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FirstEnergy Capital – Enerplus Corp

Enerplus Corp · Sep 16, 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. FirstEnergy Capital – Enerplus Corp – slide 1
    FirstEnergy Capital September 16 & 17, 2013 September 2013
  2. FirstEnergy Capital – Enerplus Corp – slide 2
    Corporate Profile Ticker Symbol (TSX & NYSE) ERF Enterprise Value(1) 4.7 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. FirstEnergy Capital – Enerplus Corp – slide 3
    Corporate Strategy Deliver sustainable, profitable growth and income to investors Annual cash flow per share growth with competitive yield provides attractive total return Focused asset base with core positions in top tier resource…
  4. FirstEnergy Capital – Enerplus Corp – slide 4
    Four Core Areas US Oil - Williston Basin 2013 Capital Sleeping Giant and Fort Berthold properties 50% +130 future drilling locations US Natural Gas Marcellus 2013 Capital Non-op position in best dry gas play in NA 15% 200 future…
  5. FirstEnergy Capital – Enerplus Corp – slide 5
    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…
  6. FirstEnergy Capital – Enerplus Corp – slide 6
    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…
  7. FirstEnergy Capital – Enerplus Corp – slide 7
    Delivering Funds Flow Growth Increasing oil production has helped drive funds flow 800 764* growth over past three years 700 644 2013 1H funds flow of 377million 600 574 1H adjusted payout ratio of 500 106% before divestments…
  8. FirstEnergy Capital – Enerplus Corp – slide 8
    2013 Financial Outlook 2013 Fully Funded Cash In-flows*: 941 MM Cash Out-flows: 900 MM Funds Flow: 764 Capex: 685 Net Sales: 137 Dividends: 215 SDP: 40 * Based upon analyst consensus for funds flow as of August 12, 2013, net…
  9. FirstEnergy Capital – Enerplus Corp – slide 9
    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…
  10. FirstEnergy Capital – Enerplus Corp – slide 10
    Top Tier 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 Future…
  11. FirstEnergy Capital – Enerplus Corp – slide 11
    Significant Running Room at Ft. Berthold* 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…
  12. FirstEnergy Capital – Enerplus Corp – slide 12
    2013 Completion Optimization: Increasing Frac Stages with White Sand 2013 Transition Wells Using White Sand Oil EUR NPV10 IRR BESC (Mbbls) (MM) (/bbl) Cirrus 100 Nimbus 800 13.7 57% 51.00 800 90 Bluestem(TF) Mbbls 650 9.1 38%…
  13. FirstEnergy Capital – 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. FirstEnergy Capital – Enerplus Corp – slide 14
    Low Decline Canadian Crude Oil Assets 2013E Production 2% 18% 7% Low decline assets with 10% average decline rate of 12% 13% High working interest in all 24% properties 18% 20% of corporate production 4% 4% with significant…
  15. FirstEnergy Capital – 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. FirstEnergy Capital – Enerplus Corp – slide 16
    Marcellus Tier 1 Dry Gas 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 20% WI…
  17. FirstEnergy Capital – Enerplus Corp – slide 17
    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…
  18. FirstEnergy Capital – Enerplus Corp – slide 18
    Marcellus - Performance and Economics EUR NPV10 IRR BESC (MM) (/Mcf) 12 Bcf 6.5 47% 2.45 12 Bcf 10 Bcf 3.3 24% 2.62 8 Bcf 1.1 14% 3.71 6 Bcf (-1.2) 5% 4.20 10 Bcf 8 Bcf Bradford, Susquehanna top 6 Bcf producing areas Core…
  19. FirstEnergy Capital – 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. FirstEnergy Capital – Enerplus Corp – slide 20
    Canadian Gas Deep Basin (Wilrich) 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…
  21. FirstEnergy Capital – Enerplus Corp – slide 21
    Why Enerplus Repositioned Company resulting in: Concentrated asset base in Canada and U.S. with improved operational focus Emphasis on profitability and capital discipline delivering compelling funds flow growth Low corporate…
  22. FirstEnergy Capital – Enerplus Corp – slide 22
    Core Oil Assets
  23. FirstEnergy Capital – Enerplus Corp – slide 23
    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…
  24. FirstEnergy Capital – Enerplus Corp – slide 24
    Fort Berthold: Delivering Organic Oil Growth 16 Production 14 Q2 2013 record production of over 15,100 12 BOE/day 10 Expected to exit 2013 at 18,000 BOE/day MBOE/day 8 6 Expect to drill and complete 20 - 25 net wells 4 (2/3…
  25. FirstEnergy Capital – Enerplus Corp – slide 25
    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…
  26. FirstEnergy Capital – Enerplus Corp – slide 26
    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…
  27. FirstEnergy Capital – Enerplus Corp – slide 27
    Enerplus well positioned to utilize optionality provided by over-capacity build Differential to WTI : US/bbl 5.00 Representative Q2/2013 Enerplus moved 0.00 Bakken Field approximately 45% of its production netback via Pipe -5.00…
  28. FirstEnergy Capital – Enerplus Corp – slide 28
    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…
  29. FirstEnergy Capital – Enerplus Corp – slide 29
    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…
  30. FirstEnergy Capital – Enerplus Corp – slide 30
    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…
  31. FirstEnergy Capital – Enerplus Corp – slide 31
    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…
  32. FirstEnergy Capital – Enerplus Corp – slide 32
    Core Natural Gas Assets
  33. FirstEnergy Capital – Enerplus Corp – slide 33
    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.…
  34. FirstEnergy Capital – Enerplus Corp – slide 34
    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…
  35. FirstEnergy Capital – Enerplus Corp – slide 35
    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…
  36. FirstEnergy Capital – Enerplus Corp – slide 36
    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…
  37. FirstEnergy Capital – Enerplus Corp – slide 37
    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…
  38. FirstEnergy Capital – Enerplus Corp – slide 38
    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%…
  39. FirstEnergy Capital – Enerplus Corp – slide 39
    Operating Netback Marcellus increasing Q2 2013 US/Mcf contribution to corporate funds flow NYMEX* 4.09 Q2/13 net operating income Less basis differential (0.18) of 20 million Royalties & Impact Fee (23%) (0.76) Deteriorating basis…
  40. FirstEnergy Capital – Enerplus Corp – slide 40
    Marcellus Takeaway Capacity Majority of Enerplus production on Transco line continuing to shift additional Wyoming Pipeline volumes from Tennessee to Transco via Wyoming Pipeline Contracts to sell under must take/must deliver…
  41. FirstEnergy Capital – Enerplus Corp – slide 41
    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…
  42. FirstEnergy Capital – Enerplus Corp – slide 42
    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…
  43. FirstEnergy Capital – Enerplus Corp – slide 43
    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…
  44. FirstEnergy Capital – Enerplus Corp – slide 44
    Duvernay Shale Willesden Green Built land position within past 18 months - Key…
  45. FirstEnergy Capital – Enerplus Corp – slide 45
    Duvernay Shale Willesden Green Enerplus 45
  46. FirstEnergy Capital – Enerplus Corp – slide 46
    Supplemental Information
  47. FirstEnergy Capital – Enerplus Corp – slide 47
    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 47
  48. FirstEnergy Capital – Enerplus Corp – slide 48
    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 *…
  49. FirstEnergy Capital – Enerplus Corp – slide 49
    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…
  50. FirstEnergy Capital – Enerplus Corp – slide 50
    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…
  51. FirstEnergy Capital – Enerplus Corp – slide 51
    2013 & 2014 Funds Flow Protection Crude Oil Hedge Positions* Natural Gas Hedge Positions* (US/bbl) (/Mcf) 80% 70% 76% 70% 60% % of net after royalty production % of net after royalty production 60% 59% 50% 50% 40% 40%…
  52. FirstEnergy Capital – Enerplus Corp – slide 52
    Preserving our Financial Flexibility 2.0 Maintaining production guidance YE Debt: Est. YE Debt: 1,064 MM YE Debt*: despite the sale of 1,300 BOE/day 900 MM 1,155 MM of net production Debt to Funds Flow 1.5 Generated 137…
  53. FirstEnergy Capital – Enerplus Corp – slide 53
    2013 Capital Budget Sensitivities Est. effect on 2013 Sensitivities (as of Aug 27, 2013*) 2013 Funds Flow ( Million) Change of 5.00/bbl WTI crude oil 13 Change of 0.50/Mcf natural gas 16 Change of 1,000 BOE/day production 6…
  54. FirstEnergy Capital – Enerplus Corp – slide 54
    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)…
  55. FirstEnergy Capital – Enerplus Corp – slide 55
    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…
  56. FirstEnergy Capital – Enerplus Corp – slide 56
    Senior Notes Maturities* Average interest rate of 5.5%** 700 585 600 500 Millions 400 300 200 91 100 46 45 11 0 2013 2014 2015 2016 2017 2018 and beyond * As at June 30, 2013, US amounts converted at 1…
  57. FirstEnergy Capital – Enerplus Corp – slide 57
    Enerplus Share Ownership Investor Composition Geographic Composition Total Retail Total Institutional 67% 33% Canadian US/Intl Retail Institutional 19% 13% US & Other Canada 61% 39% Canadian US/Intl Retail Institutional 48%…
  58. FirstEnergy Capital – Enerplus Corp – slide 58
    Valuation Relative to Peers RBC Capital Markets research dated August 27, 2013. RBC Pricing Assumptions: WTI 2013 US96.00/bbl; Henry 58 Hub 2013 US3.82/Mcf; 2013 US/CDN0.970
  59. FirstEnergy Capital – 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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