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JUNE 2015 INVESTOR UPDATE – Enerplus Corp

Enerplus Corp · Jun 17, 2015 · 56 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. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 1
    ERF: TSX & NYSE Investor Update June 2015
  2. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 2
    Our Strategy: Sustainable Growth & Income Operational Conservative Top Tier Assets Excellence Financial Strategy Top resource plays in Proven technical expertise Strong balance sheet North America Disciplined, returnfocused Hedging…
  3. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 3
    Track Record: Consistent Reserves Growth 2P Reserves(1) MMBOE BOE/share 9% CAGR 2010 - 2014 450 429 2.20 401 50% 1P reserves represent 66% of 2P at 400 48% year-end 2014, with PDP at 74% of 1P 341 2.09 2.00 350 300 316 40% 1.98…
  4. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 4
    Track Record: Continuous Improvement in F&D Costs 2P F&D and FD&A Costs(1)(2) /BOE Corporately, 2014 2P F&D cost split was: 25 24.21 Oil: 18.90/BOE 22.92 Gas: 0.65/Mcf 20 (3) 2014 recycle ratio of 2.7x 15 F&D 3 year: 14.26 Fort…
  5. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 5
    Leading F&D Costs in Peer Group 2014 2P F&D Costs (including FDC)(1) /BOE 25 22 22 22 21 20 20 17 17 15 15 15 14 12 11 10 10 5 - Enerplus Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer…
  6. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 6
    Track Record: Continuous Improvement in Capital Efficiencies Capital Efficiencies(1) /BOE/day Strong operational focus driving 70,000 improvement in capital efficiencies 60,000 60,000 Significant efficiencies realized in Fort Berthold…
  7. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 7
    Competitive Capital Efficiencies 2014 Capital Efficiencies(1) /BOE/day 60,000 49,000 40,000 50,000 38,000 36,000 33,000 32,000 31,000 40,000 25,000 24,000 24,000 23,000 20,000 30,000 18,000…
  8. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 8
    Track Record: Maintaining Balance Sheet Strength Debt to Funds Flow(1)(2)(3) Net Debt Debt/ Millions Funds Flow Maintaining strong financial discipline 1,200 1,135 2.5 Debt levels have remained relatively flat 1,064 1,022 with…
  9. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 9
    Track Record: Significant Delivery of Organic Production Growth Production(1) MBOE/day BOE/share 11% CAGR 2011 2014 105 103 97 - 103 0.21 Growth driven by Fort Berthold and 90 the Marcellus 90 82 75 0.18 2015 production guidance…
  10. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 10
    Track Record: Sustainability Adjusted Payout Ratio(1)(2)(3)(4) Millions APO Reduction in capital spending and 1,200 200% dividend in 2015 to more appropriate 174% 180% levels 1,000 160% APO, inclusive of A&D, is projected to 800…
  11. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 11
    2015 Capital Allocation: Disciplined Spending 2015 Capital Allocation (540 million) U.S. Gas Capital spending reduced by 30% from Canadian 5% Gas 5% 2014 levels Capital allocation focused on profitability Canadian Majority of…
  12. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 12
    2015: Guidance & Performance to Date Well positioned to achieve 2015 revised guidance 2015 Guidance(1) Revised Guidance Q1 2015 Capital spending: 480MM 540MM 167MM AA production: 93 100 MBOE/day 97 103 MBOE/day 100.9 MBOE/day %…
  13. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 13
    Attractive Valuation Key Trading, Financial and Operational Information Enterprise Value(1) 3.8 billion Price / 2015E Funds Flow(1)(2) 5.0x Monthly Dividend / Dividend Yield(1)(3) 0.05 per share / 5% Dividend as % of Funds Flow(2) 28%…
  14. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 14
    Focused Portfolio with Significant Growth Potential 2015E Production: 20% of 2015E Production Long-life, low decline Liquids Natural 44% Large discovered OOIP; 150 future drilling locations and EOR potential Gas 56% Primary,…
  15. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 15
    Core Oil Assets
  16. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 16
    Operated Light Oil Assets in the Williston Basin 2015E Production: 29,000 31,000 BOE/day Sleeping Giant 20% Fort Berthold 80% 2014 2P Reserves(1): 145 MMBOE Sleeping Giant Fort Sleeping (Elm Coulee) Berthold Giant 15%…
  17. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 17
    Fort Berthold, North Dakota Key Facts Discovered OOIP (operated) 22 35 MMbbls/1280 DSU Discovered OOIP (operated) 1.4 billion bbls Net Acreage 74,000 acres 2P Reserves at Dec 31, 2014(1) 123 MMBOE Best Est. Economic Contingent 115…
  18. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 18
    Fort Berthold Delivering Growth Annual Production(1) Reserves(2) 2015 annual production expected to grow 14% YOY, Replaced over 300% of 2014 production adding with capital spending in line with 2014 levels 24 MMBOE of 2P reserves at…
  19. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 19
    Fort Berthold: Concentrated Core Position & Room to Run The Core represents ND Acreage Quality ND Drilling Density Avg Long Laterals Peak Monthly Production By Township Total Wells per Township 10% of the basin Lower well density in…
  20. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 20
    Fort Berthold: Increasing to Average 7 Well Density/DSU Enerplus Hognose Successful TF2 Entire acreage prospective for Enerplus Bakken and 1st Bench Three Forks Swallowtail TF2 270 future drilling locations 8 75% are long…
  21. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 21
    Fort Berthold: Improving Productivity through Completion Enhancements 2012 2013 2014 Completion Sliding sleeve Sliding sleeve and plug & perf Plug & perf Evolution 28-29 stages 34-42 stages 38-44 stages 270 lbs ceramic proppant per…
  22. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 22
    Fort Berthold Completion Performance Improving Economics Fort Berthold Type Curves Type Well Economics(1)(2)(3) 50 1,200 Mbbl Type Curve WTI: US60/bbl 1,200 Mbbls 900 Mbbls 600 Mbbls 900 Mbbl Type Curve NYMEX: US3.25/Mcf (1,400 MBOE)…
  23. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 23
    Fort Berthold Completion Evolution Increasing Production Rates Completion Costs/Stage 350 319 300 Despite larger fracs, the 242 250 218 223 213 switch to sand and USK 196 188 200 effective cost management 150 has helped…
  24. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 24
    Fort Berthold: Improving Capital Efficiencies (1) 25,000 Reduction in well costs and significant increase in IP rates Capital Efficiencies (US/BOE/day) 19,500 20,000 17,000 driving top quartile 15,500 capital…
  25. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 25
    Fort Berthold: Testing Density & Lower Benches Snakes Pad 8 Well Density & TF2 Butterflies/Turtles pad 8 Well Density & TF2 Fur Bearers pad 7 Well Density Bakken Enerplus down spacing test Three Forks (7 well density)…
  26. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 26
    Fort Berthold: Proven Outperformance Continuously looking to improve performance: Stages/entry points Proppant Injection rate Fluid Geology may drive variability of optimum completion style by area Economic returns key…
  27. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 27
    Fort Berthold Townships Bakken/TF Laterals (1) First 6 Months Oil Production Enerplus wells drilled without high volume completions Enerplus wells drilled with high volume completions First 6 Calendar Month Oil Production…
  28. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 28
    Fort Berthold U.S. Crude Marketing U.S. Bakken: 540,000 bbls/day of regional pipe capacity actively Currently Available Capacity(1) utilized and another 200,000 bbls/day coming into service after 2016 Rail loading capacity is plentiful…
  29. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 29
    Fort Berthold: Natural Gas and NGL Production Fort Berthold (Q1 2015 BOE/day) 6% 7% Gas and NGLs are gathered and marketed by our gatherer at market netback pricing Realized natural gas price is higher than NYMEX because of…
  30. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 30
    Low Decline Canadian Waterflood Assets Key Facts Discovered OOIP 1.1 billion bbls Recovery Factor at Dec 31, 2014(1) 22% 2P Reserves at Dec 31, 2014(2) 66 MMBOE Best Est. Economic Contingent 59 MMBOE Resources Dec 31, 2014(2) EOR &…
  31. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 31
    Waterflood - Brooks Overview Key Facts North Discovered OOIP 223 MMbbls Recovery Factor at Dec 31, 2014 28% (1) 2P Reserves at Dec 31, 2014 10.5 MMBOE Best Estimate Economic Contingent 0.8 MMBOE (1) Resources at Dec 31, 2014…
  32. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 32
    Brooks South Hz Wells and Economics Brooks South Horizontal Wells Type Well Economics Cum. Oil MBOE WTI: US60/bbl US80/bbl 30 NYMEX: US3.25/Mcf US4.00/Mcf USD/CDN: 1.25 1.15 25 Capital (MM) 2.1 2.1 IP30 (BOE/day) 147 147 20 Reserves…
  33. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 33
    Core Natural Gas Assets
  34. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 34
    Marcellus NE Pennsylvania Enerplus Land Key Facts Thickness Marcellus Well Net Acreage 52,000 acres 2P Reserves Dec 31, 2014(1) 840 Bcf Best Est. Economic Contingent 1,400 Bcf Resources Dec 31, 2014(1) Future Net Drilling…
  35. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 35
    Marcellus Delivering Growth Annual Production(1) Reserves(2) 2015 production expected to be almost flat YOY, despite 2P reserves increased 40% in 2014, replacing 450% roughly 75% capital reduction from 2014 levels of 2014 production…
  36. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 36
    Marcellus: Superior Dry Gas Performance and Competitive Economics (1)(2) Tighter stage spacing and increased proppant continues to improve performance 2013 - 2014 Gross On-Streams EUR EUR US 4.00/Mcf 10 Bcf 15 Bcf IP30, MMcf/d…
  37. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 37
    Marcellus Well Cost & Performance Evolution Total Well Cost 30 Day Capital Efficiency 12,000 10,000 10,000 8,000 8,000 US K 8,000 7,000 7,500 6,000 7,000 4,000 2,000 6,000 5,500 0 US/BOE/day 2012 2013 2014 5,000…
  38. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 38
    Marcellus Sales Price Mix Q1 2015 Regional firm, must-take contracts of 140 MMcf/day in TGP Z4 300 place through Q3 2015 Spot: 38% (includes 10 MMcf/day of pipeline capacity), declining to Transco Z6 50 MMcf/day in Q2 2016 Transco…
  39. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 39
    Northeast Pennsylvania Pipeline Projects: 8 Bcf/d of Projects Planned Incremental Takeaway Project Pipeline Owner Destination In Service (MMcf/day) Rose Lake 300 TGP KM 230 NE Flowing Transco - Northeast Connector Transco Williams…
  40. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 40
    Northeast PA Marcellus Pipeline Infrastructure Future Takeaway Capacity Annual production growth could be capped at 1.5 Bcf/day based on the pace of expected pipeline additions in the NE Pa. Marcellus Should see basis relief by…
  41. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 41
    Core Canadian Natural GasDeep Basin Core growth area in the Wilrich and Duvernay 160,000+ net acres of Duvernay high working interest 85,000 net acres of land undeveloped land, 100% WI Successful drilling results to date in…
  42. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 42
    Canadian GasDeep Basin (Wilrich) Contiguous land blocks in highly prospective regions Key Facts Key properties Edson, Ansell, North Ansell Minehead, Hanlan - 2-well pad drilled in Q4 2014 with partners. Net Acreage 60,000 acres -…
  43. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 43
    Wilrich Activity and Economics (1)(2) Operated Ansell 2-30 Wilrich pad NYMEX US4.00/Mcf Regional Sweet Spot was drilled and completed under USD/CDN 1.15 5 Bcf EUR 6 Bcf EUR budget NPV10 (MM) 3.6 5.6 IRR 29% 41% Total cost of…
  44. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 44
    Duvernay Shale - Willesden Green R12W5 R11W5 R10W5 R9W5 R8W5 R7W5 R6W5 R5W5 R4W5 R3W5 Producing Wells 85,600 net acres (100% W.I.) ENERPLUS Hz 15-8-46-9W5M On production 10/2014 Drilled Wells IP30 700 Boepd (58% liquids) Locations…
  45. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 45
    Our Competitive Advantage Focused portfolio with significant future drilling inventory Demonstrated track record of delivering profitable growth in production, reserves and funds flow Strong operational capability with disciplined…
  46. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 46
    Supplemental Information
  47. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 47
    Crude Oil Hedging Summary Q2 2015 Q3 2015 Q4 2015 FY 2016 Hedge position as % of 25% forecasted 31% 47% 44% production(1) 53% 56% hedged 69% 75% Unhedged Volume Price Volume Price Volume Price Volume Price (bbl/d) (US/bbl)…
  48. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 48
    Natural Gas Hedging Summary Q2 2015 Q3 2015 Q4 2015 Hedge position as % of forecasted 39% production(1) 44% 41% 56% 59% hedged 61% Unhedged Volume Price Volume Price Volume Price (Mcf/d) (US/Mcf) (Mcf/d) (US/Mcf) (Mcf/d)…
  49. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 49
    Debt Composition at March 31, 2015 Debt Composition Senior Notes Maturities(1) Bank Credit Facility - 1 billion Senior Unsecured Notes - CDN1,149 MM 11 banks in Enerplus bank credit facility Notes are rated NAIC 2 and rank equally…
  50. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 50
    2015 Funds Flow Sensitivities Est. effect on 9 mos. Est. effect on 9 mos. 2015 Funds Flow 2015 Funds Flow per Share 2015 Sensitivities ( Million) (/share) Change of US5.00/bbl WTI crude oil 40 0.19 Change of US0.50/Mcf NYMEX natural…
  51. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 51
    Reserves Composition Reserves Composition(1) Highlights MMBOE Continued reserves growth with solid 450 foundation of proved reserves 400 Marcellus: 33% of total 2P reserves 350 34% 35% 300 Fort Berthold: 29% of total 2P reserves…
  52. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 52
    Contingent Resources 2014 Economic Best Estimate Contingent Resources (MMBOE) Wilrich Contingent resources increased Deep Gas 40 86 MMBOE YOY in 2014 Fort Berthold 115 Large increase in Fort Berthold Canadian contingent…
  53. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 53
    Fort Berthold Well Density Schematic 6 / 7 Well Density(1) 8 Well Density(1) TF 2 & 3 Upside(2) No Lower Three Forks Lower Three Forks TF3 & Additional Stand-Alone Locations Productive TF Wells 1) Assumes 15% recovery factor 53…
  54. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 54
    ITG Research: Fort Berthold Offers Highest Bakken Recoveries Enerplus land position Source: ITG, Breaking Down the Bakken, December 2014 54
  55. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 55
    ITG Research: ... And Among the Lowest Break-Evens Enerplus land position Source: ITG, Breaking Down the Bakken, December 2014 55
  56. JUNE 2015 INVESTOR UPDATE – Enerplus Corp – slide 56
    Enerplus Share Ownership Investor Composition(1) Geographic Composition Total Retail Total Institutional 59% 41% 1% 5% 18% 23% 43% 52% 59% U.S. Institutional Retail Canada U.S. Europe & Other Canadian Institutional…

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