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Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp

Enerplus Corp · Oct 13, 2011 · 57 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. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 1
    Canaccord Genuity 2011 Global Energy Conference October 13, 2011 The Game Plan Robert Waters, Senior Vice President and Chief Financial Officer
  2. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 2
    Enerplus Overview North American oil and gas producer focused on providing growth and income Current yield of over 8% 10 15% production growth expected through 2012 Diversified portfolio of oil and gas properties throughout…
  3. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 3
    Our Assets Low decline, cash generating 45% oil assets & liquids 62% oil Growing land & liquids position in liquids rich region Significant growth potential in Bakken Oil and Marcellus 75% oil Shale Gas & liquids *…
  4. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 4
    Growth Potential Fort Berthold: 74,000 net acres Total contingent resources of over 500 MMBOE Growth potential of 20,000 BOE/day in 4 years is almost 2x existing booked reserves Additional upside potential in Three Forks…
  5. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 5
    Production Growth Production growth of 10 15% over next 2 years 5% debt-adjusted growth/year beyond 2012 Oil production increases by over 20% through 2012 4
  6. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 6
    Crude Oil
  7. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 7
    North Dakota Bakken & Three Forks Potential Key Facts Net Acreage 74,500 (116 sections) 2P Reserves (Dec. 31, 2010) 22.4 million BOE Bakken Contingent Resource 60 million BOE 90 drilling locations Upside potential from the Three…
  8. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 8
    Significant Future Production Growth from Fort Berthold Manageable growth, self-funding in 2 3 years Growth potential of 20,000 25,000 500 Capital 25,000 BOE/day by 2014 Net Op Income 20,000 Production 400 Over 1 billion of…
  9. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 9
    Economics are Exceeding Type Curve Long laterals are 30% ahead of the avg type well estimate Short laterals are 45% ahead of the avg type well estimate Long Laterals (9,000 ft. 24 frac stages), 8.7 MM/well Type Actual Curve 5 Well…
  10. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 10
    Natural Gas
  11. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 11
    Marcellus Shale Gas Overview 65,000 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%…
  12. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 12
    Future Production Growth in the Marcellus Sizeable resource capture provides opportunity for material development Current contingent resource 180 Capital 300 estimate of 2.3 Tcf Net Op Income (MM) 150 Production (Annual Average)…
  13. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 13
    Improving Marcellus Performance 90% of recent wells in the NE PA area are outperforming 6 Bcfe type curve NE PA Well Performance Nearly 60 gross wells on 1,400,000 production in NE Pennsylvania Cumulative Production (Mcf)…
  14. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 14
    Marcellus Well Economics 4.0 Bcf Well 5.0 Bcf Well 6.0 Bcf Well * Assumes long-run 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 2.51…
  15. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 15
    Summary
  16. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 16
    Positioned to Deliver Growth and Income High quality, diversified portfolio of low decline and growth potential assets Potential to double reserves through identified contingent resources in Bakken, Marcellus and Current yield of…
  17. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 17
    Supplemental Information The Game Plan
  18. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 18
    Attractive Valuation Enterprise Value* per BOE of Production Q2 2011 300,000 Peer Average: 98,074 250,000 EV/BOE/day 200,000 150,000 100,000 66,055 50,000 0 Talisman Ultra Bonavista Whiting…
  19. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 19
    Attractive Valuation Price to Cash Flow* per share 16 14 Peer Average: 7.0x P:CF per share 12 10 8 6.9x 6 4 2 0 Cabot Talisman EXCO Enerplus Brigham Range Pengrowth ARC…
  20. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 20
    Attractive Valuation Debt to Annualized Q2 Cash Flow* 3.0 Peer Average: 1.5x 2.5 2.0 D:CF 1.5 1.0 0.7 x 0.5 0.0 Continental Whiting Bonavista Penn West ARC Enerplus Southwestern Ultra…
  21. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 21
    Attractive Valuation Yield at October 5, 2011 16% Peer Average: 4.0% 14% 12% 10% 8.6% % Yield 8% 6% 4% 2% 0% Continental Whiting Bonavista Brigham Southwestern Ultra Vermillion Penn…
  22. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 22
    Corporate Profile Enterprise Value (1) 5.0 billion Average Daily Trading Value (Q3 2011) 43.5 million 2011 Average Daily Production Guidance 76,000 78,000 BOE/day 2011 Exit Production Guidance 81,000 84,000 BOE/day Oil and…
  23. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 23
    Q2 Results Impacted By Weather, But Still On Track Production of 75,383 BOE/day, held at Q1 2011 level 145 million capital spending severe weather delayed execution of drilling programs Closed sale of a portion of our non-operated…
  24. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 24
    Revised 2011 Guidance Adjusted for Marcellus sale and impact of weather delays Increasing capital spending replacing exit volumes and building incremental production in 2012 Inflation, weather impacts in H1 2011 and increased costs…
  25. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 25
    Hedging The following is a summary of the financial contracts in place at July 27, 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…
  26. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 26
    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…
  27. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 27
    Supplemental Bakken Information
  28. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 28
    Fort Berthold Drilling Strategy 4 rigs currently under contract: 2 walking rigs for 2 years 2 conventional rigs through Q4 2011 and Q1 2012 Service contracts in place support execution Frac services and proppant agreements 2011…
  29. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 29
    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…
  30. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 30
    Well Timelines 7 10 months Well application / permit Site Build Drilling Completion approval 4 - 6 months 1 - 2 months 1 month/well 1 month Environmental assessment Cannot begin Multi-well pads Have secured 42 required on…
  31. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 31
    Enerplus Well Design Methodology Typical rigs are 1,000 1,600 hp with top drive to improve performance; 2 of the rigs in the fleet are self moving (walkers) Measured depth of horizontal wells are 20,000 (TVD 10,700) and drill in…
  32. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 32
    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…
  33. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 33
    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 -…
  34. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 34
    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 500,000 Enbridge Bakken 60k 500…
  35. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 35
    Supplemental Waterflood Information
  36. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 36
    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…
  37. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 37
    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 &…
  38. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 38
    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…
  39. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 39
    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…
  40. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 40
    Giltedge EOR Project Area Key Facts OOIP 126 MMBOE Recovery Factor to Date 13% Polymer Cumulative Production 16.4 MMBOE Project Area P+P Reserves (Dec 31, 2010) 10.4 MMBOE (booked to 21%) Best Est. Contingent Resource 16.6 MMBOE…
  41. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 41
    Giltedge Production Production growth potential through EOR/polymer project 3000 2500 2000 Oil Production (BOE/day) 1500 1000 Expected Production Response from Polymer project (BOE/day) 500 Pool Base Production…
  42. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 42
    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 1,900 BOE/day…
  43. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 43
    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.…
  44. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 44
    Freda Lake Ratcliffe Unit Production Up to 14 more HZ wells to drill in the unit 7 HZ wells drilled increased production from 500 BOE/day to over 1,300 BOE/day at year-end 43
  45. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 45
    Supplemental Marcellus Information
  46. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 46
    2011 Marcellus Plans 2011 capital program of 195 Non-operated activity focused in NE PA region: EXCO currently running 3 rigs with all activity focused in Lycoming County Over 40% Chief continue to run 3 rigs with activity…
  47. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 47
    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…
  48. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 48
    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…
  49. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 49
    Supplemental Deep Basin Information
  50. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 50
    Liquids Rich Natural Gas Large, long tenure, high working interest land holdings Montney Potential 33,000 net acres of undeveloped land Over 110,000 net acres of high working interest Duvernay Potential undeveloped land with…
  51. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 51
    Stacked Mannville Geology Stacked cretaceous horizons provide vertical risk mitigation and multiple horizontal targets Cardium Notikewin Wilrich Bluesky Gething Cadomin * Indicative geologic section 50
  52. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 52
    Stacked Mannville Key Facts Key properties Pine Creek to Hanlan Net Acreage (acres) 60,000 total (42,000 undeveloped) Future HZ Drilling Locations 100 - 200 Expected EUR/Well* 2.8 - 4.0 Bcfe Acquiring and utilizing 3D…
  53. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 53
    Montney b-66-B well Pink Mountain Mntn Licenses Key Facts 94-G-2 Mntn Production Key Properties Cameron / ERF Well License Julienne Creek ERF 3D Seismic Net Acreage (acres) 33,000 Future Hz Drilling Locations 50 150 Enerplus…
  54. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 54
    Stacked Mannville Type Curve Economics Target Cadomin + 1 up hole completion Bluesky or Wilrich Raw gas 2.8 Bcf Well 4.0 Bcf Well recovered AECO Payout NPV 12% Payout NPV 12% (/Mcf) IRR% (Years) (MM) IRR% (Years) (MM) 6.00 30…
  55. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 55
    Montney Type Curve Economics 3.5 Bcf Well 4.5 Bcf Well 5.5 Bcf Well NPV NPV NPV AECO IRR Payout 12% IRR Payout 12% IRR Payout 12% (/Mcf) % (Years) (MM) % (Years) (MM) % (Years) (MM) 6.00 27 2.7 2.1 45 1.8 3.9 64 1.4 5.7 5.00 18…
  56. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 56
    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…
  57. Canaccord Genuity 2011 Global Energy Conference – Enerplus Corp – slide 57
    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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