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IPAA OGIS New York Energy Conference – Enerplus Corp

Enerplus Corp · Apr 17, 2013 · 52 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. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 1
    IPAA OGIS New York Energy Conference The Game Plan April 2013
  2. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 2
    Corporate Strategy Improve the profitability and sustainability of our business: Enhance our focus through disciplined return-based capital allocation and active management of asset portfolio Improve cost control and operational…
  3. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 3
    2013 Plans Improve capital efficiencies by reducing drilling and completion costs and improving operational execution Sell non-core assets to improve focus of portfolio, fund further portfolio development and preserve financial…
  4. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 4
    Financial Strength and Improving Sustainability Significant improvement in sustainability 230% with lower capital spending, improved costs and dividend reduction 210% 212% 190% Significant value creation from A&D activity has:…
  5. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 5
    Compelling Asset Portfolio Resource play focus with significant growth potential Crude Oil - Bakken IOR/EOR in mature oil assets Balanced portfolio of US Natural Gas - Marcellus oil and gas in both Canadian liquids rich natural…
  6. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 6
    2013 Capital Allocation Reduced capital spending by 20% Other 4% 75% directed to crude oil projects Continued focus in Fort Berthold, Cdn Gas 12% Canadian waterfloods and US Gas - Marcellus Marcellus 12% US Oil - Bakken Modest…
  7. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 7
    7 2013 Exit Guidance 2013 AA Guidance Q4 2012 Q3 2012 Oil and Liquids Production Liquids Q2 2012 Q1 2012 Crude Oil Q4 2011 Q3 2011 Q2 2011 Q1 2011 5 0 45 40 35 30 25 20 15 10 Delivering Organic…
  8. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 8
    Compelling Reserves Growth Total Reserves* Crude Oil Reserves* 7% growth in 2012 12% growth in 2012 400 225 346 MMBOE 350 200 192 MMbbl 322 MMBOE 306 MMBOE 175 171 MMbbl 300 150 MMbbl 150 250 47% 43% 40% MMBOE MMbbl…
  9. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 9
    Competitive Reserve Addition Costs Finding and Development Costs 2012 Highlights: 45 40 39.04 Continued trend of improving F&D 36.71 35 costs - down 8% in 2012 30 66% of reserve additions were from 26.26 24.21 oil properties…
  10. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 10
    Future Growth Potential US Crude Oil - Fort Berthold: Total contingent resources of 364 MMBOE 130 future net operated drilling locations to would more than double existing reserves support reserves and contingent resource 400 Canada…
  11. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 11
    Delivering Funds Flow Growth Funds flow driven by 25% increase in crude oil production from 2011 to 700 2013E 600 Expect funds flow growth and 500 improvement in adjusted payout ratio in 2013 400 Balance sheet remains strong 300…
  12. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 12
    2013 Cash Flow Protection Crude Oil Natural Gas Hedge Positions* Hedge Positions* 70% 70% 64% 60% 60% % of net after royalty production % of net after royalty production 50% 50% 40% 40% 34% 32% Hedged at 100.44/bbl…
  13. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 13
    Attractive Valuation Canadian U.S. Enerplus(2) Competitor Competitor Average(2) Average(3) (Range) (Range) 2013E Price/CF 4.6x 7.2x 6.3x (2.8x 10.4x) (3.8x 12.8x) 2013E EV Multiple(1) 6.3x 8.8x 7.3x (5.4 11.1x) (4.8x 13.7x)…
  14. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 14
    Why Enerplus Financial strength and improving sustainability Improving cost structures, capital efficiencies and focus Delivering attractive reserve, production and funds flow growth Compelling assets in Canada and U.S. Low decline…
  15. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 15
    Asset Review: Crude Oil
  16. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 16
    Top Tier Light Oil Play in North Dakota Current Operated and Non-Operated Locations Key Facts OOIP 17 22 MMbbls/1280 DSU Net Acreage (90% WI) 69,000 (108 sections) 2012 P+P Reserves 86.1 MMBOE 2012 Contingent Res. Est. 33.5 MMBOE…
  17. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 17
    Delivering Organic Oil Growth at Fort Berthold 2013 production expected to grow over 30% averaging 16,000 BOE/day Production growth of 18,000 120% in 2012 Expect to drill and complete 20 - 25 16,000 net wells 14,000 Over 90% of…
  18. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 18
    Cost Effective Reserves Growth at Fort Berthold Total 2P reserves have nearly quadrupled since 2010 at Fort Berthold 86.1 MMBOE at end of 2012, up 100,000 53% from YE 2011 90,000 80,000 Added 34.2 MMBOE of 70,000 reserves at…
  19. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 19
    Fort Berthold Long HZ Well Performance Well results in line with expectations 3 5 4 4 6 Early well performance 7 last year impacted by 9 experimentation in frac 11 15 1 design to reduce costs 17 22 19 Improved performance…
  20. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 20
    Fort Berthold Economics (long lateral wells) The range of EURs is dependant upon zone (Bakken or Three Forks) and well density. Budgeted Economics* (500 - 800 Mbbl EURs) Well Costs 12.9 million Projected IRR 17% 44% Break-Even Cost WTI…
  21. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 21
    Fort Berthold Well Spacing (1280 acres per drill spacing unit) 2P + CR (EUR) Potential Upside Bakken Middle Bakken Middle 800 800 Lower Bakken Lower Bakken Three Forks Three Forks 500 500 Estimated Recovery:…
  22. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 22
    Excess Takeaway Capacity in North Dakota 20% of our US Bakken production transported on rail in 2013, 80% through pipelines 10% is exposed to LLS pricing Forecast differentials of 12.00 in 2013 Excess takeaway capacity 22
  23. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 23
    Consolidating Ownership at Sleeping Giant Key Facts 2012 P+P Reserves 30.5 MMBOE 90% operated working interest Current Production 7,300 BOE/day Over 400 million barrels of original oil in place 90% Operated Working Interest 8%…
  24. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 24
    Focusing our Asset Portfolio: Sleeping Giant Purchase vs. Manitoba Asset Sale (Based on internal evaluations and pricing at time of transaction) Sleeping Giant Purchase Manitoba Sale Purchase Price [M] 118,000 218,000 Working Interest…
  25. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 25
    Low Decline Canadian Crude Oil Assets 22% of total production High working interest ownership of over 90% Significant free cash flow Over 1.2 billion barrels original oil in place with 22% recovered to date 60.3 million barrels of…
  26. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 26
    2013 Canadian Oil Capital Program 2013E Capital by Waterflood Prospect 2013E Capital Spend Allocation Other Med Hat Glauc C 13% 25% Plant & Facilities Pembina 5 Way 42% 9% Brooks 9% Drilling & Completions 58% Giltedge…
  27. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 27
    Defining the IOR/EOR Opportunity 2012 Contingent Resource 2013E Total YE 2P (MMBbl) 2013 Net Production OOIP (net) Recovered Reserves Total Operating Asset (BOE/day) (MMBbl) (MMBbl) (MMBOE) IOR EOR Total Recoverable Income Medicine…
  28. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 28
    Waterflood Success Story - Medicine Hat Glauc C Key Facts OOIP 224 MMBbls Recovery Factor to Date 9% Cumulative Production 19 MMBbls P+P Reserves (Dec 31, 2012) 21.1 MMBOE Best Estimate Contingent IOR 1.5 MMBOE Resource (Dec 31,…
  29. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 29
    Medicine Hat Glauc C Production 5,000 4,500 60% growth achieved over 4,000 5 years with 65% reinvestment Average Daily Production (BOE/day) 3,500 3,000 2,500 2,000 1,500 Implemented new waterflood development…
  30. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 30
    Asset Review: Natural Gas
  31. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 31
    Marcellus: Reduced Spending on Dry Gas Susquehanna/Wyoming Counties Bradford/Sullivan Counties 25% of 2013 Marcellus 40% of 2013 Marcellus capital budget capital budget Lycoming County 20% of 2013 Marcellus capital…
  32. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 32
    Delivering Growth in the Marcellus Production 70,000 100% growth in 2012 2013 annual production guidance of 65,000 60,000 Mcf/day (60% growth) 50,000 Exit 2013 guidance of 75 MMcf/day Mcf/day 40,000 30,000 Average production…
  33. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 33
    NE Pennsylvania Well Performance Wells in top tier acreage significantly outperforming type curve Susquehanna Bradford 8 Bcf E Lycoming 6 Bcf W Lycoming * Production data as of April 9, 2013 . Well counts shown are on a…
  34. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 34
    Marcellus Economics 50.00% 2.65 - 2.90/Mcf breakeven in Bradford & 45.00% Susquehanna with 10 11 Bcf type wells 40.00% 5 Gas 35.00% 30.00% Rate of Return 25.00% 4 Gas 20.00% 15.00% 10.00% 5.00% 3 Gas 0.00% 6 7 8…
  35. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 35
    An Abundance of Deep Gas Opportunity Montney 34,000 net acres of Approximately 188,000 net acres of undeveloped land, 100% WI high working interest land Significant potential in Wilrich, Duvernay and Montney Stacked Mannville…
  36. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 36
    Deep Gas Wilrich Key Facts Key properties Ansell, Minehead, Hanlan Net Acreage (acres) 54,000 acres (84 sections, majority 100% WI) Future HZ Drilling Over 100 Locations Est. EUR/Well 4.0 - 6.0 Bcfe 2012 Contingent Res. Est.…
  37. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 37
    Wilrich Positive Drilling Results 5.0 Bcf Well 6.0 Bcf Well 1,600 Pay NPV Pay NPV AECO IRR out 10% IRR out 10% (/Mcf) % (Yrs) (MM) % (Yrs) (MM) 1,400 1 Well Cumulative Production (MMcf) 2 Wells 4.00 54 1.8 6.5 67 1.6 8.6…
  38. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 38
    Duvernay: Emerging Top Quality Liquids-Rich Resource Play Key Facts Analogous rock characteristics to the Key Properties Willesden Green, AB Eagleford Net Acreage 83,000 acres (130 sections, Prolific over-pressured Devonian source 100%…
  39. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 39
    Duvernay Shale Willesden Green Enerplus 39
  40. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 40
    Montney Cameron/Julienne Creek Key Facts Key Properties Cameron/Julienne Creek Net Acreage 33,000 acres (+50 sections, 100% WI) Estimated OGIP 150 Bcf/section Future Hz Drilling 500+ Locations Est. EUR/Well 4.0 6.0 Bcfe…
  41. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 41
    Upper Montney Type Curve Economics 4.0 Bcf Well 5.0 Bcf Well 6.0 Bcf Well NPV NPV NPV AECO IRR Payout 10% IRR Payout 10% IRR Payout 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…
  42. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 42
    Supplemental Information The Game Plan
  43. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 43
    Corporate Profile Ticker Symbol (TSX & NYSE) ERF Enterprise Value(1) 3.9 billion Average Daily Trading Value (Q1 2013) 24 million 2013E Average Daily Production 82,000 85,000 BOE/day 2013E Exit Production 84,000 88,000 BOE/day…
  44. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 44
    Commitment to Dividend Model Capital markets place higher valuation on Investor Composition dividend paying energy companies As of January 31, 2013 Canadian energy yield companies trading at 2.2x EV/DACF and 2.2x 13% 19% cash flow…
  45. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 45
    Guidance Overview 2012 2013E Change Capital Expenditures (millions) 853 685 -20% Annual Average Production (BOE/day) 82,098 82,000 85,000 +2% Exit Production (BOE/day) 85,800 84,000 88,000 - Oil & Liquids Weighting 49% 50%…
  46. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 46
    2013 Capital Budget Pricing and Sensitivities 2013 Forward Prices as of Feb 7, 2013 Oil - WTI (US/bbl) 97.06 Gas NYMEX (US/Mcf) 3.51 Gas AECO (/Mcf) 3.13 2013 Sensitivities as of Feb 7, 2013* Est. effect on 2013 Funds Flow (…
  47. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 47
    Production Composition and Differentials 2013E Production 2013E Crude Oil Composition US Gas US Oil 16% 24% Canada Heavy 25% Canada Medium US Light 52% Canada Canada 12% Gas 34% Oil 22% Canada Light 11% NGLs 4% 2013…
  48. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 48
    Debt Composition Debt Maturities* 700 Senior Notes US742MM & 585 CAD70MM 600 500 Millions 400 300 Unutilized Capacity 200 739MM 91 100 46 46 45 0 Bank Debt 2013 2014 2015 2016 2017 2018 and 261MM beyond 1.1…
  49. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 49
    2012 Year End Analysis 2011 2012 Change Funds Flow 574 million 644 million +12% Adjusted Payout Ratio * 212% 174% -38% Debt to Funds Flow 1.6x 1.7x - Average Daily Production 75,332 BOE/day 82,098 BOE/day +9% Finding &…
  50. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 50
    Stock Dividend Program (SDP) Benefits: All shareholders are now eligible to participate Shareholders can elect to receive cash dividends or Enerplus shares 5% discount to current market price and no fees or commissions Participation…
  51. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 51
    Enerplus Share Ownership Investor Composition Geographic Composition Total Institutional 13% 31% Total Retail 19% 69% 18% 38% 62% 50% US/Intl Institutional Canadian Institutional US/Intl Retail Canada US and Other…
  52. IPAA OGIS New York Energy Conference – Enerplus Corp – slide 52
    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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