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Investor Update – Enerplus Corp

Enerplus Corp · Feb 25, 2015 · 57 slides

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Slides

  1. Investor Update – Enerplus Corp – slide 1
    ERF: TSX & NYSE Investor Update February 25, 2015
  2. 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. Investor Update – Enerplus Corp – slide 3
    2015 Strategy In light of current market conditions, we believe it is prudent to defer activity, selectively restrict production and reduce our dividend to a more appropriate level until we gain more visibility to an improvement in…
  4. Investor Update – Enerplus Corp – slide 4
    2015: Disciplined Spending and Balance Sheet Preservation Affordable capital program 2015 Targets(1) 40% reduction Capital spending: 480MM Restricting production and AA production: 93 100 MBOE/day deferring activity Production mix: 42…
  5. Investor Update – Enerplus Corp – slide 5
    Track Record: Significant Delivery of Organic Production Growth Production(1) Highlights MBOE/day BOE/share Production growth of 15% YOY in 2014 105 103 0.21 (13% per share), driven by Fort Berthold 97 90 and the Marcellus 90 82…
  6. Investor Update – Enerplus Corp – slide 6
    Track Record: Funds Flow Growth Supported by Growing Production Funds Flow(1) Highlights Millions /share Funds flow growth of 14% YOY in 2014 900 859 4.50 (12% per share) 800 754 4.00 2015E funds flow impacted by low 4.20 700 645…
  7. Investor Update – Enerplus Corp – slide 7
    Track Record: Enhanced Sustainability Adjusted Payout Ratio(1)(2)(3)(4) Highlights Millions APO Positioned to weather downturn in 1,200 200% commodity prices and re-establish 174% 180% growth when market conditions improve 1,000…
  8. Investor Update – Enerplus Corp – slide 8
    Track Record: Maintaining Balance Sheet Strength Debt to Funds Flow(1) Highlights Net Debt Debt/ Millions Funds Flow Maintaining conservative financial strategy 1,400 3.5 1,209 Debt levels not expected to increase 1,200 1,135 3.0…
  9. Investor Update – Enerplus Corp – slide 9
    2015 Capital Allocation: Preserving Opportunities 2015 Capital Allocation (480 million) Highlights U.S. Gas Canadian Capital spending across all four core 5% Gas 5% areas has been deferred to preserve opportunities in the portfolio…
  10. Investor Update – Enerplus Corp – slide 10
    Track Record: Continuous Improvement in Capital Efficiencies Q4 Capital Efficiencies(1) Highlights /BOE/day Strong operational focus driving 70,000 improvement in capital efficiencies 60,000 60,000 Significant efficiencies realized in…
  11. Investor Update – Enerplus Corp – slide 11
    Focused Portfolio with Significant Growth Potential 2015E Production: 22% of 2015E Production Long-life, low decline Liquids 43% Large discovered OOIP; 150 future drilling Natural locations and EOR potential Gas Primary, secondary…
  12. Investor Update – Enerplus Corp – slide 12
    Track Record: Consistent Reserves Growth 2P Reserves(1) Highlights MMBOE BOE/share 2P reserves growth of 7% YOY in 2014 450 2.20 429 (6% per share) replacing 175% of 401 50% 400 production 48% 341 2.09 2.00 350 75 MMBOE of 2P…
  13. Investor Update – Enerplus Corp – slide 13
    Track Record: Continuous Improvement in F&D Costs 2P F&D and FD&A Costs(1)(2) Highlights /BOE Corporately, 2014 2P F&D cost split was: 25 24.21 Oil: 20/BOE 22.92 Gas: 0.60/Mcf 20 (3) 2014 recycle ratio of 2.7x 15 F&D 3 year: 14.26…
  14. Investor Update – Enerplus Corp – slide 14
    Track Record: Contingent Resources Economic Best Estimate Contingent Resources(1) Highlights MMBOE Contingent resources increased 900 86 MMBOE YOY in 2014 800 771 Large increase in Fort Berthold 700 contingent resources following…
  15. Investor Update – Enerplus Corp – slide 15
    Attractive Valuation Key Trading Multiples and Financial & Operational Information Price / Funds Flow(1) 4.9x Monthly Dividend / Dividend Yield(2) 0.05 per share / 5% Dividend as % of Funds Flow(1) 28% 2015E Adjusted Payout Ratio / APO…
  16. Investor Update – Enerplus Corp – slide 16
    Core Oil Assets
  17. Investor Update – Enerplus Corp – slide 17
    Operated Light Oil Assets in the Williston Basin 2015E Production: 26,000 28,000 BOE/day Sleeping Giant 20% Fort Berthold 80% 2014 2P Reserves(1): 145 MMBOE Sleeping Giant Fort Sleeping (Elm Coulee) Berthold Giant 15%…
  18. Investor Update – Enerplus Corp – slide 18
    Fort Berthold, North Dakota Key Facts Discovered OOIP 22 35 MMbbls/1280 DSU Discovered OOIP (W.I.) 1.4 billion bbls Net Acreage 74,000 acres 2P Reserves at Dec 31, 2014(1) 123 MMBOE Best Est. Economic Contingent 115 MMBOE…
  19. Investor Update – Enerplus Corp – slide 19
    Fort Berthold Delivering Growth Annual Production(1) Reserves(2) 2015 annual production expected to be flat YOY, with Replaced over 300% of 2014 production adding approximately 25% capital reduction from 2014 levels 24 MMBOE of 2P…
  20. Investor Update – Enerplus Corp – slide 20
    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 20…
  21. Investor Update – Enerplus Corp – slide 21
    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…
  22. Investor Update – Enerplus Corp – slide 22
    Fort Berthold: Encouraging High Density Tests 350 Snakes Pad 8 Well Density & TF2 300 Butterflies/Turtles pad 8 Well Density & TF2 250 Fur Bearers pad 200 7 Well Density Cum. Oil (Mbbls) 100 50 Bakken…
  23. Investor Update – Enerplus Corp – slide 23
    Improving Productivity through Completion Enhancements 23
  24. Investor Update – Enerplus Corp – slide 24
    Fort Berthold Completion Performance Improving Economics (1) US60.00/bbl 800 Mbbls 530 Mbbls US3.25/Mcf (950 MBOE) (635 MBOE) 30 Day Cum Prod (bbls) 43,000 31,000 1st Year Cum Prod (bbls) 243,000 165,000 NPV 10% (USMM) 3.4 (2.1)…
  25. Investor Update – Enerplus Corp – slide 25
    Fort Berthold Completion Evolution Increasing Production Rates Completion Costs/Stage 350 319 Despite larger fracs, the 300 241 switch to sand and 250 USK 215 195 220 209 effective cost 200 management has helped 150…
  26. Investor Update – Enerplus Corp – slide 26
    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…
  27. Investor Update – Enerplus Corp – slide 27
    ITG Research: Fort Berthold Offers Highest Bakken Recoveries Enerplus land position Source: ITG, Breaking Down the Bakken, December 2014 27
  28. Investor Update – Enerplus Corp – slide 28
    ITG Research: ... And Among the Lowest Break-Evens Enerplus land position Source: ITG, Breaking Down the Bakken, December 2014 28
  29. Investor Update – Enerplus Corp – slide 29
    Fort Berthold Townships Peak Calendar Month Oil FBIR Townships Peak Calendar Month Oil Peak Calendar Month Cumulative Production(1) (bbls) Enerplus wells drilled without high volume completions Enerplus wells drilled with high…
  30. Investor Update – Enerplus Corp – slide 30
    Fort Berthold Townships First 6 Months Oil Production FBIR Townships - First Six Months Oil First 6 Calendar Month Oil Production(1) (bbls) Enerplus wells drilled without high volume completions Enerplus wells drilled with high…
  31. Investor Update – Enerplus Corp – slide 31
    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…
  32. Investor Update – Enerplus Corp – slide 32
    Fort Berthold: Natural Gas and NGL Production Fort Berthold (Q4 2014 BOE/day) 5% 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…
  33. Investor Update – Enerplus Corp – slide 33
    Low Decline Canadian Waterflood Assets Key Facts Discovered OOIP (W.I.) 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,…
  34. Investor Update – Enerplus Corp – slide 34
    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 Dec 31, 2014 (2) Cumulative Oil…
  35. Investor Update – Enerplus Corp – slide 35
    Brooks South 2014 Wells and Economics Brooks South 2014 Horizontal Wells(1) US60/bbl US80/bbl Cum Oil Mbbl US3.25/Mcf US4.00/Mcf 20 Capital (MM) 2.1 2.1 18 IP30 (MMcf/d) 150 150 16 Reserves (MBOE) 125 125 % Oil 75% 75% 14 IRR 22.3%…
  36. Investor Update – Enerplus Corp – slide 36
    Core Natural Gas Assets
  37. Investor Update – Enerplus Corp – slide 37
    Marcellus NE Pennsylvania Enerplus Land Key Facts Thickness Marcellus Well Net Acreage 55,000 acres 2P Reserves Dec 31, 2014(1) 840 Bcf Best Est. Economic Contingent 1,400 Bcf Resources Dec 31, 2014(1) Future Net Drilling…
  38. Investor Update – Enerplus Corp – slide 38
    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…
  39. Investor Update – Enerplus Corp – slide 39
    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 EUR US 4.00/Mcf 8 Bcf 12 Bcf 13 Bcf 16 Bcf IP30,…
  40. Investor Update – Enerplus Corp – slide 40
    Marcellus Well Cost & Performance Evolution Total Well Cost 12,000 10,000 10,000 8,000 30 Day Capital Efficiency US Thousands 8,000 7,000 6,000 4,000 7,500 8,000 2,000 7,000 0 5,500 US/BOE/day 2012 2013 2014 6,000…
  41. Investor Update – Enerplus Corp – slide 41
    Marcellus Sales Price Mix Q4 2014 Regional firm, must-take TGP Z4 300 contracts of 80 MMcf/day Spot: 34% plus 10 MMcf/day of pipeline capacity out of the Transco Z6 region held through 2015, Transco Leidy NNY: Spot: 3% with…
  42. Investor Update – Enerplus Corp – slide 42
    Northeast Pennsylvania Pipeline Projects: 8 Bcf 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 100…
  43. Investor Update – Enerplus Corp – slide 43
    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…
  44. Investor Update – Enerplus Corp – slide 44
    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…
  45. Investor Update – Enerplus Corp – slide 45
    Canadian GasDeep Basin (Wilrich) Contiguous land blocks in highly prospective regions Key Facts Key properties Edson, Ansell, Minehead, North Ansell Hanlan - 2-well pad drilled in Q4 2014 with partners. Net Acreage 60,000 acres…
  46. Investor Update – Enerplus Corp – slide 46
    Wilrich Activity Commenced drilling first three- EUR EUR EUR NYMEX US4.00/Mcf 5 Bcf 6 Bcf 7 Bcf well pad at Ansell in Q1 2015 NPV10 (MM) 3.6 5.0 6.3 Expected on-stream early IRR 29% 36% 45% Q2 2015 Payout (years) 2.9 2.4 2.0 IP30…
  47. Investor Update – Enerplus Corp – slide 47
    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…
  48. Investor Update – Enerplus Corp – slide 48
    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…
  49. Investor Update – Enerplus Corp – slide 49
    Supplemental Information
  50. Investor Update – Enerplus Corp – slide 50
    2014 Highlights 15% Production growth (13% per share) 14% Funds flow growth (12% per share) 7% 2P Reserves growth (6% per share) 8.62/BOE FD&A Cost 2.7x Recycle ratio 50
  51. Investor Update – Enerplus Corp – slide 51
    Funds Flow Protection in 2015 WTI Crude Oil Hedge Positions(1)(2) Natural Gas Hedge Positions(1) First half of 2015 First half of 2015 48% 61% unhedged unhedged 6%NYMEX Collars (Q1) US4.53 - 5.53/Mcf US91.86/bbl 52% 33% NYMEX…
  52. Investor Update – Enerplus Corp – slide 52
    2015 Funds Flow Sensitivities Est. effect on Est. effect on 2015 Funds Flow 2015 Funds Flow per Share 2015 Sensitivities ( Million) (/share) Change of US5.00/bbl WTI crude oil 56 0.27 Change of US0.50/Mcf NYMEX natural gas 37 0.18…
  53. Investor Update – Enerplus Corp – slide 53
    Debt Composition at December 31, 2014 Debt Composition Senior Notes Maturities(1) Bank Credit Facility - 1 billion Senior Unsecured Notes - CDN1,057 MM 11 banks in Enerplus bank credit facility Notes are rated NAIC 2 and rank equally…
  54. Investor Update – Enerplus Corp – slide 54
    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…
  55. Investor Update – Enerplus Corp – slide 55
    Enerplus Share Ownership Investor Composition(1) Geographic Composition(1) Total Retail Total Institutional 56% 44% 3% 5% 19% 42% 56% 56% 20% Retail Canadian Institutional Canada U.S. Europe & Other U.S. Institutional…
  56. Investor Update – Enerplus Corp – slide 56
    Enerplus Board of Directors continued Glen D. Roane, Director (4)(5) Mr. Roane is a corporate director and currently serves as a director of Enerplus, Badger Daylighting Ltd., Logan International Inc., SilverBirch Energy Corporation and…
  57. Investor Update – Enerplus Corp – slide 57
    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 Drew Mair The Dome Tower Manager, Investor Relations…

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