2011 CAPP Oil & Gas Investment Symposium June 13, 2011 The Game Plan Gordon J. Kerr, President & Chief Executive Officer
Enerplus Overview North American oil and gas producer focused on providing growth and income Current dividend of 7% 10 15% production growth expected by 2012 Diversified portfolio of oil and gas properties throughout High yielding…
Corporate Profile Enterprise Value (1) 5.7 billion Average Daily Trading Value (Q1 2011) 45 million 2011 Average Daily Production Guidance 78,000 80,000 BOE/day 2011 Exit Production Guidance 80,000 84,000 BOE/day Oil and…
Our Assets 80,000 acres Low decline, in liquids cash generating rich Deep assets with 70% oil Basin region significant oil & liquids upside Low 47% oil decline & liquids dry gas Growth Potential 230,000 acres Light oil 65%…
Growth Potential +550 future drilling locations Expected recycle ratios of 2.3x to 6.5x on our Bakken and Marcellus assets given current cost and price assumptions Contingent resource upside nearly double reserves of 302 MMBOE*…
Production Outlook Production growth of 10 15% over next 2 years 100 35 55% Bakken growth 90 1.3 billion in capital focused on 80 key plays 70 Bakken 85% in waterfloods, Bakken & 60 Marcellus Marcellus MMBOE/day 50…
Improved Financial Outlook 2011 and 2012 cash flow is approximately 70% weighted to liquids, up from approximately 65% in 2010 Balance sheet supports growth plans through 2012 Recent divestment activity provides further financial…
Year to Date Results on Track Q1 2011 production of 75,483 BOE/day 44% weighted to crude oil and liquids Invested 174 million in capital 80% spent in U.S. Bakken, waterfloods, and Marcellus 55% spent on oil projects severe weather…
Crude Oil
U.S. Bakken Overview Strategic asset for Enerplus for near-term growth and cash flow Economics are some of the best in our portfolio Early results point to repeatability RORs at 60 100+% Current netback is over 65/BOE Focus on…
Significant Future Production Growth from Fort Berthold Manageable growth, self-funding in 1 2 years Growth potential of 20,000 30,000 600 Incremental production - 4 to 6 rigs 25,000 BOE/day by 2014 Production assuming 4 rigs…
North Dakota Bakken & Three Forks Potential Key Facts Net Acreage 74,500 (116 sections) Current Production 4,500 BOE/day 2P Reserves (Dec. 31, 2010) 22.4 million BOE Bakken Contingent Resource 60 million BOE Est. (Best) 90…
Economics are Exceeding Type Curve Long Laterals (9,000 ft. 24 frac stages), 8.5 MM/well Long laterals are 30% ahead of the avg type well prediction Type Actual Short laterals are 45% ahead of the avg type well prediction Curve 5…
Fort Berthold Drilling Strategy Maximize long horizontals (1280s) to improve RORs Consolidate WI within spacing units to maximize operatorship Focus on multi-well pad drilling to minimize surface impact and tie-in costs Implement…
Enerplus Well Design Methodology Typical rigs are 1,000 1,600 hp with top drive to improve performance; 2 of 4 drilling rigs in fleet are self moving (walkers) Measured depth of horizontal wells are 20,000 (TVD 10,700) and drill in…
Service Contracts Support Execution Plans Drilling Rigs: 2 walking rigs under contract for 2 years 2 conventional rigs contracted through Q1 2012 Frac Services Agreement: Multi-year frac services agreement securing frac crew and…
Low Decline, Crude Oil Waterfloods Key Facts P+P Reserves (Dec 31, 2010) 83.7 MMBOE (booked to 27%) Best Est. Contingent Resources 60.5 MMBOE Recovery to date 21% Average Oil Quality 30 API 2011E Annual Production 13.5 15.0…
Waterflood Upside - Improving and Enhancing Oil Recovery Contingent Resource Total 2010 YE 2P (MMBOE) OOIP Recovered Reserves Asset (MMBOE) (MMBOE) (MMBOE) IOR EOR Total Medicine Hat, AB 217 17 16.5 6.5 21.7 28.2 Giltedge, AB 126 16…
Natural Gas
Marcellus Overview Over 110,000 net acres in the region Concentrated non-operated land position in NE Pennsylvania 45,000 non-operated acres with 20% average working interest Average EUR of 4.9 Bcf 150 MMcf/day Partnered with two…
Marcellus Shale Gas Overview 66,000 net operated acres with 90% working interest 45,000 net non-operated acres Long lease tenure with 20% avg. working interest Focused on delineation in 2011 Major non-op partners: EXCO (22%…
Improving Marcellus Performance Prior to Non-Op Sale After Non-Op Sale 6.0 Bcfe Type Curve 6.0 Bcfe Type Curve 1,400,000 1,400,000 3.5 Bcfe Type Curve Cumulative Production (MCFE) 3.5 Bcfe Type Curve Cumulative Production…
Marcellus Well Economics 4.0 Bcf Well 5.0 Bcf Well 6.0 Bcf Well * Assumes long-run 80% well cost of 6.0 MM NYMEX Payout NPV 12% Payout NPV 12% Payout NPV 12% /MMbtu IRR (Years) (MM) IRR (Years) (MM) IRR (Years) (MM) 6.00 27% 3.4…
2011 Marcellus Plans 2011 capital program of 160 million under review as a result of non-operated acreage sale Non-operated activity focused in NE PA region: EXCO currently running 2 rigs, expect to increase to 3 rigs in Q3 with…
Future Production Growth in the Marcellus Sizeable resource capture provides opportunity for material development 180 300 Production 150 250 Production of 150 MMcf/day Capital by end of 2014 120 200 Free Cash Flow (NOI -…
Attractive Valuation* Enterprise Value** per BOE of Production Price to Cash Flow per share Q1 2011 400,000 20 18 350,000 Peer Average: 120,423 16 300,000 Peer Average: 9.7x P:CF per share 14 EV/BOE/day 250,000 12…
Long-Term Strategy for Enerplus Balanced portfolio of oil and gas assets Focus on both mature properties and early stage growth plays to manage corporate decline rates and ensure disciplined capital investment High yielding Build…
Supplemental Information The Game Plan
2011 Guidance Guidance will be updated in Q2 to reflect Marcellus non-operated asset sale Summary of 2011 Expectations Target Comments Average annual production 78,000 - 80,000 BOE/day Exit rate 2011 production 80,000 - 84,000 BOE/day…
Hedging The following is a summary of the financial contracts in place at May 2, 2011 expressed as a percentage of our forecasted net production volumes: Crude Oil (US/bbl) April 1, 2011 January 1, 2012 December 31, 2011 December 31,…
2010 Year-End Reserves Summary Majority of decline in 2010 due to Oil Gas Properties Properties Total dispositions P+P Reserves (MMBOE) (Bcfe) (MMBOE) Development capital delivering Opening results Balance 171.8 1,039 344.9 All-in…
Supplemental Bakken Information
Bakken & Three Forks Geology Middle Bakken Upper Three Forks Geological Age Mississippian Devonian Depth 10,500 11,000 ft 10,600 11,000 ft Thickness 35 45 ft 30 45 ft Porosity 5 - 6% 6 - 10% Overpressure 0.6 0.8 psi/ft 0.6 0.8…
Well Timelines 10 12 months Well application / permit Waiting on Frac Site Build Drilling Fracing approval Crews 4 - 6 months 1 month 1 month/well 2 months 1 - 2 weeks Environmental assessment Cannot begin Multi-well pads…
Fort Berthold Production Gathering & Transportation Enerplus has committed to a field gathering system at the Fort Berthold Reservation which will: Aggregate production at a central collection point off the Reservation that will…
Fort Berthold Well Costs Total Cost 8.5 MM Total Cost 5.7 MM Completions - 125,000 lbs of proppant/stage, 1.3 - 1.5 MM for ceramic proppant - Water: 2,500 3,000 bbls/stage, 3 - 6/bbl for trucking & disposal fees Tie-in -…
U.S. Bakken Infrastructure Capacity 800,000 Current U.S. Bakken Plains Bakken Proposal 700,000 Keystone XL Market Link 50k production is 400 600,000 100k MBOE/day Belle Fourche Proposal 60k 500 MBOE/day in 2011 Enbridge…
Supplemental Waterflood Information
The Stages of Oil Recovery Stage Implications Waterflood Hold production steady, grow recovery Injecting high pressure water Facilities in place Maintenance costs increasing with age Improved Oil Recovery (IOR) Grow production &…
Polymer Flood Polymer is chemical additive that increases viscosity of injected water Reduces residual oil saturation Improves sweep efficiency Works best with heavier crudes in high permeability reservoirs with low waterflood…
Giltedge Polymer EOR Project Area Key Facts OOIP 126 MMBOE Area of Recovery Factor to Date 13% Polymer Project 36 Wildmere Unit (4.73% WI) Cumulative Production 16.4 MMBOE Wildmere Unit P+P Reserves (Dec 31, 2010) 10.4 MMBOE E+…
Giltedge Production History Production maintained for last decade 3000 2500 2000 Oil Production (BOE/day) 1500 1000 Total Pool Base and Incremental from Polymer project (BOE/day) 500 Pool Base Production (BOE/day)…
Giltedge Anticipated Polymer Upside Potential incremental reserve adds of 0.8 1.5 MMBOE in project area Polymer Project Area Production in project area could increase 2 - 3 times from current levels over next 20 - 30 months…
Giltedge Polymer Project Costs and Economics Material value creation opportunity Project timeline Q2 2011 first injection, production response in 6 months Polymer injection will continue for approximately four years Decision to…
Medicine Hat Glauc C Polymer Potential Key Facts OOIP 217 MMBOE Recovery Factor to Date 8% Cumulative Production 17 MMBOE P+P Reserves (Dec 31, 16.5 MMBOE (booked to 15%) 2010) Best Estimate Contingent IOR 6.5 MMBOE (+3% RF)…
Medicine Hat Glauc C Production History 3500 3000 Drilled 7 wells/5 injector Average Daily Production (BOE/day) conversions and expanded 2 batteries 2500 2000 1500 1000 45
Medicine Hat Glauc C EOR Potential EOR could more than double remaining reserves EOR design complete by mid 2011 First polymer project begins in Q2 2012 with a second project starting one year later Estimated incremental…
2011 Development Capital Plans at Med Hat EOR Project 2 million: Facilities 10 million: Wells 12 million: Total Budget - 24 million: Early costs including Battery expansions Decrease HZ well Optimized production design, skids, etc.…
Freda/Skinner/Neptune, SK - Ratcliffe & Bakken Approximately 115,000 net acres of Ratcliffe rights Majority overlay Bakken rights Oungre/Ratcliffe zones at a 1,600 - 1,800 metre depth Current Ratcliffe production 1,700 BOE/day…
Freda Lake Ratcliffe Unit Key Facts Freda Lake Ratcliffe Voluntary Unit 1 OOIP 55 MMBOE 99.86% WI Recovery Factor to Date 14% Cumulative Production 8 MMBOE P+P Reserves (Dec. 31, 2010) 10.2 MMBOE (booked to 31%) Best Est.…
Freda Lake Ratcliffe Unit Production Up to 14 more HZ wells to drill in the unit 2,500 Verticals & Horizontals - Oil Rate Vertical Wells Only - Oil Rate 2,000 Expected Production Oil Production (BOE/day) Water Injector…
Supplemental Marcellus Information
Marcellus Well Design Drilling (Average 30 days) Operated Drilling primarily delineation wells with vertical pilot, cores and logs 5 single well pads in Centre County, PA (2 wells ) and Preston County, WV (3 wells) Drilling costs…
Marcellus Well Timeline 6 8 months Well application / permit Waiting on Frac Site Build Drilling Fracing approval Crews 45 60 days in PA 45 90 days 25 35 30 - 60 days 7 - 14 days days/well 30 45 days in WV Cannot begin…
Moving Natural Gas Out of the Marcellus Enerplus has taken several steps to ensure we can move our growing Marcellus gas production to market: Entered into longer term (5 years +) firm must take contracts with creditworthy…
Marcellus Water Access & Handling ERF and our JV partners have sufficient water source permits to execute development plans ERF and our JV partners are permitting and constructing additional water impoundments Implemented closed…
Supplemental Deep Basin Information
Deep Basin Opportunity Approximately 80,000 net Montney Potential acres of high working interest land in the Deep Basin 20,000 net acres of undeveloped land Includes 100% working interest in approximately 60,000 undeveloped…
Deep Basin Development Plan Pace of development heavily influenced by natural gas prices High working interest and 3+ years of land tenure allow us to control the pace of play on our undeveloped land position Benefiting from…
Disclaimers For information regarding the primary contingencies which currently prevent the classification of our disclosed contingent resources associated with our Marcellus shale gas assets as reserves and the positive and negative…
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