Enercom 2011 Oil and Gas Conference August 16, 2011 The Game Plan Gordon J. Kerr, President and Chief Executive Officer
Enerplus Overview North American oil and gas producer focused on providing growth and income Current yield of 8% 10 15% production growth expected through 2012 Diversified portfolio of oil and gas properties throughout High…
Corporate Profile Enterprise Value (1) 5.3 billion Average Daily Trading Value (Q2 2011) 41 million 2011 Average Daily Production Guidance 76,000 78,000 BOE/day 2011 Exit Production Guidance 81,000 84,000 BOE/day Oil and…
Our Assets Production* 5% 18% Low decline, 20% cash generating 45% oil assets & liquids 18% 39% Capital* 2% 13% 25% 18% 62% oil Growing land & liquids position in liquids rich region 42% Net Operating…
Growth Potential Fort Berthold: 74,000 net acres of undeveloped land Total contingent resources of over 500 MMBOE is almost 2x existing booked reserves Growth potential of 20,000 BOE/day in 4 years Additional upside potential in…
Production Outlook Production growth of 10 15% 100 90 over next 2 years 80 5% debt-adjusted growth/year 70 beyond 2012 Oil Oil Oil Oil Oil 60 45% 50% 50 43% 47% 48% Oil production increases by 40 over 20% through 2012…
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…
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…
Crude Oil
U.S. Bakken Overview Strategic asset for near-term production and cash flow growth Potential for Economics are some of the best in our 300% production portfolio early results point to repeatability growth within next RORs at 60…
Significant Future Production Growth from Fort Berthold Manageable growth, self-funding in 1 2 years Growth potential of 20,000 25,000 500 Production assuming 4 rigs 25,000 BOE/day by 2014 20,000 Capital required - 4 rigs 400…
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 Est. (Best) 90 drilling locations Concentrated acreage…
Economics are Exceeding Type Curve Long laterals are 30% ahead of the avg type well prediction Short laterals are 45% ahead of the avg type well prediction Long Laterals (9,000 ft. 24 frac stages), 8.5 MM/well Type Actual 2 longs…
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…
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…
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…
Giltedge Production History Production maintained over last decade 3000 2500 2000 Oil Production (BOE/day) 1500 1000 Expected Production Response from Polymer project (BOE/day) 500 Pool Base Production (BOE/day)…
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 150 MMcf/day EUR estimates range from 4.5 to 6.0 Bcf…
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%…
Improving Marcellus Performance NE PA Well Performance 90% of recent wells in the NE PA area are outperforming 6 Bcfe 1,400,000 type curve Cumulative Production (Mcfe) 1,200,000 Nearly 60 gross wells on 1,000,000 production…
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…
2011 Marcellus Plans 2011 capital program of 195 Non-operated activity focused in NE PA region: EXCO currently running 3 rigs, expect to increase to 5 rigs in Q1 of 2012 with all activity Over 40% focused in Lycoming County Chief…
Future Production Growth in the Marcellus Sizeable resource capture provides opportunity for material development 180 Production 300 Production of 150 MMcf/day 150 Capital 250 by end of 2014 Free Cash Flow (NOI - Capex) 120 200…
Liquids Rich Natural Gas Over 100,000 net acres of Montney Potential high working interest 28,000 net acres of undeveloped land with liquids undeveloped land rich gas potential Recently acquired 38,000 net acres in Duvernay…
Summary
Attractive Valuation Enterprise Value* per BOE of Production Q2 2011 300,000 Peer Average: 105,257 250,000 EV/BOE/day 200,000 150,000 100,000 70,325 50,000 0 Continental Southwestern EXCO Penn West…
Positioned for Growth High quality, diversified asset base with significant potential Potential to double reserves through identified contingent resources in Bakken, Marcellus and Current yield of waterfloods 8% with a Near-term…
Supplemental Information The Game Plan
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…
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 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…
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…
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 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…
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
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…
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…
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…
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 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…
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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