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Q2 2016 Investor Update – Enerplus Corp

Enerplus Corp · Aug 9, 2016 · 48 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. Q2 2016 Investor Update – Enerplus Corp – slide 1
    ERF: TSX & NYSE Investor Update August 2016
  2. Q2 2016 Investor Update – Enerplus Corp – slide 2
    Corporate Strategy FOCUS: Top tier assets; effective capital allocation strategy; profitable, responsible growth EXECUTION: DISCIPLINED, Leverage the strong operational & technical knowledge of our staff to achieve leading…
  3. Q2 2016 Investor Update – Enerplus Corp – slide 3
    Investment Highlights Well positioned to re-establish growth Industry leading capital efficiencies Strong financial position Improving netbacks through cost reductions, narrowing differentials and commodity price improvement Strong &…
  4. Q2 2016 Investor Update – Enerplus Corp – slide 4
    2016 Second Quarter Highlights Continued strong operational performance Increasing production guidance to 92 94 MBOE/day from 90 94 MBOE/day despite divestments of 2,300 BOE/day at the end of Q2; primarily due to strong Marcellus…
  5. Q2 2016 Investor Update – Enerplus Corp – slide 5
    Top Tier Asset Portfolio Core growth positions supported by free cash flow generating assets 2016E Capital Allocation 2016E Production (MM) Canadian Oil Waterfloods 20 Base Assets 15,000 16,000 BOE/d 50 53% 47% Long-life, low…
  6. Q2 2016 Investor Update – Enerplus Corp – slide 6
    Portfolio Evolution Improved Concentration Portfolio increasingly focused on three areas that now represent 90% of company production and 95% of 2P reserves Over 60% of capital over the last five years directed to North Dakota and the…
  7. Q2 2016 Investor Update – Enerplus Corp – slide 7
    High Quality, Efficient Assets 2015 3-Year Avg F&D, including FDC(1) 2015 Capital Efficiencies(2) Strong capital efficiencies, particularly given 90% Consistently delivering competitive F&D costs of capital focused on crude oil…
  8. Q2 2016 Investor Update – Enerplus Corp – slide 8
    Driving Costs Down Cost Reductions Driving Margin Improvement Strong operational execution and cost focus are driving operating costs lower even as proportion of company liquids production increases Divested of properties with higher…
  9. Q2 2016 Investor Update – Enerplus Corp – slide 9
    Balance Sheet Overview Significant Liquidity Available: Credit Facility Undrawn & Cash in the Bank(3) Debt Composition CDN49 MM cash balance and CDN800 million unsecured bank credit facility undrawn at June Senior Undrawn Notes 30,…
  10. Q2 2016 Investor Update – Enerplus Corp – slide 10
    2016 Guidance Declining through year, largely due to 11,000 BOE/d of non-core production Annual Avg. Production divested Q4 2015 Q2 2016 92,000 94,000 BOE/d Q4 2016E production of 89,000 BOE/d Liquids Production U.S. liquids…
  11. Q2 2016 Investor Update – Enerplus Corp – slide 11
    Hedging Summary WTI & NYMEX Crude Oil Hedging Summary(1) Natural Gas Hedging Summary(1) 100% 70 100% 3.00 % Production Hedged, net of royalties(2) 90% 90% % Production Hedged, net of royalties(2) 60 NYMEX Price Hedged…
  12. Q2 2016 Investor Update – Enerplus Corp – slide 12
    Williston Basin
  13. Q2 2016 Investor Update – Enerplus Corp – slide 13
    Williston Basin Light Oil Assets Williston Basin (North Dakota & Montana) Production (BOE/d) (1) 35,000 Fort Berthold 30,000 Sleeping Giant 25,000 20,000 15,000 10,000 5,000 - 2010 2011 2012 2013 2014 2015 2016E 2P Reserves…
  14. Q2 2016 Investor Update – Enerplus Corp – slide 14
    Fort Berthold Overview Fort Berthold, North Dakota Key Facts Discovered OOIP(1) 22 35 MMbbls/1280 DSU Discovered OOIP(1) 1.4 billion bbls Recovery Factor 15% Net Acreage 72,500 acres 2P Reserves(2) 144 MMBOE Contingent Resources(2)…
  15. Q2 2016 Investor Update – Enerplus Corp – slide 15
    Fort Berthold Position Core Acreage, Strong Well Performance 100% of Enerplus Acreage is in the Core Fort Berthold Well Results 350,000 1,200 Mbbl Type Curve Acreage Quality 2014-2016 wells Avg Long Laterals Peak Monthly Production By…
  16. Q2 2016 Investor Update – Enerplus Corp – slide 16
    North Dakota Well Performance vs Peers Acreage Position and Completion Design Driving Best in Basin Well Performance Average First 6 Months Cumulative Oil Production Per Well NDIC Data All long lateral wells in North Dakota brought…
  17. Q2 2016 Investor Update – Enerplus Corp – slide 17
    Enerplus Fort Berthold Among the Lowest Breakeven Costs in Lower 48(1) Enerplus 2014 2015 North Dakota wells in Fort Berthold had, on average, among the lowest breakeven costs in the lower 48 and the lowest among all Bakken…
  18. Q2 2016 Investor Update – Enerplus Corp – slide 18
    Density Overview Acreage where Lower Three Forks is not targeted Previous Density Plan Full Development Planning 6 / 7 Well Density 8 Well Density No Lower Three Forks No Lower Three Forks Stand-Alone Locations Stand-Alone…
  19. Q2 2016 Investor Update – Enerplus Corp – slide 19
    Density Overview Acreage with Potential for Lower Three Forks wells Previous Density Plan Full Development Planning 8 Well Density 8 - 11 Well Density Lower Three Forks Lower Three Forks Productive Productive P+DP/P+PUDbooked…
  20. Q2 2016 Investor Update – Enerplus Corp – slide 20
    Fort Berthold Inventory Significant Running Room Op + Operated NonOp Only Operated Operated Operated Well Well Years Years Years Count Count Inventory Inventory Inventory Well Status Location Category Net Gross 1 Rig 2 Rigs 3…
  21. Q2 2016 Investor Update – Enerplus Corp – slide 21
    Well Density and Lower Three Forks Further Upside Potential High Density Units Current well counts Enerplus current density plans: In offsetting DSUs 4 Bakken wells, 4 Three Forks wells Enerplus very early in development Current…
  22. Q2 2016 Investor Update – Enerplus Corp – slide 22
    Bakken Differential Differentials continue to improve as North Dakota production falls and rail competes against pipe for barrels We expect the differentials to remain around the US(7.00)/bbl level even as WTI prices increase…
  23. Q2 2016 Investor Update – Enerplus Corp – slide 23
    Industry Bakken Oil Production & Takeaway Capacity Williston Basin pipeline egress capacity will exceed forecast production with completion of Dakota Access The Sandpiper capacity would increase competition for barrels, however, the…
  24. Q2 2016 Investor Update – Enerplus Corp – slide 24
    Enerplus Bakken Marketing Portfolio Enerplus is well positioned to take advantage of the tightening basin differentials We plan to layer in additional term sales over time Enerplus Bakken Crude Oil Marketing Commitments 20,000…
  25. Q2 2016 Investor Update – Enerplus Corp – slide 25
    Marcellus
  26. Q2 2016 Investor Update – Enerplus Corp – slide 26
    Marcellus NE Pennsylvania Marcellus Acreage, Pennsylvania Key Facts Enerplus Land Net Acreage 47,000 acres Thickness Marcellus Well 2P Reserves(1) 841 Bcf Contingent Resources(2) 803 Bcf Future Net Drilling Locations 128 wells…
  27. Q2 2016 Investor Update – Enerplus Corp – slide 27
    Marcellus Well Performance and Economics Marcellus Type Curves Type Curve Economics(1)(2)(3) Gas (Bcf) 10 15 5.0 15 Bcf Type Curve 10 Bcf Type Curve 11 IP30 (MMcf/d) 8.3 11.0 4.5 2014 Onstream Actuals 95 IRR Pretax (%) 12% 26% 57 15…
  28. Q2 2016 Investor Update – Enerplus Corp – slide 28
    Marcellus Original Gas In Place and Well Density 128 Net undrilled locations on 1000 spacing 33 P+PUD(1) 100 Bcf/sq. mi. 95 CR(2) 500 spacing has 150 Bcf/sq. mi. potential for 140 additional net 50 Bcf/sq. mi. locations(3)…
  29. Q2 2016 Investor Update – Enerplus Corp – slide 29
    Marcellus Differential Lower NE PA production combined with weaker NYMEX prices and additional egress has resulted in a tightening of Marcellus basis since mid-2015 As NYMEX strengthens through the balance of 2016, we expect realized…
  30. Q2 2016 Investor Update – Enerplus Corp – slide 30
    NE Pennsylvania Market Fundamentals BCF/day The white space below Actual production exceeds production US/MMBtu the green line reflects implied by rig counts and rig efficiency 12 5.00 curtailed volume industry is beginning to work…
  31. Q2 2016 Investor Update – Enerplus Corp – slide 31
    Marcellus NE Pennsylvania Pipeline Infrastructure Future Takeaway Capacity In the near-term, production capacity is limited by the amount of available pipeline egress in the region At current rig count, constrained or curtailed…
  32. Q2 2016 Investor Update – Enerplus Corp – slide 32
    Enerplus Marcellus Marketing Portfolio 200 Enerplus Committed Sales and Transport 180 160 140 '000 Dth/day 120 100 80 60 40 20 0 TETCO M3 Leidy/TGP NYMEX Equiv. Transco Zone 6 NNY Term Sales & Transport - 2017 Term…
  33. Q2 2016 Investor Update – Enerplus Corp – slide 33
    Marcellus Cash Margin Improvement Potential for significant cash flow generation as basis tightens Cash Margins Before Hedging (US/Mcf) 2015 Actuals 2016E 2017E 2018E NYMEX forward strip(1) 2.66 2.46 3.12 3.01 Basis…
  34. Q2 2016 Investor Update – Enerplus Corp – slide 34
    Canadian Waterfloods
  35. Q2 2016 Investor Update – Enerplus Corp – slide 35
    Canadian Waterflood Portfolio Large oil in place, low decline, stable production High netback assets have delivered over 750MM in free cash flow since 2010 Advancing technologies for waterflood, polymer flood, gel treatments; possible…
  36. Q2 2016 Investor Update – Enerplus Corp – slide 36
    Canadian Waterfloods Predictable, Low Risk Production Stable production, low decline 25,000 20,000 Other Brooks BOE/day 15,000 Waterflood portfolio high-graded with over 7,000+ BOE/d divested since 2010…
  37. Q2 2016 Investor Update – Enerplus Corp – slide 37
    Canadian Waterfloods Delivering Free Cash Flow Strong free cash flow generating assets, supporting growth opportunities Generated over 760 million in free cash flow from 2010 - 2015 WTI (US/bbl): 80 95 94 98 93 49 400 900 350…
  38. Q2 2016 Investor Update – Enerplus Corp – slide 38
    Medicine Hat Glauc C Unit Asset Overview Strong Production from Waterflood and Polymer with Significant Future Potential Medicine Hat Unit Key Facts Q1 2016 Production (BOE/d) 3,458 Oil (bbl/d) 3,408 Gas (Mcf/d) 295 Avg Working…
  39. Q2 2016 Investor Update – Enerplus Corp – slide 39
    Medicine Hat Glauc C Unit Polymer Flooding Polymer flooding delivering strong production performance in initial two projects Potential for two additional polymer projects in the future with multiple backfill phases in each project…
  40. Q2 2016 Investor Update – Enerplus Corp – slide 40
    Why Invest in Enerplus Core positions in top resource plays (Bakken/Three Forks and Marcellus) High Quality Significant organic growth potential Assets Supported by low decline, high margin waterflood assets Track record of…
  41. Q2 2016 Investor Update – Enerplus Corp – slide 41
    Supplemental Information
  42. Q2 2016 Investor Update – Enerplus Corp – slide 42
    2016 Guidance Update August 2016 Guidance May 2016 Guidance February 2016 Update(1) Update Guidance Capital Spending 215MM 200MM 200MM Average Production (BOE/d) 92,000 94,000 90,000 94,000 90,000 94,000 Average Liquids (bbls/d)…
  43. Q2 2016 Investor Update – Enerplus Corp – slide 43
    2016 Funds Flow Sensitivities Est. effect on 6 Months Est. effect on 6 Months 2016 Funds Flow 2016 Funds Flow per Share 2016 Six Month Sensitivities ( Million) (/share) Change of 5.00/bbl WTI crude oil 28 0.12 Change of 0.50/Mcf NYMEX…
  44. Q2 2016 Investor Update – Enerplus Corp – slide 44
    Crude Oil Hedging Summary 2H 2016 2017 Hedge position as % of forecasted 39% 39% production(1) Hedged 61% 61% Unhedged Volume Price Volume Price (bbl/d) (US/bbl) (bbl/d) (US/bbl) 3 Way Collars Sold Puts 12,000 45.09 12,000…
  45. Q2 2016 Investor Update – Enerplus Corp – slide 45
    Natural Gas Hedging Summary Jul - Oct 2016 Nov - Dec 2016 2017 Hedge position as % of 22% 20% forecasted 33% production(1) Hedged 67% Unhedged 78% 80% Volume Price Volume Price Volume Price (Mcf/d) (US/Mcf) (Mcf/d) (US/Mcf)…
  46. Q2 2016 Investor Update – Enerplus Corp – slide 46
    Northeast Pennsylvania Pipeline Projects 6.5 Bcf/day of Projects Planned Incremental Takeaway Project Pipeline Owner Destination In Service (MMcf/day) Transco - Leidy Southeast Transco Williams In Service Southeast In Service…
  47. Q2 2016 Investor Update – Enerplus Corp – slide 47
    Enerplus Board of Directors Biographies Elliott Pew, Chairman of the Board Mr. Pew has over thirty five years of diverse experience in the oil and gas industry, most recently as Co-Founder and Chief Operating Officer for Common…
  48. Q2 2016 Investor Update – Enerplus Corp – slide 48
    Enerplus Board of Directors Biographies continued Robert B. Hodgins, Director Mr. Hodgins has been an independent businessman since November 2004. Prior to that, Mr. Hodgins served as the Chief Financial Officer of Pengrowth Energy Trust…

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