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TD Securities London Energy Conference – Enerplus Corp

Enerplus Corp · Jan 14, 2013 · 45 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. TD Securities London Energy Conference – Enerplus Corp – slide 1
    TD Securities London Energy Conference The Game Plan January 2013
  2. TD Securities London Energy Conference – Enerplus Corp – slide 2
    Why Enerplus Solid financial strength and improving sustainability Top tier assets Compelling dividend Attractive valuation 1
  3. TD Securities London Energy Conference – Enerplus Corp – slide 3
    Financial Strength and Improving Sustainability 230% Significant value creation from A&D activity has: 210% 212% Supported capital investment 190% and dividend 190% Preserved balance sheet 170% Adjusted Payout Ratio Expect…
  4. TD Securities London Energy Conference – Enerplus Corp – slide 4
    Top Tier Assets Resource play focus with significant growth potential Crude Oil - Bakken US Natural Gas - Marcellus Canadian liquids rich natural gas: Balanced portfolio of Stacked Mannville oil and gas in both Duvernay Canada…
  5. TD Securities London Energy Conference – Enerplus Corp – slide 5
    Top Tier Assets Delivering Organic Growth 85,000 88,000 84,000 88,000 90,000 82,000 85,000 81,573 82,000 80,000 75,332 70,000 60,000 BOE/day 50,000 40,000 30,000 20,000 10,000 - 2011 AA 2012 YTD 2012E AA 2012E…
  6. TD Securities London Energy Conference – Enerplus Corp – slide 6
    Competitive Reserve Addition Costs 30 26.26 25 Oil reserves increased by 14%: /BOE 20 17.22 17.89 75% of reserve additions from oil 15 and liquids 10 8.57 Oil recycle ratio of 1.9x 5 F&D costs attractive despite 150 0…
  7. TD Securities London Energy Conference – Enerplus Corp – slide 7
    Attractive Valuation Enerplus Peer Average (Range) 2013E Price/DACF 4.8x 7.8x (4.8x 10.6x) 8.1x 2013E EV/EBITDA 5.0x (4.8x 10.6x) 2013E EV per Daily BOE 45,327 87,832 (39,723 150,788) 2.0x 2013E Debt to Cash Flow…
  8. TD Securities London Energy Conference – Enerplus Corp – slide 8
    2013 Outlook Funds flow growth of 11% Debt-adjusted funds flow grows 6% per share Reduced capital spending by 20% Reduced spending on Marcellus gas 85% of spend on oil and liquids rich natural gas plays Focused on improving capital…
  9. TD Securities London Energy Conference – Enerplus Corp – slide 9
    Why Enerplus Financial strength and improving sustainability Improving cost structures and capital efficiencies Delivering attractive reserve, production growth and funds flow growth Top Tier assets Low decline asset base with…
  10. TD Securities London Energy Conference – Enerplus Corp – slide 10
    2013 Outlook
  11. TD Securities London Energy Conference – Enerplus Corp – slide 11
    Guidance Overview Operations and Expenses* 2012E 2013E Change Capital Expenditures (millions) 850 685 -20% Annual Average Production (BOE/day) 82,000 82,000 85,000 +2% Exit Production (BOE/day) 85,000 88,000 84,000 88,000 -…
  12. TD Securities London Energy Conference – Enerplus Corp – slide 12
    Cash Flow Protection Crude oil hedges on 57% of 2013 Crude Oil & Natural Gas 2013 net production at a fixed 100% Hedge Positions* price averaging US100.84/bbl Natural gas hedges on 2013 net 80% production: % of net after royalty…
  13. TD Securities London Energy Conference – Enerplus Corp – slide 13
    2013 Capital Budget Pricing and Sensitivity 2013 Forward Prices as of Nov 26, 2012 Oil - WTI (US/bbl) 90.39 Oil Edmonton Par (/bbl) 85.73 Gas NYMEX (US/Mcf) 3.96 Gas AECO (/Mcf) 3.57 2013 Sensitivities Est. effect on 2013 Funds…
  14. TD Securities London Energy Conference – Enerplus Corp – slide 14
    Production Composition and Differentials 2013E Production 2013E Crude Oil Composition US Gas 16% US Oil 24% Canada Heavy 25% Canada US Light 52% Medium 12% Canada Canada Gas 34% Oil 22% Estimated 2013 Differentials US…
  15. TD Securities London Energy Conference – Enerplus Corp – slide 15
    Crude Oil Differentials in North Dakota Rail (50% of takeaway capacity in 2013) has debottlenecked North Dakota Used rail as an option to ensure takeaway and help reduce impact of wider differentials: 30% of our US Bakken production…
  16. TD Securities London Energy Conference – Enerplus Corp – slide 16
    Ample Takeaway Capacity in North Dakota 15
  17. TD Securities London Energy Conference – Enerplus Corp – slide 17
    Asset Review: Crude Oil
  18. TD Securities London Energy Conference – Enerplus Corp – slide 18
    Top Tier Light Oil Play in North Dakota Current Operated and Non-Operated Locations Key Facts OOIP 18 22 MMbbls/1280 DSU Net Acreage (90% WI) 70,000 (110 sections) 2011 P+P Reserves 55.4 MMBOE 2011 Contingent Res. Est. 49 MMBOE…
  19. TD Securities London Energy Conference – Enerplus Corp – slide 19
    Delivering Organic Oil Growth at Fort Berthold 2013 production expected to grow over 30% - averaging 16,000 BOE/day 20,000 340 million of capital spending planned for 18,000 2013, 90% on drilling and completions 16,000 Expect to…
  20. TD Securities London Energy Conference – Enerplus Corp – slide 20
    Fort Berthold Well Results in Line with Expectations 3 1 2 4 4 5 5 6 5 6 7 10 7 16 7 18 1 12 18 1 19 wells 21 2 2 wells 4 3 5 4 6 8 wells 6 wells (400 Mbbls of oil, 55 MBOE of liquids and gas) (800 Mbbls of oil,…
  21. TD Securities London Energy Conference – Enerplus Corp – slide 21
    North Dakota Economics (long lateral wells) EUR Variables Range of EURs Density 500 800 Mbbls Bakken vs Three Forks Budgeted Well Costs 12.9 MM Economics* Range of IRRs Projected IRR 17% - 44% 10% Reduction in Well Costs 21% - 55%…
  22. TD Securities London Energy Conference – Enerplus Corp – slide 22
    Fort Berthold Well Spacing (1280 acres per drill spacing unit) 2P (EUR) 2P + CR (EUR) Potential Upside Bakken Bakken Middle Middle 800 800 800 800 Lower Bakken Lower Bakken Lower Bakken Three Three…
  23. TD Securities London Energy Conference – Enerplus Corp – slide 23
    Consolidating Ownership at Sleeping Giant Key Facts 2011 P+P Reserves* 32.4 MMBOE 90% operated working interest Current Production* 7,300 BOE/day Over 400 million barrels of original oil in place 90% Operated Working Interest 8%…
  24. TD Securities London Energy Conference – Enerplus Corp – slide 24
    Sleeping Giant Purchase vs. Manitoba Asset Sale (Based on internal evaluations and November 23, 2012 pricing) Sleeping Giant Manitoba Purchase Price [M] * 131,000 220,000 Working Interest [%] 90% (post transaction) 52% Funds flow…
  25. TD Securities London Energy Conference – Enerplus Corp – slide 25
    Low Decline Canadian Waterflood Assets Mature producing properties with low decline rate of 12% High working interest ownership of over 90% Significant free cash flow generation Over 1.2 billion barrels original oil in place with…
  26. TD Securities London Energy Conference – Enerplus Corp – slide 26
    Defining the IOR/EOR Opportunity 2011 Contingent Resource Total YE 2P (MMBbl) 2011 Net OOIP (net) Recovered Reserves Total Operating Asset (MMBbl) (MMBbl) (MMBOE) IOR EOR Total Recoverable Income Medicine Hat, AB 217 17.7 16.7 5.5 21.7…
  27. TD Securities London Energy Conference – Enerplus Corp – slide 27
    Waterflood Success Story - Medicine Hat Glauc C Key Facts OOIP 217 MMBbl Second Project Area Recovery Factor to Date 8% Cumulative Production 17.7 MMBbl P+P Reserves (Dec 31, 16.7 MMBOE (booked to 16%) 2011) Best Estimate…
  28. TD Securities London Energy Conference – Enerplus Corp – slide 28
    Medicine Hat Glauc C Production History 4000 50% growth achieved over 5 years with 45% reinvestment 3500 Average Daily Production (BOE/day) 3000 2500 2000 Implemented new waterflood 1500 development strategy in…
  29. TD Securities London Energy Conference – Enerplus Corp – slide 29
    Asset Review: Natural Gas
  30. TD Securities London Energy Conference – Enerplus Corp – slide 30
    Marcellus: Reduced Spending on Dry Gas 2013 capital program of 80 million, 50% reduction from 2012 Virtually all spending is non-operated focused on opportunities with robust economics Susquehanna 10% to 25% IRR Bradford 5% to 15%…
  31. TD Securities London Energy Conference – Enerplus Corp – slide 31
    NE Pennsylvania Average Well Performance Wells in top tier acreage significantly outperforming type curve * Production data as of October 31, 2012 30
  32. TD Securities London Energy Conference – Enerplus Corp – slide 32
    Marcellus Economics 45% 40% Core areas with 8 to 10 BCF 5/Mcf NYMEX wells deliver positve returns 35% 30% 25% 4/Mcf NYMEX Rate of Return 20% 15% 3/Mcf NYMEX 10% 5% 0% 6.0 7.0 8.0 9.0 10.0 EUR (bcf)…
  33. TD Securities London Energy Conference – Enerplus Corp – slide 33
    An Abundance of Deep Gas Opportunity Montney 33,000 net acres of Approximately 175,000 net acres of undeveloped land, 100% WI high working interest land Liquids rich potential in Stacked Mannville, Duvernay and Montney Stacked…
  34. TD Securities London Energy Conference – Enerplus Corp – slide 34
    Deep Gas - Wilrich Key Facts Key properties Ansell, Minehead, Hanlan Net Acreage (acres) 70,000 acres (110 sections) Future HZ Drilling 100 - 200 Locations Expected EUR/Well 4.0 - 6.0 Bcfe 2013 capital program of 40 million…
  35. TD Securities London Energy Conference – Enerplus Corp – slide 35
    Wilrich Type Curve and Performance 5.0 Bcf Well 6.0 Bcf Well Positive Drilling Results Pay NPV Pay NPV 1,600 AECO IRR out 10% IRR out 10% Cumulative Production (MMcf) (/Mcf) % (Yrs) (MM) % (Yrs) (MM) 1,400 1 Well 4.00 54 1.8…
  36. TD Securities London Energy Conference – Enerplus Corp – slide 36
    Duvernay: Emerging Top Quality Liquids-Rich Resource Play Key Facts Analogous rock characteristics to the Key Properties Willesden Green, AB Eagleford Net Acreage 72,000 acres (113 sections, Prolific over-pressured Devonian source 100%…
  37. TD Securities London Energy Conference – Enerplus Corp – slide 37
    Duvernay Shale Willesden Green 36
  38. TD Securities London Energy Conference – Enerplus Corp – slide 38
    Montney Cameron/Julienne Creek Key Facts Key Properties Cameron/Julienne Creek Progress/Petronas Net Acreage 33,000 acres (+50 sections) North Montney JV Estimated OGIP 150 Bcf/section (Lily) Future Hz Drilling 500+ Locations…
  39. TD Securities London Energy Conference – Enerplus Corp – slide 39
    Upper Montney Type Curve Economics 4.0 Bcf Well 5.0 Bcf Well 6.0 Bcf Well NPV NPV NPV AECO IRR Payout 10% IRR Payout 10% IRR Payout 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…
  40. TD Securities London Energy Conference – Enerplus Corp – slide 40
    Supplemental Information The Game Plan
  41. TD Securities London Energy Conference – Enerplus Corp – slide 41
    Corporate Profile Ticker Symbol (TSX & NYSE) ERF Enterprise Value(1) 3.7 billion Average Daily Trading Value (through Q3 2012) 49 million 2013E Average Daily Production 82,000 85,000 BOE/day 2013E Exit Production 84,000 88,000…
  42. TD Securities London Energy Conference – Enerplus Corp – slide 42
    Commitment to Dividend Model Capital markets place higher valuation on Investor Composition dividend paying energy companies Energy yield companies currently trading at 3.0x EV/EBITDA and 2.8x cash flow 13% multiple premium to…
  43. TD Securities London Energy Conference – Enerplus Corp – slide 43
    Stock Dividend Program (SDP) Benefits: All shareholders are now eligible to participate Shareholders can elect to receive cash dividends or Enerplus shares 5% discount to current market price and no fees or commissions Participation…
  44. TD Securities London Energy Conference – Enerplus Corp – slide 44
    Enerplus Share Ownership Investor Composition Geographic Composition Total Institutional 13% 31% Total Retail 69% 23% 35% 18% 65% 46% US/Intl Institutional Canadian Institutional Canada US and Other US/Intl Retail…
  45. TD Securities London Energy Conference – Enerplus Corp – slide 45
    Investor Relations Contacts Jo-Anne M. Caza Vice President, Corporate & Investor Relations 403-298-2273 jcazaenerplus.com Garth Doll Manager, Investor Relations 403-298-1218 gdollenerplus.com 1-800-319-6462…

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