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MAY 2013 INVESTOR UPDATE – Enerplus Corp

Enerplus Corp · May 10, 2013 · 51 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 1
    Investor Update May 2013
  2. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 2
    Corporate Profile Ticker Symbol (TSX & NYSE) ERF Enterprise Value(1) 4.0 billion Average Daily Trading Value (Q1 2013) 24 million 2013E Average Daily Production 82,000 85,000 BOE/day 2013E Exit Production 84,000 88,000 BOE/day Oil…
  3. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 3
    Corporate Strategy Deliver sustainable, profitable growth and income to investors Development of top tier growth plays and more mature foundation assets Disciplined, return-based capital allocation and active portfolio management…
  4. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 4
    Improved Asset Base US Oil - Bakken/Three Forks 4-6 years future drilling inventory production potential of 20-25,000 MBOE/day Production Mix U.S. 40% US Natural Gas Marcellus Doubled production in 2012 200 future drilling…
  5. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 5
    Delivering Organic Growth 90 80 70 60 MBOE/day 50 40 30 20 10 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Oil & Natural Gas Liquids Natural Gas 5
  6. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 6
    Delivering Reserves Growth Total Reserves* Crude Oil Reserves* 400 225 346 MMBOE 192 350 200 MMbbls 322 MMBOE 171 306 MMBOE MMbbls 175 150 300 MMbbls 150 250 47% 43% 40% MMbbls MMBOE 125 200 100 150 75 100…
  7. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 7
    Delivering Funds Flow Growth Funds flow driven by 25% 700 increase in oil production from 2011 to 2013E 600 Expect funds flow growth and 500 improvement in adjusted payout ratio in 2013 Millions 400 Balance sheet remains…
  8. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 8
    Preserving Financial Strength Strategic steps taken in 2012 to manage our balance sheet: 2.5 331 million equity issue Debt to Funds Flows (x) 2.0 405 million private 1.7x placement of long-term debt 1.6x 1.5 Dividend…
  9. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 9
    2013 Plans Improve capital efficiencies by reducing drilling and completion costs and improving operational execution Continue to develop and grow production in Fort Berthold, Canadian waterfloods, Marcellus Modest appraisal activities…
  10. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 10
    2013 First Quarter Results on Track Strong production performance Disciplined capital spending cost savings in key areas Maintaining all guidance targets for the full year Q1 2013 2013 GUIDANCE Funds Flow 173 million Adjusted Payout…
  11. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 11
    Fort Berthold: Delivering Organic Oil Growth Q1 2013 record production of Expected to exit 2013 at over 14,500 BOE/day 18,000 BOE/day Expect to drill and 16 complete 20 - 25 net wells 14 (2/3 Bakken, 1/3 Three 12 Forks) 10…
  12. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 12
    Delivering Growth in the Marcellus Expect to exit 2013 at 75 Q1 2013 record production of MMcf/day (60% growth) over 79 MMcf/day Represents over 25% of 80 corporate natural gas 70 production 60 Location and low cost structure 50…
  13. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 13
    2013 Cash Flow Protection Crude Oil Hedge Positions* Natural Gas Hedge Positions* 70% 70% 64% 60% 60% % of net after royalty production 50% 50% 40% 40% 33% 33% Hedged at 8% at 8% at 30% 100.44/bbl 30% US3.45 US3.85 25%…
  14. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 14
    Continued Focus on Portfolio Optimization Rationalization of non-core assets to improve operational focus, profitability and provide funding source for growth areas YTD 2013 - sold 600 BOE/day of non-operated, low working interest oil…
  15. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 15
    Significant Value Creation Delivered from A&D Activity Sleeping Giant Manitoba Acquisition Sale Purchase Price (000s) 118,000 218,000 Working Interest 90% 52% Funds Flow multiple 4.5 7.0 /BOE/day 84,000 142,000 Production…
  16. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 16
    Attractive Valuation Canadian U.S. Enerplus(2) Competitor Average(2) Competitor Average(3) (Range) (Range) 2013E Price/CF 3.9x 6.7x 5.4x (2.4x 9.9x) (2.9x 11.5) 2013E EV Multiple(1) 5.7x 8.1x 6.7x (4.4 10.6x) (4.1x 12.9x) 2013E…
  17. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 17
    Market Sentiment Improving Delivery of 2012 targets and improving natural gas outlook YTD 2013 total return of 13%* Current analyst consensus*: 10 buys, 4 holds, 1 sell Average target price of 16.20/share Increasing institutional…
  18. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 18
    Why Enerplus Financial strength and improving sustainability Capital discipline, improving costs, capital efficiencies and focus Delivering attractive reserve, production and funds flow growth Compelling assets in Canada and U.S. Low…
  19. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 19
    Core Oil Assets
  20. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 20
    Top Tier Light Oil Play in North Dakota Current Operated and Non-Operated Locations OOIP 17 22 MMbbls/1280 DSU Net Acreage (90% WI) 69,000 (108 sections) 2012 P+P Reserves 86.1 MMBOE 2012 Contingent Res. 33.5 MMBOE Est. Future…
  21. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 21
    Cost Effective Reserves Growth at Fort Berthold Total 2P reserves have nearly quadrupled since 2010 at Fort Berthold 100,000 86.1 MMBOE at end of 2012, up 53% 90,000 from YE 2011 80,000 Added 34.2 MMBOE of reserves at 70,000 F&D…
  22. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 22
    Fort Berthold Long HZ Well Performance Well results in line with expectations The range of EURs is dependent upon zone (Bakken or Three Forks) and well density. 3 EURs 500 800 Mbbls 5 4 4 6 Well Costs 11.5 million Projected IRR 20%…
  23. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 23
    Fort Berthold Well Spacing (1280 acres per drill spacing unit) 2P + CR (EUR) Potential Upside Bakken Bakken Middle Middle 800 800 Lower Bakken Lower Bakken Three Forks Three Forks 500 500 Estimated Recovery:…
  24. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 24
    Excess Takeaway Capacity in North Dakota 20% of our US Bakken production transported on rail in 2013, 80% through pipelines 10% is exposed to LLS pricing Q1 2013 realized US crude oil diffs were 6.10/bbl below WTI Excess…
  25. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 25
    Significant Value Creation Delivered from A&D Activity Sleeping Giant Manitoba Acquisition Sale Purchase Price (000s) 118,000 218,000 Working Interest 90% 52% Funds Flow multiple 4.5 7.0 /BOE/day 84,000 142,000 Production…
  26. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 26
    Low Decline Canadian Crude Oil Assets Growth potential with low average decline rate of 12% 25% of total production with significant free cash flow Production growth of 8% in 2012 Over 1.2 billion barrels original oil in place with…
  27. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 27
    Defining the IOR/EOR Opportunity 2012 CONTINGENT RESOURCE 2013E OOIP TOTAL YE 2P (MMBBL) 2013 NET PRODUCTION (NET) RECOVERED RESERVES TOTAL OPERATING ASSET (BOE/DAY) (MMBBL) (MMBBL) (MMBOE) IOR EOR TOTAL RECOVERABLE INCOME Medicine…
  28. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 28
    2013 Canadian Oil Capital Program 2013E Capital by Waterflood Prospect 2013E Capital Spend Allocation Other 13% Pembina 5 Way Med Hat Glauc C Plant & Facilities 9% 25% 42% Brooks 9% Giltedge 10% Freda Lake/ Drilling/ Pouce…
  29. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 29
    Waterflood Success Story - Medicine Hat Glauc C OOIP 224 MMBbls Recovery Factor to Date 9% Cumulative Production 19 MMBbls P+P Reserves (Dec 31, 2012) 21.1 MMBOE Best Estimate Contingent IOR 1.5 MMBOE Resource (Dec 31, 2012) EOR…
  30. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 30
    Medicine Hat Glauc C Production 5,000 4,500 60% growth achieved over 4,000 5 years with 65% reinvestment Average Daily Production (BOE/day) 3,500 3,000 2,500 2,000 Implemented new waterflood 1,500 development…
  31. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 31
    Success of IOR/EOR at Medicine Hat 50 3,500 45 3,000 40 35 2,500 30 BOE/day Million 2,000 25 1,500 20 15 66% 1,000 61% 10 67% 500 5 21% 0 - 2009 2010 2011 2012 Capital Free Cash Flow Avg Daily Production…
  32. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 32
    Core Natural Gas Assets
  33. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 33
    Marcellus: Reduced Spending on Dry Gas Bradford/Sullivan Counties 40% of 2013 capital budget Susquehanna/Wyoming Counties 25% of 2013 capital budget Lycoming County 20% of 2013 capital budget 44,000 net non-operated acres…
  34. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 34
    Delivering Growth in the Marcellus Represents over 25% of Q1 2013 record production of corporate natural gas over 79 MMcf/day production 80 Location and low cost structure 70 delivers attractive netback of 60 2.50/Mcf 50…
  35. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 35
    NE Pennsylvania Well Performance Wells in top tier acreage significantly outperforming type curve Susquehanna Bradford 8 Bcf E Lycoming 6 Bcf W Lycoming * Production data as of April 9, 2013 . Well counts shown are on…
  36. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 36
    Marcellus Economics 70% 2.35 - 2.75/Mcf breakeven in Bradford & 60% Susquehanna with 10 12 Bcf type wells 50% 5 Gas Rate of Return 40% 30% 4 Gas 20% 3 Gas 10% 0% 6 8 10 12 EUR (bcf) * Returns assume well cost…
  37. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 37
    An Abundance of Deep Gas Opportunities Approximately 188,000 net acres Montney of high working interest land 34,000 net acres of undeveloped land, 100% WI Significant potential in Wilrich, Duvernay and Montney Stacked Mannville…
  38. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 38
    Deep Gas Wilrich Contiguous land blocks in highly prospective regions Key properties Ansell, Minehead, Hanlan Net Acreage (acres) 54,000 acres (84 sections, majority 100% WI) Future HZ Drilling Locations Over 100 Est. EUR/Well 4.0…
  39. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 39
    Wilrich Positive Drilling Results 5.0 Bcf Well 6.0 Bcf Well 1,800 Pay NPV Pay NPV AECO IRR out 10% IRR out 10% 1,600 (/Mcf) % (Yrs) (MM) % (Yrs) (MM) Cumulative Production (MMcf) 1 Well 4.00 54 1.8 6.5 67 1.6 8.6 1,400 2…
  40. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 40
    Duvernay Shale Willesden Green Enerplus 40
  41. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 41
    Duvernay: Emerging Top Quality Liquids-Rich Resource Play Key Properties Willesden Green, AB Analogous rock characteristics to the Eagleford Net Acreage 83,000 acres (130 sections, 100% WI) Prolific over-pressured Devonian source rock…
  42. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 42
    Montney Cameron/Julienne Creek Key Properties Cameron/Julienne Creek Net Acreage 33,000 acres (+50 sections, 100% WI) Estimated OGIP 150 Bcf/section Future Hz Drilling 500+ Locations Est. EUR/Well 4.0 6.0 Bcfe Montney Vert. Test…
  43. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 43
    Upper Montney Type Curve Economics 4.0 Bcf Well 5.0 Bcf Well 6.0 Bcf Well AECO IRR PAYOUT NPV 10% IRR PAYOUT NPV 10% IRR PAYOUT NPV 10% (/MCF) % (YEARS) (MM) % (YEARS) (MM) % (YEARS) (MM) 4.00 19.6 3.7 1.6 31.2 2.6 3.3 44.0 2.0 4.8…
  44. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 44
    Supplemental Information
  45. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 45
    Production Composition and Differentials 2013E Production 2013E Crude Oil Composition US Gas US Oil Canada 16% 24% Heavy 25% Canada US Medium Light 12% 52% Canada Canada Gas Oil 34% 22% Canada Light 11% NGLs 4% 2013…
  46. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 46
    Competitive Reserve Addition Costs Finding and Development Costs 2012 Highlights: 45 40 39.04 Continued trend of improving 36.71 F&D costs - down 8% in 2012 35 30 66% of reserve additions from 26.26 24.21 crude oil /BOE…
  47. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 47
    Debt Composition Senior 700 Senior Note Maturities* Unutilized Notes* Capacity US742MM 585 600 686MM CAD70MM 500 Millions 400 300 200 Bank 91 Debt 100 46 46 45 314MM 0 2013 2014 2015 2016 2017 2018 and beyond…
  48. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 48
    Commitment to Dividend Model Investor Composition As of April 24, 2013 Capital markets place higher valuation on dividend paying energy companies Total Retail Total Institutional 67% 33% Canadian energy yield companies trading at…
  49. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 49
    2013 Capital Budget Sensitivities 2013 Sensitivities Est. effect on (as of April 24, 2013*) 2013 Funds Flow ( Million) Change of 5.00/bbl WTI crude oil 16 Change of 0.50/Mcf natural gas 20 Change of 1,000 BOE/day production 3…
  50. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 50
    Enerplus Share Ownership Investor Composition Geographic Composition Total Retail Total Institutional 67% 33% Canadian US/Intl Retail Institutional 19% 13% US/Other Canada 61% 39% Canadian US/Intl Retail Institutional 48%…
  51. MAY 2013 INVESTOR UPDATE – Enerplus Corp – slide 51
    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 Garth Doll The Dome Tower Manager, Investor…

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