2011 Annual General Meeting of Shareholders The Game Plan Gordon J. Kerr, President and CEO
Enerplus Overview High-yielding North American energy producer Focused on providing both growth and income to investors Diversified asset base of high quality, low decline oil Monthly and gas assets complemented by growth assets…
Corporate Profile Enterprise Value (1) 6.1 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 Liquids…
Dividend Philosophy Demand for yield supported by Enerplus current investor base, demographics and low interest rate environment We will Imposes capital discipline and appropriate pace of continue to development share our cash…
Significant Portfolio Repositioning Our goal was to improve the focus and profitability of our portfolio Added over Build core growth areas that would have scope and 500,000 net new scale: acres of Light Crude Oil: undeveloped…
Our Assets Tight Gas/Shallow Gas 2010 Divestments Capital Spending: Sold 10,400 BOE/day non-core assets 60 MM tight gas 870 MM in proceeds 10 MM shallow gas 115 properties 39% of production Average netback 28/BOE 19% of NOI Op cost…
Current Reserves Breakdown 53% Oil and NGLs Over 50% of reserves are from key resource plays Oil weighting is now 53% of 306.2 MMBOE total reserves 350 P+P Reserves PDP reserves - 62% 300 19% Bakken Oil Proved reserves - 72%…
Added Meaningful Upside Potential Marcellus, North Dakota Bakken and waterflood contingent P+P Best Estimate resource is 3.5x current P+P Crude Reserves Contingent reserves 161 Resources* Oil MMBOE 120 MMBOE Significant future…
We Can Deliver Growth 1.3 billion in capital spending over next 2 years Production growth of 10 - 15% Cash flow growth as a result of higher production volumes and oil weighting Production Capital increases by 20% to 650 million in…
2011 Capital Focus 2010 Exit 2011E Capital of Net Production Exit Production Change Resource Play (MM) Wells (MBOE/day) (MBOE/day) Exit to Exit IRR** BESC** Bakken/Tight Oil 300 48 13.3 18 21 35 55% 40% 40 55/bbl Waterfloods 110 29…
Production Outlook Growing Oil Increased oil spending results 100 in oil and liquids production 90 approaching 50% 80 Oil production is +80% weighted to light/medium 70 Bakken grades 60 Marcellus MMBOE/day 50 Waterfloods…
Financial Outlook Cash Flow Estimates 2011 and 2012 cash flow is 900 Oil 180% approximately 70% Gas weighted to liquids, up from 800 Adjusted Payout Ratio 160% approximately 65% in 2010 700 140% Balance sheet supports 600…
Managing the Balance Sheet Potential Funding Sources 2.5x Equity portfolio interests with 2.0x book value of 150 million 2.0x Laricina 4.3 million shares Debt to Cash Flow Ratio 1.5x Non-core conventional and oil 1.2x sands…
First Quarter on Track Q1 2011 production of 75,483 BOE/day in-line with expectations 44% weighted to crude oil and liquids Invested 174 in capital spending on our assets 80% spent in U.S. Bakken, waterfloods, and Marcellus shale…
Crude Oil
U.S. Bakken Regional Overview Enerplus: Sleeping Giant Enerplus: Ft Berthold Source: RSEG, Apr 2011 15
Fort Berthold Reserves vs. Contingent Resource Almost 3x P+P 22.4 MMBOE P+P reserves 70 reserve upside 24 booked drilling locations 60 Less than 1 years drilling locations 50 60 MMBOE of best estimate contingent resource from the…
Fort Berthold, North Dakota Key Facts Net Acreage 74,500 (116 sections) Current Production 4,500 BOE/day P+P Reserves (Dec. 31, 2010) 22.4 million BOE Contingent Resource Est. (Best) 60 million BOE Bakken & Three Forks…
Fort Berthold Bakken Results to Date Long Laterals Short Laterals (9,000 ft. 24 frac stages) (4,500 ft. 12 frac stages) Type Actual Type Actual Curve 5 Well avg Curve 6 Well avg Average 30 day initial production (bbls/day) 1,100…
Fort Berthold Results Long laterals are 30% ahead of the average type well prediction Short laterals are 45% ahead of the average type well prediction Actual Long Bakken Laterals (5 Wells) 160,000 Actual Short Bakken Laterals (6…
2011 Fort Berthold Bakken Plans 2011 capital program - 230 million 32 net operated wells, 75% long horizontals Targeting Bakken primarily; 3 to 8 Three Forks wells planned Production Moving 2 rigs into region in Q2 grows from…
Significant Future Production Growth from Fort Berthold Manageable growth, self-funding in 1 2 years 30,000 600 Growth potential of Production assuming 4 rigs Incremental production - 4 to 6 rigs 20,000 25,000 BOE/day 25,000…
Waterfloods Key Facts OOIP 1.3 billion BOE 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 Reserves vs. Contingent Resource Upside Over 70% upside to P+P reserves 90 83.7 MMBOE P+P reserves 80 45 booked drilling locations 70 60.5 No reserves booked associated 60 with EOR pilots MMBOE 50 60.5 MMBOE of…
Waterflood Development Plans 2011 Plans - 110 million Invest to maintain production while Drilling 29 wells and advancing two setting up future opportunity polymer pilots 2011 Reviewing all major waterflood Capital properties for…
Natural Gas
Marcellus Shale Gas Overview Current land position of + 200,000 net acres 10% of 2011 spending 70,000 net operated acres with an Typical EUR of 4.0 Bcf average working interest of 90% Long operated lease tenure at attractive…
Marcellus Potential Contingent Resource Est. 2009 2010 Planned Operated - 1.2 Tcfe production Non-Operated 2.1 Tcfe 2.7 Tcfe growth of over Total 2.1 Tcfe 3.9 Tcfe 150 MMcf/day of Net Locations 639 926 over next 4 Land Utilization…
Marcellus Performance Cumulative Type curve estimates have been increased as well results have either met or exceeded our expectations. 25% of wells are above 6 Bcfe type curve 6.0 Bcfe Type Curve 1,400,000 3.5 Bcfe Type Curve Top…
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…
Marcellus Drilling Activity To Date* Gross Wells Drilled (at May 5, 2011) Horizontal Vertical Total Producing 45 9 54 Partially Drilled** 3 1 4 Waiting on Completion 50 3 53 Waiting on Pipeline 13 9 22 Total Gross Wells 111 22…
2011 Marcellus Plans 2011 capital program of 160 million 150 gross wells planned (22.4 net) Operated : 5 gross wells, 1 rig Non-Operated: 145 gross wells, 8 - 10 rigs Expect to complete 121 gross wells with 94 new gross wells on…
Future Production Growth in the Marcellus (unconstrained) Full scale development not planned. Sizeable resource capture provides opportunity for material development even if we sell a portion of acreage 1,200 350 Production Under…
Deep Basin Opportunity Approximately 80,000 net acres of high working interest Montney Potential land in the Deep Basin 20,000 net acres of Includes 100% working undeveloped land interest in approximately 60,000 undeveloped acres…
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 Shorter-term focus on…
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 Target total Build…
Supplemental Information The Game Plan
2011 Guidance 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 Assumes 650 million development capital spending 2011 production mix 53% gas,…
2011 Annual Production Outlook 2011 Production Profile Cycle times at Fort 86,000 Berthold and Marcellus Range of production influencing production 84,000 build throughout year and 82,000 resulting production ranges BOE/day…
Cash Flow Sensitivity The sensitivities below reflect all commodity contracts and forward markets as at May 9, 2011. To the extent the market price of crude oil and natural gas change significantly from current levels, the sensitivities…
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,…
Reserves and Contingent Resources Proved plus Future Probable Best Contingent Proved plus Booked Estimate Resource Probable Net Drilling Contingent Drilling Play Types Proved Reserves Locations Resources locations Bakken/Tight Oil…
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…
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…
Fort Berthold Development Plans 1280 acres B TF B TF Maximize long horizontals Develop from pads: 2 Bakken/2 Three Forks 1320 1320 1320 Tie in as soon as possible Test inter-well spacing Work with other operators to time…
Fort Berthold Well Timeline 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 Multi-well…
Fort Berthold Well Costs Long Laterals Short Laterals Drilling 2.8 MM Drilling 2.4 MM Completion Completion 5.7 MM 3.3 MM Total Cost 8.5 MM Total Cost 5.7 MM Completions - 125,000 lbs of proppant/stage, 1.3 - 1.5 MM for…
Fort Berthold Execution Capability 5 rigs under contract 2 walkers focused on pad drilling 5th rig will be available by September Frac services: Multi-year frac services agreement signed should keep pace with 3 4 rig program…
Fort Berthold Production - Gathering 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 provide flexible…
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…
Fort Berthold Production Enerplus Regional Transportation Current Transportation / Sales Arrangements in Place for Fort Berthold Development 25 25 Middle Pace (6 Rigs) Basic 4 Rig Program 20 20 / day bbls/day 15 15…
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 61
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…
Gathering Gas in the Marcellus NE PA Central PA South PA SW PA & WV Susquehanna, Bradford, Clearfield, Cambria, Somerset, Marshall, Sullivan, Lycoming Clinton, Centre Fayette, Indiana Green PA Midstream Party Chief Midstream Caiman/…
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 ERF developing…
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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