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EnerCom Oil & Gas Conference – Enerplus Corp

Enerplus Corp · Aug 13, 2013 · 59 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. EnerCom Oil & Gas Conference – Enerplus Corp – slide 1
    Investor Update August 2013
  2. EnerCom Oil & Gas Conference – Enerplus Corp – slide 2
    Corporate Profile Ticker Symbol (TSX & NYSE) ERF Enterprise Value(1) 4.5 billion Average Daily Trading Value (Q2 2013) 27 million 2013E Average Daily Production 85,000 BOE/day 2013E Exit Production 84,000 88,000 BOE/day Oil and…
  3. EnerCom Oil & Gas Conference – Enerplus Corp – slide 3
    Corporate Strategy Deliver sustainable, profitable growth and dividend income to investors Develop top tier growth plays and mature foundation assets Disciplined, return-based capital allocation and active portfolio management…
  4. EnerCom Oil & Gas Conference – Enerplus Corp – slide 4
    Demonstrated 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 Q1 2013 Q2 2013 Oil & Natural Gas Liquids…
  5. EnerCom Oil & Gas Conference – Enerplus Corp – slide 5
    Delivering Funds Flow Growth Increasing oil production has 745* helped drive funds flow growth over past three years 700 644 2013 1H funds flow of 600 574 377million 500 1H adjusted payout ratio of 106% before divestments…
  6. EnerCom Oil & Gas Conference – Enerplus Corp – slide 6
    2013 & 2014 Funds Flow Protection Crude Oil Hedge Positions* Natural Gas Hedge Positions* (US/bbl) (/Mcf) 80% 70% 75% 70% 60% % of net after royalty production % of net after royalty production 60% 56% 50% 50% 40% 40% 32%…
  7. EnerCom Oil & Gas Conference – Enerplus Corp – slide 7
    2013 YTD Performance Ahead of Expectations Production guidance maintained despite sale of non-core assets given strong performance of portfolio year-to-date 1H 2013 Guidance Production 85,000 BOE/day Average 88,618 BOE/day…
  8. EnerCom Oil & Gas Conference – Enerplus Corp – slide 8
    Four Core Areas US Oil - Williston Basin Sleeping Giant and Fort Berthold properties Production Mix +130 future drilling locations U.S. 40% US Natural Gas Marcellus Non-op position in best dry gas play in NA 200 future drilling…
  9. EnerCom Oil & Gas Conference – Enerplus Corp – slide 9
    World Class Oil Asset: Fort Berthold, North Dakota Key Facts Fort Berthold Indian Reservation OOIP 17 22 MMbbls (1280 DSU) Net Acreage (88% WI) 70,000 (109 sections) 2012 Contingent Res. Est. 33.5 MMBOE MCKENZIE Nesson…
  10. EnerCom Oil & Gas Conference – Enerplus Corp – slide 10
    Significant Running Room* 2P + CR (EUR) 130 net undrilled locations 6 years inventory OOIP: 17-22 MMbbls/1280 DSU Downspacing Upside 150 net additional locations 8 years additional inventory Additional localized upside…
  11. EnerCom Oil & Gas Conference – Enerplus Corp – slide 11
    Fort Berthold - YTD Well Performance Within Type Curve Range Oil EUR NPV10 IRR BESC (Mbbl) (MM) (/bbl) 800 13.7 57% 51.00 650 9.1 38% 58.50 500 4.1 22% 71.00 OOIP and EURs will determine which regions may be developed with 7…
  12. EnerCom Oil & Gas Conference – Enerplus Corp – slide 12
    2013 Completion Optimization: Increasing Frac Stages with White Sand Stages Spacing Proppant Type of (ft) (lb/stage) Proppant Q1 2013 28-29 330-340 110,550 Ceramic 1 Transition 28-29 340 255,000 White Sand ROY 35-38 250-270 195,000…
  13. EnerCom Oil & Gas Conference – Enerplus Corp – slide 13
    Williston Basin Assets Deliver Significant Cash Flow 35 700 30 600 25 500 Million CDN MBOE/Day 20 400 15 300 10 200 5 100 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Capital (MM) NOI (MM) fwd price…
  14. EnerCom Oil & Gas Conference – Enerplus Corp – slide 14
    Low Decline Canadian Crude Oil Assets 2013E Production 2% Low decline assets with 18% 7% average decline rate of 12% 10% High working interest in all properties 13% 24% 21% of corporate production with significant free cash…
  15. EnerCom Oil & Gas Conference – Enerplus Corp – slide 15
    Significant Free Cash Flow from Waterflood Assets 350 300 250 Million 200 150 58% 56% 100 44% 50 17% 0 2009 2010 2011 2012 Capital Free Cash Flow 15
  16. EnerCom Oil & Gas Conference – Enerplus Corp – slide 16
    Marcellus Core Development Area EURs range from 6-12 Bcf in Bradford, Susquehanna, Sullivan, Wyoming and Lycoming counties. Well IPs in these areas typically greater than 8 MMcf/day; IPs in some areas greater than 20 MMcf/day.…
  17. EnerCom Oil & Gas Conference – Enerplus Corp – slide 17
    Marcellus - Performance and Economics EUR NPV10 IRR BESC (MM) (/Mcf) 12 Bcf 8.0 53% 2.45 12 Bcf 10 Bcf 4.8 30% 2.62 8 Bcf 1.9 17% 3.71 6 Bcf (-0.2) 9% 4.20 10 Bcf 8 Bcf Bradford, Susquehanna top 6 Bcf producing areas…
  18. EnerCom Oil & Gas Conference – Enerplus Corp – slide 18
    Marcellus Non-Op Cash Flow Positive 2014 and Beyond 180 180 160 160 140 140 120 120 MMcf/Day Millions 100 100 80 80 60 60 40 40 20 20 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Capital NOI NOI Upside Case…
  19. EnerCom Oil & Gas Conference – Enerplus Corp – slide 19
    An Abundance of Deep Basin Opportunities Core growth area with over 1,000 Montney potential future drilling locations in 34,000 net acres of undeveloped land, 100% WI the Wilrich, Montney and Duvernay Stacked Mannville…
  20. EnerCom Oil & Gas Conference – Enerplus Corp – slide 20
    Canadian Gas Deep Basin Contiguous land blocks in highly prospective regions Key Facts Key properties Ansell, Minehead, Hanlan - ERF smaller acreage position Net Acreage (acres) 54,000 acres (84 - Infrastructure available…
  21. EnerCom Oil & Gas Conference – Enerplus Corp – slide 21
    Wilrich Positive Drilling Results 5.0 Bcf Well 6.0 Bcf Well 7.0 Bcf Well Pay NPV Pay NPV Pay NPV AECO IRR out 10% IRR out 10% IRR out 10% (/Mcf) % (Yrs) (MM) % (Yrs) (MM) % (Yrs) (MM) 4.00 30 2.8 3.9 38 2.4 5.3 46 2.0 6.7 3.00 17…
  22. EnerCom Oil & Gas Conference – Enerplus Corp – slide 22
    Why Enerplus Strong balance sheet and sustainable business model Compelling assets in Canada and U.S. with low decline and good inventory of growth prospects Compelling dividend currently 6.5% Attractive valuation relative to asset…
  23. EnerCom Oil & Gas Conference – Enerplus Corp – slide 23
    Core Oil Assets
  24. EnerCom Oil & Gas Conference – Enerplus Corp – slide 24
    Core Light Oil Assets in the Williston Basin Williston Basin assets contributing 100 million cash flow (net of capital) in 2013 Bakken/ Three Forks Q2/13 Production: 22,600 BOE/day Play Area Sleeping Giant 33% Fort Berthold…
  25. EnerCom Oil & Gas Conference – Enerplus Corp – slide 25
    Fort Berthold: Delivering Organic Oil Growth 16 Q2 2013 record production of over 15,100 Production 14 BOE/day 12 Expected to exit 2013 at 18,000 BOE/day 10 MBOE/day 8 Expect to drill and complete 20 - 25 net wells 6 (2/3…
  26. EnerCom Oil & Gas Conference – Enerplus Corp – slide 26
    Three Forks Upside - Recent Industry Results Upper Three Forks productive throughout EOG 2nd Bench TF acreage Test 80,000 Bbl in 2 months Fort Berthold Very strong Three Forks Indian Reservation EOG 3 sectionTF results along…
  27. EnerCom Oil & Gas Conference – Enerplus Corp – slide 27
    Fort Berthold Well Cost Structure Continues To Improve Drilling days falling over time Optimized bit selection through vertical and curve building section Improved motor technology decreases time to drill lateral Improved…
  28. EnerCom Oil & Gas Conference – Enerplus Corp – slide 28
    Enerplus well positioned to utilize optionality provided by over-capacity build Q2/2013 Enerplus moved approximately 45% of its production by rail, however this has fallen recently due the changing economics of rail vs pipeline…
  29. EnerCom Oil & Gas Conference – Enerplus Corp – slide 29
    Takeaway Capacity Overbuilt in Montana /North Dakota Production: 825 Mbbls/day Pipe Rail Combined Capacity: 1.3 MMbbls/day 1.3 MMbbls/day of combined rail and pipeline capacity out of the US Bakken region currently exceeds…
  30. EnerCom Oil & Gas Conference – Enerplus Corp – slide 30
    Canadian Waterflood Assets: 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…
  31. EnerCom Oil & Gas Conference – Enerplus Corp – slide 31
    2013 Canadian Oil Capital Program 2013E Capital Allocation 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 Coupe Neptune…
  32. EnerCom Oil & Gas Conference – Enerplus Corp – slide 32
    MHGC - Future Development Opportunity Key Facts OOIP 224 MMBOE Recovery Factor to Date 9% Cumulative Production 19 MMBbls P+P Reserves (Dec 31, 21.1 MMBOE 2012) Best Estimate Contingent IOR 1.5 MMBOE Resource (Dec 31, 2012) EOR…
  33. EnerCom Oil & Gas Conference – Enerplus Corp – slide 33
    Medicine Hat Glauc C Production Development 7000 Med Hat Glauc C - Net Oil Production 6000 Q1 2009 Q4 2012 33 Hz wells drilled, 14 Inj. Convs., 2 Batteries (Gross) Oil Rate (CD) bbl/d 5000 Total Capital = 80.2 MM Net 2009…
  34. EnerCom Oil & Gas Conference – Enerplus Corp – slide 34
    Success of IOR/EOR at Medicine Hat 50 3,500 45 3,000 40 35 2,500 BOE/day Million 30 2,000 25 20 1,500 15 66% 1,000 61% 10 67% 500 5 21% 0 - 2009 2010 2011 2012 Capital Free Cash Flow Avg Daily Production 2P…
  35. EnerCom Oil & Gas Conference – Enerplus Corp – slide 35
    Core Natural Gas Assets
  36. EnerCom Oil & Gas Conference – Enerplus Corp – slide 36
    Marcellus - Best Dry Gas Play Economics Thickest, Best Part of Play 40,000 net non-operated acres concentrated in NE Pennsylvania 50,000 operated net acres in Pennsylvania & West Virginia Non-Operated Partners: Chief 15% WI Exco…
  37. EnerCom Oil & Gas Conference – Enerplus Corp – slide 37
    Marcellus: Significant Future Growth Potential County Contingent Resource (Bcf) 1.3 Tcf of best estimate economic contingent resource Susquehanna 145 at Dec. 31, 2012 in areas where wells would be Bradford 200 90% of total consented…
  38. EnerCom Oil & Gas Conference – Enerplus Corp – slide 38
    Marcellus: Delivering Organic Growth 90 Production 80 Q2 2013 production of 88 MMcf/day 70 Represents 30% of corporate natural gas MMcfe/day 60 50 production 40 30 30 net wells currently on production 20 10 14 net wells…
  39. EnerCom Oil & Gas Conference – Enerplus Corp – slide 39
    Marcellus - Optimizing Completion Design Proppant Stage Concentration Perf Clusters / Spacing (ft) (lb/stage) Stage Pre-2012 450 - 500 500,000 585,000 8-9 2012 250 - 300 385,000 500,000 4-6 2013 250 - 300…
  40. EnerCom Oil & Gas Conference – Enerplus Corp – slide 40
    Marcellus: Recent Well Completions vs Type Curve Top 10-20% of wells can have rates as high New Wells On-Stream in Bradford / as 20 MMcf/day Susquehanna Development Areas excluding Toe-Fracs Daily Production per well…
  41. EnerCom Oil & Gas Conference – Enerplus Corp – slide 41
    Marcellus: Improving Economic Landscape Original 2013 forecast: 8.7 million to drill and complete a well Current operator AFEs range from 8.7 million to 6.1 million Cost reduction from 8.7 million to 6.1 million increases IRR from 35%…
  42. EnerCom Oil & Gas Conference – Enerplus Corp – slide 42
    Marcellus Takeaway Capacity Enerplus has been positioning since 2010 to shift volume from Tennessee Wyoming Pipeline to Transco via Wyoming Pipeline Contracts to sell under must take/must deliver (majority on Transco) 2013 80…
  43. EnerCom Oil & Gas Conference – Enerplus Corp – slide 43
    Montney Cameron/Julienne Creek Key Facts Key Properties Cameron/Julienne Creek Net Acreage 34,000 acres (+50 sections, 100% WI) Estimated OGIP 250 - 400 Bcf/section (supported by core analysis) Future Hz Drilling 500 Locations…
  44. EnerCom Oil & Gas Conference – Enerplus Corp – slide 44
    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 3.00…
  45. EnerCom Oil & Gas Conference – Enerplus Corp – slide 45
    Duvernay Shale Willesden Green Built land position within past 18 months - Key…
  46. EnerCom Oil & Gas Conference – Enerplus Corp – slide 46
    Duvernay Shale Willesden Green Enerplus 46
  47. EnerCom Oil & Gas Conference – Enerplus Corp – slide 47
    Supplemental Information
  48. EnerCom Oil & Gas Conference – Enerplus Corp – slide 48
    Increased Focus Dramatic improvement in focus of the asset base over the past 4 years as a result of acquisitions, divestments and capital investment Four Core Areas Net Present Value of 100% Top 10 Assets 86% of NPV 90% 75% of…
  49. EnerCom Oil & Gas Conference – Enerplus Corp – slide 49
    Improving Profitability Capital Efficiency 2012 Exit Capital Efficiency versus 2013 Estimated Operating Netback* 60 VET 2013E Operating Netback (/boe) 50 CPG Target: EGL Optimal quadrant 2013 TD Estimates* PBN 40 Operating…
  50. EnerCom Oil & Gas Conference – Enerplus Corp – slide 50
    Drilling Inventory/Opportunity 2P & CR Inventory: Unrisked Inventory: 600 Locations 1,200 Locations Core Waterfloods Deep Basin Marcellus 206 950 202 Fort Other Deep Basin Berthold Bakken Waterflood 64 133 150 100 50
  51. EnerCom Oil & Gas Conference – Enerplus Corp – slide 51
    Inventory Profitability of Total Locations* where Recycle Ratio is Greater than 2.0x 700 600 500 400 Locations of Well 300 200 100 0 2.00 3.00 4.00 5.00 Aeco Pricing (/GJ) 100/bbl WTI 85/bbl WTI 70/bbl WTI *…
  52. EnerCom Oil & Gas Conference – Enerplus Corp – slide 52
    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…
  53. EnerCom Oil & Gas Conference – Enerplus Corp – slide 53
    Production Composition and Differentials 2013E Production 2013E Crude Oil Composition US Gas US Oil Canada 18% 23% Heavy 25% Canada US Medium Light 12% 52% Canada Canada Gas Oil 34% 21% Canada Light 11% NGLs 4% 2013…
  54. EnerCom Oil & Gas Conference – Enerplus Corp – slide 54
    2013 Capital Budget Sensitivities Est. effect on 2013 Sensitivities (as of July 22, 2013*) 2013 Funds Flow ( Million) Change of 5.00/bbl WTI crude oil 12 Change of 0.50/Mcf natural gas 16 Change of 1,000 BOE/day production 5…
  55. EnerCom Oil & Gas Conference – Enerplus Corp – slide 55
    Improving Focus and Sustainability through A&D Activity Acquisition Disposition Acquisition Disposition Taylorton / Sleeping Giant Manitoba Pouce Coupe Turner Valley Purchase Price Purchase Price 118,000 218,000 30,000 57,800 (000s)…
  56. EnerCom Oil & Gas Conference – Enerplus Corp – slide 56
    Debt Composition* Bank Credit Facility - 1 billion 11 banks in Enerplus bank credit facility Senior Unsecured, covenant-based with current Unutilized Notes* Capacity US744MM borrowing rate of less than 3% 670MM CAD70MM Credit…
  57. EnerCom Oil & Gas Conference – Enerplus Corp – slide 57
    Enerplus Share Ownership Investor Composition Geographic Composition Total Retail Total Institutional 71% 29% Canadian US/Intl Retail Institutional 19% 10% US and Other Canada 62% 38% Canadian US/Intl Retail Institutional 52%…
  58. EnerCom Oil & Gas Conference – Enerplus Corp – slide 58
    Valuation Relative to Peers RBC Capital Markets research dated July 29, 2013. RBC Pricing Assumptions: WTI 2013 58 US96.00/bbl; Henry Hub 2013 US3.82/Mcf; 2013 US/CDN0.970
  59. EnerCom Oil & Gas Conference – Enerplus Corp – slide 59
    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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