 760 +12% Operating Expenses (/BOE) 10.48 10.25 -4% Funds…
  4. Investor Update – Enerplus Corp – slide 4
    Concentrated Portfolio 2014E Geographic Production Split U.S. OilWilliston Basin Operated Bakken/Three Forks position with 145 net future U.S. 2014 Capital drilling locations 50% Canada 40% Upside potential via downspacing, lower…
  5. Investor Update – Enerplus Corp – slide 5
    Demonstrated Growth Annual Production 2P Reserves* 100 98 450 90 406 90 400 82 80 346 75 350 322 306 MBOE/day 70 51 300 43% MMBOE 48 49% 60 42 250 40% 42 43% 50 47% 200 40 150 30 100 49% 53% 55% 47% 20 33…
  6. Investor Update – Enerplus Corp – slide 6
    Demonstrated Per Share Growth Production/share Reserves/share* 0.20 2.25 Production Per Thousand Shares 0.18 2.00 Reserves Per Thousand Shares 0.18 0.16 2.00 0.16 0.15 0.15 1.78 1.74 1.71 1.75 0.14 1.50 0.12 1.25…
  7. Investor Update – Enerplus Corp – slide 7
    Competitive Reserve Addition Costs F&D Costs FD&A Costs 30 30 26.26 25 24.21 25 22.92 20 /BOE 20 /BOE 3 year: 17.89 19.25 3 year: 15 15 14.66 11.28 10 10 8.36 5 5 0 0 2011 2012 2013 2011 2012 2013 * Based…
  8. Investor Update – Enerplus Corp – slide 8
    Delivering Funds Flow Growth 2014E Funds Flow expected to grow by 7% 810* 800 754 700 644 600 574 Higher production volumes and oil weighting has helped Millions 500 drive funds flow growth over 400 past three years…
  9. Investor Update – Enerplus Corp – slide 9
    Financial Flexibility 2.0 2.0 D/FF 1.8 D/FF 1.6x 1.7x D/FF* 1.8 Strong financial flexibility 1.6 D/FF 1.4x 1.5x 1.6 driven by: 1.4 1.4 Debt to Funds Flow Payout Ratio 1.2 1.2 APO o Cash flow growth 1.0…
  10. Investor Update – Enerplus Corp – slide 10
    Funds Flow Protection Crude Oil Hedge Positions* Natural Gas Hedge Positions* 100% (/bbl) 100% (/Mcf) 90% 90% % of net production after royalties 80% % of net production after royalties 80% 70% 70% 70% 60% 60% at 50%…
  11. Investor Update – Enerplus Corp – slide 11
    Core Oil Assets
  12. Investor Update – Enerplus Corp – slide 12
    Operated Light Oil Assets in the Williston Basin 2014E Production: 28,000 BOE/day Sleeping Giant 20% Fort Berthold 80% 2013 2P Reserves*: 131 MMBOE Sleeping Giant (Elm Coulee) Sleeping Fort Giant Berthold 20% Fort…
  13. Investor Update – Enerplus Corp – slide 13
    Top Tier Oil Asset: Fort Berthold, North Dakota Key Facts Fort Berthold Indian Reservation OOIP 1722 MMbbls/1280 DSU OOIP (W.I.) 1 billion bbls Net Acreage 73,000 (114 sections) 2P Reserves at Dec 31, 2013 105.4 MMBOE Best Est.…
  14. Investor Update – Enerplus Corp – slide 14
    Fort Berthold: Production Growth 25 22 20 2014E annual production growth of 33% to 17 +22,000 BOE/day MBOE/day 15 Self funded in 2013 12 10 Expected to generate free cash flow in 2014 5 5 - 2011 2012 2013…
  15. Investor Update – Enerplus Corp – slide 15
    Fort Berthold: Reserves* Growth 2P: 110 105.4 100 Replaced 400% of 2013 2P: 90 86.1 production adding 24.9 80 MMBOE of reserves at 70 F&D cost (incl. FDC) of 2P: 19.74/BOE MMBOE 60 56.2 50 Three year F&D cost of 40…
  16. Investor Update – Enerplus Corp – slide 16
    Significant Running Room at Fort Berthold YE 2P + CR (EUR)* 145 net future drilling locations 7 years of inventory 2P recovery factor 15% Downspacing Upside 150 net additional net locations 7 years additional inventory…
  17. Investor Update – Enerplus Corp – slide 17
    Evaluating Upside Potential at Fort Berthold EOG 2 Section Bakken Three Forks 277,000 bbl Density & Lower TF in approx. 7 months Snakes Pad Upper Three Forks (ERF 17.8% W.I.) Fort Berthold productive throughout EOG 2ndBench TF…
  18. Investor Update – Enerplus Corp – slide 18
    Improving Capital Efficiencies at Fort Berthold Capital Efficiency Total Well Costs 35,000 25 14 13.1 12.1 30 Day Cumulative Oil (Bbls) 30,000 12 Long Well Cost (USMM) Long Well Capital Efficiency 30,000 19.8 20…
  19. Investor Update – Enerplus Corp – slide 19
    Enerplus Results How Do We Compare Wells drilled without high volume completions Wells drilled with high volume completions 18
  20. Investor Update – Enerplus Corp – slide 20
    Fort Berthold: Improved Performance through Completion Optimization EUR EUR EUR 800 650 500 Mbbls Mbbls Mbbls NPV10 (MM) 14.7 9.9 4.7 IRR (%) 62 42 24 BESC (/bbl) 51.09 58.63 71.38 Payout (Yrs) 1.7 2.3 3.5 Recycle Ratio 3.8…
  21. Investor Update – Enerplus Corp – slide 21
    Takeaway Capacity Overbuilt in Montana & North Dakota Nov. 2013 Cromer production* 1.1 MMbbls/day East Pipe Rail Coast by West Rail Coast by Operationally Rail Available 53 515 Capacity Clearbrook 0 800 Operationally…
  22. Investor Update – Enerplus Corp – slide 22
    Low Decline Canadian Waterflood Assets Key Facts 6% 19% 6% OOIP (W.I.) 1.3 billion bbls 10% Recovery Factor to Date 24% 2014E 2P Reserves at Dec 31, 2013 87 MMBOE Production 9% Best Est. Contingent Resource 59 MMbbls 28% (Dec…
  23. Investor Update – Enerplus Corp – slide 23
    Free Cash Flow from Waterflood Assets 350 NOI: 326 NOI: 306 NOI: NOI: 138 NOI: 300 286 272 172 273 120 116 113 Average 55% 250 reinvestment Million 200 delivering 5% 150 58% CAGR in 61% 56% 58% production 44%…
  24. Investor Update – Enerplus Corp – slide 24
    Core Natural Gas Assets
  25. Investor Update – Enerplus Corp – slide 25
    U.S. Core Gas: Marcellus Marcellus Isopach Key Facts Net Acreage 57,500 acres 2P Reserves at Dec 31, 2013 601 Bcf Best Est. Contingent 1.3 Tcf Resource (Dec 31, 2013) Future Net Drilling Locations 240 wells Q4 2013 Production…
  26. Investor Update – Enerplus Corp – slide 26
    Marcellus: Delivering Production Growth Annual Production 140 140 Marcellus production 120 120 continues to exceed 120 100 expectations 95 MMcf/day 80 2014E annual production 60 of 120140 MMcf/day 41 o 37% increase…
  27. Investor Update – Enerplus Corp – slide 27
    Marcellus: Delivering Reserves* Growth 2P: 601 600 2013 proved plus probable reserves increased by 168% 500 50% of corporate 2P natural Bcf of Natural Gas 400 gas reserves 300 2P: 225 37 net future drilling 1P: 200…
  28. Investor Update – Enerplus Corp – slide 28
    Marcellus: Superior Dry Gas Performance and Competitive Economics 2013 Gross On-Streams 13 Bcf EUR EUR EUR 13 12 10 US4.50/Mcf Bcf Bcf Bcf NPV10 (MM) 10.5 7.9 4.3 12 Bcf IRR (%) 72 51 28 BESC (/Mcf) 2.33 2.66 3.05 10 Bcf…
  29. Investor Update – Enerplus Corp – slide 29
    Marcellus Takeaway Capacity 60% of production sold on Tennessee Line 300 Wyoming Pipeline 40% of production sold on Transco Leidy December 2013 production averaged 170 MMcf/day Regional firm, must-take contracts of 6570…
  30. Investor Update – Enerplus Corp – slide 30
    Building the Near-Term Marcellus Basis View 12 Incremental Take-Away Capacity 10 Incremental NE Demand Incremental Export out of Region 8 Midpoint Production Estimate Bcf/day 6 4 2 0 Q2 2015 Q1 2014 Q2…
  31. Investor Update – Enerplus Corp – slide 31
    13 Bcf of Projects Planned Project Owner Incremental Takeaway (Bcf/d) In Service REX Backhual KM 0.2 Q1 2014 ANR Lebanon Reversal TCPL 0.4 Q1 2014 Tenessee Rose Lake 300 Line KM 0.2 Q4 2014 NE Connector Transco 0.1 Q4 2014 West Side…
  32. Investor Update – Enerplus Corp – slide 32
    Core Canadian Natural GasDeep Basin Core growth area with approximately 450 potential net future drilling locations in the Duvernay Wilrich and Duvernay 85,000 net acres of undeveloped land, 160,000 net acres of 100% WI high…
  33. Investor Update – Enerplus Corp – slide 33
    Canadian GasDeep Basin (Wilrich) R21 R20 R19 R18 R17 R16 R15 R14W5 Contiguous land blocks in highly prospective regions 36 31 36 31 36 31 36 31 36 31 36 31 36 31 Key Facts T53 T53 - EdsonERF smaller acreage Key properties Edson,…
  34. Investor Update – Enerplus Corp – slide 34
    Wilrich Drilling Cost Improvement 58% reduction drilling days First 8 wells Achieved 40% cost reduction Drilling Days (Spud to TD) Drilling Costs (Spud to TD) HZ 1 55 HZ 3 9 50 HZ 1 HZ 2 8 HZ 4 45 HZ…
  35. Investor Update – Enerplus Corp – slide 35
    Wilrich Completion Performance 18 Completions Costs vs. 30 Day IP 16.6 16 46% improvement in 14 completion costs due to: 12 11.5 10 o Elimination of CO2 Millions and N2 8 o Lower power 6.0 6 5.6 consumption o Less…
  36. Investor Update – Enerplus Corp – slide 36
    WilrichWell Performance 5 bcf Type Curve 6 Bcf Type Curve EUR EUR EUR 7 Bcf Type Curve AECO 4.00/Mcf 7 Bcf 6 Bcf 5 Bcf 3,500 16-15-049-19W5 15-18-050-19W5 NPV10 (MM) 6.7 5.3 3.9 14-30-050-19W5 3,000 13-29-050-19W5 IRR (%) 46 38…
  37. Investor Update – Enerplus Corp – slide 37
    Duvernay ShaleWillesden Green R12W5 R11W5 R10W5 R9W5 R8W5 R7W5 R6W5 R5W5 R4W5 R3W5 85,000 net acres (100% W.I.) land Producing Wells Drilled Wells position built over past 3 years at Licensed…
  38. Investor Update – Enerplus Corp – slide 38
    Our Competitive Advantage Focused portfolio in top tier resource plays: Bakken, Marcellus, Deep Basin & Waterfloods Continued focus on capital disciplinedelivering 10% production growth in 2014 with a target capital efficiency…
  39. Investor Update – Enerplus Corp – slide 39
    Supplemental Information
  40. Investor Update – Enerplus Corp – slide 40
    Drilling Inventory/Opportunity 2P & CR Inventory*: 650 Future Drilling Locations Core Waterfloods Marcellus 160 240 Deep Basin Fort Berthold 100 145 * 2P Reserves and Contingent Resources locations at December 31,…
  41. Investor Update – Enerplus Corp – slide 41
    Production Composition 2014E Production 2014E Crude Oil Composition U.S. U.S. Gas Liquids Canada Heavy 24% 26% 22% Canada Medium U.S. Light 11% 58% Canada Canada Gas Liquids 28% 22% Canada Light 9% Differential/Basis…
  42. Investor Update – Enerplus Corp – slide 42
    2014 Funds Flow Sensitivities Est. effect on Est. effect on 2014 Funds Flow 2014 Funds Flow per Share 2014 Sensitivities ( Million) (/share) Change of 5.00/bbl WTI crude oil 29.1 0.14 Change of 0.50/Mcf NYMEX natural gas 28.8 0.14…
  43. Investor Update – Enerplus Corp – slide 43
    Debt Composition as at December 31, 2013 Senior Bank Credit Facility - 1 billion Notes* Unused Capacity US741MM 11 banks in Enerplus bank credit facility CDN70MM 786MM Unsecured, covenant-based with current borrowing rate of…
  44. Investor Update – Enerplus Corp – slide 44
    Senior Notes Maturities* Average interest rate of 5.8%** 700 620 600 500 Millions 400 300 200 94 100 49 48 0 2014 2015 2016 2017 2018 and beyond * As at December 31, 2013. US amounts converted at US/CDN 1.0636.…
  45. Investor Update – Enerplus Corp – slide 45
    Enerplus Share Ownership Investor Composition Geographic Composition Total Retail Total Institutional 65% 35% 20% 44% 42% 21% 58% 15% US & Other Retail US & Other Institutional Canadian Retail Canadian Institutional…
  46. Investor Update – Enerplus Corp – slide 46
    Investor Relations Contacts Jo-Anne M. Caza 1-800-319-6462 Vice-President, Corporate & Investor Relations investorrelationsenerplus.com 403-298-2273 jcazaenerplus.com www.enerplus.com The Dome Tower Suite 3000, 333 7th Ave SW…

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