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Investor Update – Enerplus Corp

Enerplus Corp · Jul 3, 2014 · 52 slides

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Slides

  1. Investor Update – Enerplus Corp – slide 1
    Investor Update July 3, 2014 ERF TSX & NYSE
  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 return-based capital Competitive…
  3. Investor Update – Enerplus Corp – slide 3
    2014 Focus Operational execution Production growth of approximately 10% Target capital efficiencies…
  4. Investor Update – Enerplus Corp – slide 4
    Q1 2014 Results on Track ERF TSX & NYSE Q4 2013 Q1 2014 2014 Guidance Average Production (BOE/day) 94,167 98,821 96,000-100,000 Capital Expenditures (MM) 223 218 800 Funds Flow (MM) 181 221 - Debt-to-Funds Flow Ratio* 1.4x 1.3x -…
  5. Investor Update – Enerplus Corp – slide 5
    Core Areas 2014E Production by Core Area U.S. OilWilliston Basin U.S. Oil Operated Bakken/Three Forks position with 330 net future 25% 2014 Capital drilling locations U.S. 40% Upside potential via downspacing, additional Three Forks…
  6. Investor Update – Enerplus Corp – slide 6
    Significant Future Drilling Inventory to Support Growth 830 Future Drilling Locations Core Waterfloods Marcellus 160 240 Deep Basin Fort Berthold 100 330 * Based on 2P reserves and contingent resource locations at…
  7. Investor Update – Enerplus Corp – slide 7
    Demonstrated Growth Annual Production Reserves** 100 450 100 90 406 90 400 82 80 346 75 350 322 306 MBOE/day 70 56 300 43% MMBOE 48 49% 60 42 250 40% 42 43% 50 47% 200 40 150 30 100 49% 53% 55% 47% 20 33…
  8. Investor Update – Enerplus Corp – slide 8
    Demonstrated Per Share Growth Production/share Funds Flow/share 0.20 4.45 4.50 0.18* 0.18 0.16 4.00 3.76 BOE Per Thousand Shares 0.16 0.15 3.50 3.29 0.14 Per Share 3.00 0.12 2.50 0.10 2.00 0.08 0.06 1.50…
  9. Investor Update – Enerplus Corp – slide 9
    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 *…
  10. Investor Update – Enerplus Corp – slide 10
    Delivering Funds Flow Growth per Share 5.00 4.45 4.00 3.76 Higher production volumes Funs Flow per Share 3.29 and oil weighting has helped 3.19 3.00 drive funds flow growth over past three years 2.00 Q1 funds flow of 221…
  11. Investor Update – Enerplus Corp – slide 11
    Improved Sustainability 2.0 2.0 D/FF 1.8 D/FF 1.7x 1.8 1.6x D/FF 1.6 1.6 1.4x Debt to Funds Flow Ratio 1.4 1.4 D/FF* 1.3x Payout % 1.2 1.2 APO 1.0 1.0 212% APO 174% 0.8 0.8 0.6 APO APO* 0.6 114% 113% 0.4…
  12. Investor Update – Enerplus Corp – slide 12
    Funds Flow Protection WTI Crude Oil Hedges* Natural Gas Hedge Positions* Rest of 2014 Rest of 2014 9% AECO Swaps 4.23/Mcf 36% 53% 8% NYMEX Collars US94.24/bbl US4.30 - 5.08/Mcf 64% 30% NYMEX Swaps US4.14/Mcf ** 12% C4.125…
  13. Investor Update – Enerplus Corp – slide 13
    Core Oil Assets
  14. Investor Update – Enerplus Corp – slide 14
    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 Fort Sleeping (Elm Coulee) Berthold Giant 20% Dunn…
  15. Investor Update – Enerplus Corp – slide 15
    US Core Oil: Fort Berthold, North Dakota Key Facts OOIP 20 42 MMbbls/1280 DSU OOIP (W.I.) 1.5 billion bbls Net Acreage 73,000 (114 sections) 2P Reserves at Dec 31, 2013 105 MMBOE Best Estimate Contingent 136 MMBOE Resource Jun…
  16. Investor Update – Enerplus Corp – slide 16
    Fort Berthold Delivering Growth Annual Production Reserves 25 22 2P: 105.4 100 2P: 20 86.1 17 80 MBOE/day 15 2P: MMBOE 12 56.2 60 10 40 2P: 5 22.5 1P: 1P: 5 20 1P: 43.7 49.6 1P: 28.0 11.7 0 0 2011 2012 2013…
  17. Investor Update – Enerplus Corp – slide 17
    Fort Berthold: 250% Increase in Contingent Resource Original 2014 Assumption Evaluation Increase OOIP per DSU* Bakken 8 12 MMbbls 8 16 MMbbls TF1 8 10 MMbbls 10 16 MMbbls TF2 n/a 2 20 MMbbls Total 16 22 million bbls 20 42 million…
  18. Investor Update – Enerplus Corp – slide 18
    Fort Berthold Well Density Schematic 6 / 7 Well Density* 8 Well Density* TF 2 &3 Upside** No Lower Three Forks Lower Three Forks TF3 & Additional Stand-Alone Locations Productive TF Wells * Assumes 15% recovery factor. 17 ** Super…
  19. Investor Update – Enerplus Corp – slide 19
    Fort Berthold: Increasing to Average 7 Wells/DSU Enerplus Hognose Successful TF2 Northwest Enerplus Highest estimate of OOIP Butterflies TF2 Drilling Includes TF2 8 8 well density Central/West Well density ranging from 6 8…
  20. Investor Update – Enerplus Corp – slide 20
    Fort Berthold: Encouraging Enerplus High Density Tests Snakes Pad High Density Well Performance 8 Well Density & TF2 150 Prairie Dog 150-94-04A-09H Fox 150-94-04A-09H 140 Bobcat 150-94-04A-09H 130 Hognose 152-94-18B-19H TF2…
  21. Investor Update – Enerplus Corp – slide 21
    Fort Berthold: 127% Increase in Drilling Inventory Original View New View 184 new locations added 4 wells/ Avg. 7 wells/ Two thirds of locations are Locations DSU DSU long laterals BakkenLong 53 124 Three ForksLong 66 89 Average 7…
  22. Investor Update – Enerplus Corp – slide 22
    Improving Productivity through Completion Enhancements Bakken Wells , 25 Cumulative Oil (Mbbls) per 1000 Lateral Feet 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Months 21
  23. Investor Update – Enerplus Corp – slide 23
    Fort Berthold Completion Performance Improving Economics* Old Type Curve New Type Curve High EUR Low EUR High EUR Low EUR 800 Mbbls 500 Mbbls 800 Mbbls 530 Mbbls (950 MBOE) (600 MBOE) (950 MBOE) (635 MBOE) 30 Day Cum. Prod (bbls)…
  24. Investor Update – Enerplus Corp – slide 24
    Fort Berthold: Improving Capital Efficiencies* Reduction in well 15,000 costs and significant 12,000 increase in IP rates 10,000 driving top quartile capital efficiencies Capital Efficiency* 10,000 (US/BOE/day) 8,500…
  25. Investor Update – Enerplus Corp – slide 25
    Fort Berthold Completions Enhancements Leading to Best in Basin Well Results E+ Best Bakken E+ Best Peak Calendar Month Cumulative Production* (bbls) Three Forks Enerplus wells drilled without high volume completions…
  26. Investor Update – Enerplus Corp – slide 26
    Fort Berthold U.S. Crude Marketing Total Industry Bakken Production Take-Away Capacity: 550,000 bbls/day of regional pipe capacity currently Available Capacity available and another 400,000-450,000 bbls/day coming into service after…
  27. Investor Update – Enerplus Corp – slide 27
    Fort Berthold: Natural Gas and NGL Production Fort Berthold (2013 BOE/day) 643 816 Gas and NGLs are gathered and marketed by our gatherer at market netback pricing Realized natural gas price is higher than NYMEX because of…
  28. Investor Update – Enerplus Corp – slide 28
    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 Estimate Contingent 59 MMbbls 28% Resource Dec…
  29. Investor Update – Enerplus Corp – slide 29
    Free Cash Flow from Waterflood Assets 350 NOI: 326 NOI: NOI: 306 312 NOI: 138 NOI: 300 272 172 273 120 116 152 Average 50% 250 reinvestment Million 200 delivering 5% 150 58% CAGR in 56% 58% 51% production 44%…
  30. Investor Update – Enerplus Corp – slide 30
    Core Natural Gas Assets
  31. Investor Update – Enerplus Corp – slide 31
    U.S. Core Gas: Marcellus Enerplus Land Key Facts Thickness Marcellus Well Net Acreage 57,500 acres 2P Reserves Dec 31, 601 Bcf 2013 Best Estimate Contingent 1,340 Bcf Resource Dec 31, 2013 Future Net Drilling 240 wells…
  32. Investor Update – Enerplus Corp – slide 32
    Marcellus Delivering Growth Reserves 2P: Annual Production 601 180 600 180 160 500 140 Bcf of Natural Gas 120 400 MMcf/day 95 100 300 2P: 80 225 2P: 60 200 154 2P: 41 117 40 21 100 1P: 20 1P: 1P: 1P: 411 52…
  33. Investor Update – Enerplus Corp – slide 33
    Marcellus: Superior Dry Gas Performance and Competitive Economics Tighter stage spacing and increased proppant continues to improve performance 2013 - 2014 Gross On-Streams EUR EUR EUR US4.50/Mcf 13 Bcf 12 Bcf 10 Bcf NPV10 (MM) 10.5…
  34. Investor Update – Enerplus Corp – slide 34
    Marcellus Sales Price Mix Q1 2014 55% of Q1 production delivered on TGP Z4 300 Transco, 45% on TGP however Spot: 39% sales mix paints a different picture Regional firm, must-take contracts Transco Z6 Transco Leidy NNY: of 70…
  35. Investor Update – Enerplus Corp – slide 35
    Building the Near-Term Marcellus Basis View 14 Incremental Takeaway Capacity 12 Incremental NE Demand 10 Incremental Export out of region Midpoint - Cum. Estimated Production Growth 8 Bcf/day 6 4 2 0 Q1…
  36. Investor Update – Enerplus Corp – slide 36
    Northeast US Pipeline Projects 12 Bcf of Projects Planned Project Owner Incremental Takeaway (Bcf/day) In Service REX Seneca Lateral KM 0.2 Q1 2014 ANR Lebanon Reversal TCPL 0.4 Q1 2014 Tenessee Rose Lake 300 Line KM 0.2 Q4 2014 1.9…
  37. Investor Update – Enerplus Corp – slide 37
    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…
  38. Investor Update – Enerplus Corp – slide 38
    Canadian GasDeep Basin (Wilrich) Contiguous land blocks in highly prospective regions Key Facts Edson smaller acreage position Key properties Edson, Ansell, Minehead, - Infrastructure available - Significant competitor activity…
  39. Investor Update – Enerplus Corp – slide 39
    WilrichWell Performance 4.0 16-15-049-19W5 13-17-050-19W5 EUR EUR EUR 3.5 15-18-050-19W5 AECO 4.00/Mcf 7 Bcf 6 Bcf 5 Bcf 13-29-050-19W5 NPV10 (MM) 6.7 5.3 3.9 3.0 14-30-050-19W5 Cumulative Production (Bcf) IRR (%) 46 38 30…
  40. Investor Update – Enerplus Corp – slide 40
    Duvernay ShaleWillesden Green R12W5 R11W5 R10W5 R9W5 R8W5 R7W5 R6W5 R5W5 R4W5 R3W5 Producing Wells 85,000 net acres (100% W.I.) land Drilled Wells position built over past 3 years at Licensed…
  41. Investor Update – Enerplus Corp – slide 41
    Our Competitive Advantage Focused portfolio in top tier resource plays: Bakken/Three Forks, Marcellus, Deep Basin & Waterfloods Continued focus on capital disciplinedelivering approximately 10% production growth in 2014 with a target…
  42. Investor Update – Enerplus Corp – slide 42
    Supplemental Information
  43. Investor Update – Enerplus Corp – slide 43
    Fort Berthold Completion Evolution Increasing Production Rates Completion Costs/Stage Despite larger fracs, the switch to sand and effective USK cost management has helped reduce completion costs 30 Day Cum. Oil BKN TF…
  44. Investor Update – Enerplus Corp – slide 44
    Production Composition 2014E Production 2014E Crude Oil Composition U.S. Liquids U.S. Gas 24% Canada Heavy 31% 22% Canada Medium 11% U.S. Light Canada 58% Canada Gas Liquids 25% 20% Canada Light 9% 2014…
  45. Investor Update – Enerplus Corp – slide 45
    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 20.6 0.10 Change of 0.50/Mcf NYMEX natural gas 26.2 0.13…
  46. Investor Update – Enerplus Corp – slide 46
    Debt Composition as at March 31, 2014 Senior Bank Credit Facility - 1 billion Unused Notes 11 banks in Enerplus bank credit facility Capacity US770MM* 813MM CDN70MM Unsecured, covenant-based with current borrowing rate of less…
  47. Investor Update – Enerplus Corp – slide 47
    Senior Notes Maturities* Average interest rate of 5.5%** 700 643 600 500 Millions 400 300 200 96 100 51 50 0 2014 2015 2016 2017 2018 and beyond * As at March 31, 2014. US amounts converted at US/CDN 1.1053.…
  48. Investor Update – Enerplus Corp – slide 48
    Enerplus Share Ownership Investor Composition Geographic Composition Total Retail Total Institutional 60% 40% 17% 35% 42% 23% 58% 25% US & Other Retail Canadian Retail US & Other Institutional Canadian Institutional…
  49. Investor Update – Enerplus Corp – slide 49
    Enerplus Board of Directors Elliott Pew, Chairman of the Board(1)(2) Mr. Pew, Chairman of Enerplus, is a co-founder of Common Resources and served as its Chief Operating Officer until the company was sold in May, 2010. He is currently a…
  50. Investor Update – Enerplus Corp – slide 50
    Enerplus Board of Directors continued Hilary Foulkes, Director (5)(11) Ms. Foulkes has more than 30 years of experience within the Canadian oil and gas industry focused in the areas of exploration, development and investment banking. She…
  51. Investor Update – Enerplus Corp – slide 51
    Enerplus Board of Directors continued Donald J. Nelson, Director (3)(9) Mr. Nelson has over 40 years of experience in the oil and gas industry, and is the president of Fairway Resources Inc., a private consulting services firm. Prior to…
  52. Investor Update – Enerplus Corp – slide 52
    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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