All amounts in this news release are presented in
United States dollars unless
otherwise specified. All financial information contained within
this news release has been prepared in accordance with U.S. GAAP.
Production information, unless otherwise stated, is presented on a
net basis (after deduction of royalty obligations). This news
release includes forward-looking statements and information within
the meaning of applicable securities laws. Readers are advised to
review the "Forward-Looking Information and Statements" at the
conclusion of this news release. Readers are also referred to
"Notice Regarding Information Contained in this News
Release" and "Non-GAAP and Other Financial Measures" at the end of
this news release for information regarding the presentation of the
financial and operational information in this news release, as well
as the use of certain financial measures that do not have standard
meaning under U.S. GAAP. A copy of Enerplus' first quarter 2023 and
annual 2022 Financial Statements and associated MD&A are or
will be available on our website at www.enerplus.com, under our
profile on SEDAR at www.sedar.com and on the EDGAR website at
www.sec.gov.
CALGARY,
AB, May 4, 2023 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX: ERF) (NYSE: ERF) today
announced financial and operating results for the first quarter of
2023. The Company reported first quarter 2023 cash flow from
operating activities and adjusted funds flow of $241.4 million and $260.4
million, respectively, compared to $196.0 million and $261.9
million, respectively, in the first quarter of 2022. Cash
flow from operating activities increased from the prior year period
primarily due to changes in non-cash working capital.
HIGHLIGHTS
- Adjusted funds flow was $260.4
million in the first quarter, which exceeded capital
spending of $138.6 million,
generating free cash flow(1) of $121.8 million
- Returned $66.6 million to
shareholders through dividends and share repurchases in the first
quarter; planning to return at least 60% of full-year 2023 free
cash flow to shareholders (as previously indicated)
- Expect to complete remaining share repurchases of 3.3 million
shares by end of July 2023, and renew
normal course issuer bid for 10% of shares outstanding in
August 2023, based on current market
conditions
- Reduced net debt by 32% from year-end 2022, ending the quarter
with net debt of $150.6 million
- First quarter production averaged 97.7 MBOE per day, including
56.7 Mbbl per day of liquids
- Production per share increased by 19% in the first quarter of
2023 compared to the same period in 2022
(1)
|
This is a non-GAAP
financial measure. Refer to "Non-GAAP and Other Financial Measures"
section for more information.
|
"Our strong operating performance has continued through the
first quarter of 2023," said Ian C.
Dundas, President and CEO. "We remain on track to
efficiently execute our capital program which is designed to
generate attractive free cash flow and deliver profitable growth.
Priorities for free cash flow will continue to be focused on
returning capital to shareholders and reinforcing the balance
sheet."
FIRST QUARTER SUMMARY
Production in the first quarter of 2023 was 97,652 BOE per day,
an increase of 6% compared to the same period a year ago, and 9%
lower than the prior quarter. Crude oil and natural gas
liquids production in the first quarter of 2023 was 56,734 barrels
per day, in line with the same period a year ago, and 13% lower
than the prior quarter. The higher production compared to the same
period in 2022 was driven by the Company's 2022 development plan
and strong well performance in North
Dakota and the Marcellus. The lower production compared to
the prior quarter was due to the planned sequencing of the
Company's completions program in North
Dakota with no operated wells brought online between
mid-October 2022 and mid-February 2023. The sale of substantially all
of Enerplus' Canadian assets in the fourth quarter of 2022 with
associated production of 6,400 BOE per day (78% liquids) also
contributed to the lower production in the first quarter of 2023
compared to the prior quarter.
Enerplus reported first quarter 2023 net income of $137.5 million, or $0.63 per share (basic), compared to net income
of $33.2 million, or $0.14 per share (basic), in the same period in
2022. Excluding certain non-cash or non-recurring items, adjusted
net income(1) for the first quarter of 2023 was
$140.7 million, or $0.65 per share (basic), compared to $145.8 million, or $0.60 per share (basic), during the same period
in 2022. First quarter 2023 net income was higher than the prior
year period primarily due to a gain in commodity derivative
instruments compared to a commodity derivative instrument loss in
the prior year quarter.
Enerplus' first quarter 2023 realized Bakken oil price
differential was $0.06 per barrel
above WTI, compared to $0.35 per
barrel below WTI in the first quarter of 2022. Enerplus is revising
its 2023 Bakken crude oil price differential guidance to
$0.50 per barrel above WTI, from
$0.75 per barrel above WTI
previously, reflecting the slightly weaker than expected pricing in
the first quarter.
The Company's realized Marcellus natural gas price differential
was $0.64 per Mcf below NYMEX during
the first quarter of 2023, compared to $0.01 per Mcf above NYMEX in the first quarter of
2022. Enerplus expects its Marcellus differential to remain
supported during spring and into summer due to a flat outlook on
natural gas supply growth and weaker NYMEX pricing. As a result,
Enerplus is maintaining its annual Marcellus differential guidance
of $0.75 per Mcf below NYMEX.
Operating expenses were $10.56 per
BOE in the first quarter of 2023, compared to $10.03 per BOE during the first quarter of 2022.
The increase in per unit operating expenses compared to the prior
year period was due to inflation adjusted contract pricing,
increased gas processing volumes due to improved capture rates, and
higher planned well service activity.
Current tax expense was $11.0
million in the first quarter.
Capital spending totaled $138.6
million in the first quarter of 2023. The Company paid
$12.0 million in dividends in the
quarter and repurchased approximately 3.5 million shares at an
average price of $15.37 per share,
for total consideration of $54.6
million. Subsequent to March 31,
2023, and up to and including May 3,
2023, Enerplus repurchased 1.1 million shares at an average
price of $14.81 per share, for total
consideration of $16.0 million.
Enerplus ended the first quarter of 2023 with total debt of
$203.2 million and cash of
$52.6 million. Enerplus was undrawn
on its $1.3 billion credit
facilities.
(1)
|
This is a non-GAAP
financial measure. Refer to "Non-GAAP and Other Financial Measures"
section for more information.
|
OPERATIONS
North Dakota production
averaged 66,656 BOE per day during the first quarter of 2023, an
increase of 16% compared to the same period a year ago.
North Dakota production was 8%
lower than the prior quarter due to the planned sequencing of the
Company's completions program. During the first quarter, Enerplus
drilled 14 gross operated wells (86% average working interest) and
brought four gross operated wells (75% working interest) on
production in North Dakota. In the
second quarter, Enerplus expects to bring approximately 19 – 22 net
operated wells on production in North
Dakota, including 3 – 5 net refracs. The Company is
continuing to operate two drilling rigs throughout 2023.
Marcellus production averaged 180 MMcf per day during the first
quarter of 2023, approximately 11% higher than the same period in
2022 and approximately flat to the prior quarter.
RETURN OF CAPITAL TO SHAREHOLDERS
Enerplus remains committed to returning at least 60% of free
cash flow generated in 2023 to shareholders through dividends and
share repurchases. Based on current market conditions, the Company
expects to continue to prioritize share repurchases for the
majority of its return of capital plan and intends to complete
share repurchases under its remaining normal course issuer bid
("NCIB") by the end of July 2023. Enerplus expects to renew
its NCIB in August 2023 for another
10% of the public float (within the meaning under the TSX
rules).
As at May 3, 2023, Enerplus had
3.3 million shares remaining under its NCIB.
Enerplus announced a quarterly cash dividend of $0.055 per share payable on June 15, 2023 to shareholders of record on
May 31, 2023.
2023 UPDATED GUIDANCE
Enerplus' current 2023 guidance is summarized below. The Company
has updated guidance for its Bakken oil price differential to
$0.50 per barrel above WTI (from
$0.75 per barrel above WTI),
production tax of 7% to 8% (from 7%), and transportation expense to
$4.20 per BOE (from $4.35 per BOE). All other guidance remains
unchanged.
2023 Guidance Summary
|
Guidance
|
Capital
spending
|
$500 – 550
million
|
Average total
production
|
93,000 – 98,000
BOE/day
|
Average liquids
production
|
57,000 – 61,000
bbls/day
|
Average production tax
rate
(% of net sales, before
transportation)
|
7 – 8% (from
7%)
|
Operating
expense
|
$10.75
– 11.75/BOE
|
Transportation
expense
|
$4.20/BOE (from
$4.35/BOE)
|
Cash G&A
expense
|
$1.35/BOE
|
Current tax
expense
|
5 – 6% of adjusted
funds flow, before tax
|
2023 Differential/Basis Outlook(1)
|
Guidance
|
U.S. Bakken crude oil
differential
(compared to WTI crude
oil)
|
$0.50/bbl (from
$0.75/bbl)
|
Marcellus natural gas
sales price differential
(compared to NYMEX
natural gas)
|
$(0.75)/Mcf
|
(1)
|
Excluding
transportation costs.
|
Q1 2023 Conference Call Details
A conference call hosted by Ian C.
Dundas, President and CEO will be held at 9:00 AM MT (11:00 AM
ET) on May 5, 2023, to discuss
these results. Details of the conference call are as follows:
Date: Friday, May 5,
2023
Time: 9:00 AM MT (11:00 AM ET)
Audiocast: https://app.webinar.net/JmYbPKNEKpo
To immediately join the conference call by phone, without
operator assistance, please use the following URL to register and
be connected into the conference call by automated call back:
https://emportal.ink/3LP3OCW.
To join the call from a live operator managed queue, please dial
1-888-390-0546 (Toll Free) using conference ID 00849157.
To ensure timely participation in the conference call, callers
are encouraged to join 15 minutes prior to the start time to
register for the event. A telephone replay will be available for 30
days following the conference call and can be accessed at the
following numbers:
Replay
Dial-In:
|
1-888-390-0541
(Toll Free)
|
Replay
Passcode:
|
849157 #
|
PRICE RISK MANAGEMENT
The following is a summary of Enerplus' financial commodity
hedging contracts at May 3, 2023.
|
|
|
|
|
|
|
|
|
WTI Crude Oil
($/bbl)(1)(2)
|
|
NYMEX Natural Gas
($/Mcf)(2)
|
|
|
Apr 1,
2023 –
|
|
Jul 1,
2023 –
|
|
Apr 1, 2023
–
|
|
|
Jun 30,
2023
|
|
Dec 31,
2023
|
|
Oct
31, 2023
|
Swaps
|
|
|
|
|
|
|
Volume
(bbls/day)
|
|
10,000
|
|
10,000
|
|
–
|
Brent - WTI
Spread
|
|
$ 5.47
|
|
$ 5.47
|
|
–
|
|
|
|
|
|
|
|
3 Way
Collars
|
|
|
|
|
|
|
Volume
(bbls/day)
|
|
15,000
|
|
5,000
|
|
–
|
Sold Puts
|
|
$ 61.67
|
|
$ 65.00
|
|
–
|
Purchased
Puts
|
|
$ 79.33
|
|
$ 85.00
|
|
–
|
Sold Calls
|
|
$ 114.31
|
|
$ 128.16
|
|
–
|
|
|
|
|
|
|
|
Collars
|
|
|
|
|
|
|
Volume
(Mcf/day)
|
|
–
|
|
–
|
|
50,000
|
Volume
(bbls/day)(3)
|
|
2,000
|
|
2,000
|
|
–
|
Purchased
Puts
|
|
$ 5.00
|
|
$ 5.00
|
|
$ 4.05
|
Sold Calls
|
|
$ 75.00
|
|
$ 75.00
|
|
$ 7.00
|
(1)
|
The total average
deferred premium spent on outstanding crude oil contracts is
$1.32/bbl from April 1, 2023 - June 30, 2023 and $1.07/bbl from
July 1, 2023 - December 31, 2023.
|
(2)
|
Transactions with a
common term have been aggregated and presented at weighted average
prices and volumes.
|
(3)
|
Outstanding commodity
derivative instruments acquired as part of the Bruin Acquisition
completed in 2021.
|
FIRST QUARTER 2023 PRODUCTION AND OPERATIONAL SUMMARY
TABLES
Summary of Average Daily
Production(1)
|
Three months ended
March 31, 2023
|
|
Williston
Basin
|
Marcellus
|
Other(2)
|
Total
|
Tight oil
(bbl/d)
|
46,625
|
-
|
743
|
47,369
|
Light & medium oil
(bbl/d)
|
-
|
-
|
-
|
-
|
Heavy oil
(bbl/d)
|
-
|
-
|
-
|
-
|
Total crude oil
(bbl/d)
|
46,625
|
-
|
743
|
47,369
|
|
|
|
|
|
Natural gas liquids
(bbl/d)
|
9,276
|
-
|
89
|
9,365
|
|
|
|
|
|
Shale gas
(Mcf/d)
|
64,531
|
180,184
|
793
|
245,509
|
Conventional natural
gas (Mcf/d)
|
-
|
-
|
-
|
-
|
Total natural gas
(Mcf/d)
|
64,531
|
180,184
|
793
|
245,509
|
|
|
|
|
|
Total production
(BOE/d)
|
66,656
|
30,031
|
964
|
97,652
|
(1)
|
Table may not add due
to rounding.
|
(2)
|
Primarily DJ
Basin.
|
Summary of Wells Drilled(1)
|
Three months ended
March 31, 2023
|
|
|
Operated
|
|
Non-Operated
|
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Williston
Basin
|
14
|
12.0
|
|
18
|
1.5
|
|
Marcellus
|
-
|
-
|
|
12
|
0.2
|
|
DJ Basin
|
2
|
2.0
|
|
-
|
-
|
|
Total
|
16
|
14.0
|
|
30
|
1.7
|
|
(1)
|
Table may not add due
to rounding.
|
Summary of Wells Brought On-Stream(1)
|
Three months ended
March 31, 2023
|
|
|
Operated
|
|
Non-Operated
|
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Williston
Basin
|
4
|
3.0
|
|
3
|
0.1
|
|
Marcellus
|
-
|
-
|
|
13
|
0.2
|
|
DJ Basin
|
-
|
-
|
|
-
|
-
|
|
Total
|
4
|
3.0
|
|
16
|
0.3
|
|
(1)
|
Table may not add due
to rounding.
|
|
|
|
|
|
|
|
SELECTED FINANCIAL
RESULTS
|
|
Three months
ended
March 31,
|
|
|
2023
|
|
2022
|
Financial (US$,
thousands, except ratios)
|
|
|
|
|
|
|
Net
Income/(Loss)
|
|
$
|
137,486
|
|
$
|
33,243
|
Adjusted Net
Income/(Loss)(1)
|
|
|
140,729
|
|
|
145,828
|
Cash Flow from
Operating Activities
|
|
|
241,401
|
|
|
195,992
|
Adjusted Funds
Flow(1)
|
|
|
260,409
|
|
|
261,895
|
Dividends to
Shareholders - Declared
|
|
|
11,993
|
|
|
7,918
|
Net Debt
|
|
|
150,622
|
|
|
572,271
|
Capital
Spending
|
|
|
138,648
|
|
|
99,013
|
Property and Land
Acquisitions
|
|
|
1,748
|
|
|
1,941
|
Property and Land
Divestments
|
|
|
233
|
|
|
6,581
|
Net Debt to Adjusted
Funds Flow Ratio(1)
|
|
|
0.1x
|
|
|
0.7x
|
|
|
|
|
|
|
|
Financial per
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
Net Income /(Loss) -
Basic
|
|
$
|
0.63
|
|
$
|
0.14
|
Net Income/(Loss) -
Diluted
|
|
|
0.62
|
|
|
0.13
|
Weighted Average Number
of Shares Outstanding (000's) - Basic
|
|
|
216,806
|
|
|
242,787
|
Weighted Average Number
of Shares Outstanding (000's) - Diluted
|
|
|
222,927
|
|
|
249,337
|
|
|
|
|
|
|
|
Selected Financial
Results per BOE(2)(3)
|
|
|
|
|
|
|
Crude Oil & Natural
Gas Sales(4)
|
|
$
|
47.02
|
|
$
|
61.84
|
Commodity Derivative
Instruments
|
|
|
3.90
|
|
|
(8.81)
|
Operating
Expenses
|
|
|
(10.56)
|
|
|
(10.03)
|
Transportation
Costs
|
|
|
(4.30)
|
|
|
(4.32)
|
Production
Taxes
|
|
|
(3.43)
|
|
|
(4.26)
|
General and
Administrative Expenses
|
|
|
(1.48)
|
|
|
(1.35)
|
Cash Share-Based
Compensation
|
|
|
0.10
|
|
|
(0.25)
|
Interest, Foreign
Exchange and Other Expenses
|
|
|
(0.37)
|
|
|
(0.66)
|
Current Income Tax
Expense
|
|
|
(1.25)
|
|
|
(0.60)
|
Adjusted Funds
Flow(1)
|
|
$
|
29.63
|
|
$
|
31.56
|
|
|
|
|
|
|
|
SELECTED OPERATING
RESULTS
|
|
Three months
ended
March 31,
|
|
|
2023
|
|
2022
|
Average Daily
Production(3)
|
|
|
|
|
|
|
Crude Oil
(bbls/day)
|
|
|
47,369
|
|
|
47,634
|
Natural Gas Liquids
(bbls/day)
|
|
|
9,365
|
|
|
8,377
|
Natural Gas
(Mcf/day)
|
|
|
245,509
|
|
|
217,111
|
Total
(BOE/day)
|
|
|
97,652
|
|
|
92,196
|
|
|
|
|
|
|
|
% Crude Oil and Natural
Gas Liquids
|
|
|
58 %
|
|
|
61 %
|
|
|
|
|
|
|
|
Average Selling
Price(3)(4)
|
|
|
|
|
|
|
Crude Oil (per
bbl)
|
|
$
|
76.34
|
|
$
|
91.95
|
Natural Gas Liquids
(per bbl)
|
|
|
20.55
|
|
|
37.78
|
Natural Gas (per
Mcf)
|
|
|
3.08
|
|
|
4.62
|
|
|
|
|
|
|
|
Net Wells
Drilled
|
|
|
15.7
|
|
|
14.9
|
(1)
|
These non–GAAP measures
may not be directly comparable to similar measures presented by
other entities See "Non-GAAP and Other Financial Measures" section
in this news release.
|
(2)
|
Non–cash amounts have
been excluded.
|
(3)
|
Based on net production
volumes. See "Basis of Presentation" section in this news
release.
|
(4)
|
Before transportation
costs and commodity derivative instruments.
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
(US$ thousands) unaudited
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
52,578
|
|
$
|
38,000
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
|
|
231,735
|
|
|
276,590
|
|
Other current
assets
|
|
|
|
56,987
|
|
|
56,552
|
|
Derivative financial
assets
|
|
|
|
23,647
|
|
|
36,542
|
|
|
|
|
|
364,947
|
|
|
407,684
|
|
Property, plant and
equipment:
|
|
|
|
|
|
|
|
|
Crude oil and natural
gas properties (full cost method)
|
|
|
|
1,384,953
|
|
|
1,322,904
|
|
Other capital
assets
|
|
|
|
9,678
|
|
|
10,685
|
|
Property, plant and
equipment
|
|
|
|
1,394,631
|
|
|
1,333,589
|
|
Other long-term
assets
|
|
|
|
14,632
|
|
|
21,154
|
|
Right-of-use
assets
|
|
|
|
17,469
|
|
|
20,556
|
|
Deferred income tax
asset
|
|
|
|
150,280
|
|
|
154,998
|
|
Total
Assets
|
|
|
$
|
1,941,959
|
|
$
|
1,937,981
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
|
386,590
|
|
$
|
398,482
|
|
Current portion of
long-term debt
|
|
|
|
80,600
|
|
|
80,600
|
|
Derivative financial
liabilities
|
|
|
|
3,191
|
|
|
10,421
|
|
Current portion of
lease liabilities
|
|
|
|
12,750
|
|
|
13,664
|
|
|
|
|
|
483,131
|
|
|
503,167
|
|
Long-term
debt
|
|
|
|
122,600
|
|
|
178,916
|
|
Asset retirement
obligation
|
|
|
|
116,094
|
|
|
114,662
|
|
Lease
liabilities
|
|
|
|
7,008
|
|
|
9,262
|
|
Deferred income tax
liability
|
|
|
|
74,513
|
|
|
55,361
|
|
Total
Liabilities
|
|
|
|
803,346
|
|
|
861,368
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Share capital –
authorized unlimited common shares, no par value
Issued and outstanding:
March 31, 2023 – 215 million shares
December 31, 2022 – 217 million shares
|
|
|
|
2,811,708
|
|
|
2,837,329
|
|
Paid-in
capital
|
|
|
|
34,295
|
|
|
50,457
|
|
Accumulated
deficit
|
|
|
|
(1,406,049)
|
|
|
(1,509,832)
|
|
Accumulated other
comprehensive loss
|
|
|
|
(301,341)
|
|
|
(301,341)
|
|
|
|
|
|
1,138,613
|
|
|
1,076,613
|
|
Total Liabilities
& Shareholders' Equity
|
|
|
$
|
1,941,959
|
|
$
|
1,937,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Income/(Loss) and
Comprehensive Income/(Loss)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
March 31,
|
(US$ thousands,
except per share amounts) unaudited
|
|
|
2023
|
|
2022
|
Revenues
|
|
|
|
|
|
|
|
Crude oil and natural
gas sales
|
|
|
$
|
413,182
|
|
$
|
513,152
|
Commodity derivative
instruments gain/(loss)
|
|
|
|
27,965
|
|
|
(206,810)
|
|
|
|
|
441,147
|
|
|
306,342
|
Expenses
|
|
|
|
|
|
|
|
Operating
|
|
|
|
92,804
|
|
|
83,244
|
Transportation
|
|
|
|
37,768
|
|
|
35,807
|
Production
taxes
|
|
|
|
30,123
|
|
|
35,355
|
General and
administrative
|
|
|
|
19,432
|
|
|
17,581
|
Depletion, depreciation
and accretion
|
|
|
|
87,109
|
|
|
66,691
|
Interest
|
|
|
|
4,318
|
|
|
6,055
|
Foreign exchange
(gain)/loss
|
|
|
|
(97)
|
|
|
887
|
Other
expense/(income)
|
|
|
|
(2,666)
|
|
|
12,697
|
|
|
|
|
268,791
|
|
|
258,317
|
Income/(Loss) Before
Taxes
|
|
|
|
172,356
|
|
|
48,025
|
Current income tax
expense/(recovery)
|
|
|
|
11,000
|
|
|
5,000
|
Deferred income tax
expense/(recovery)
|
|
|
|
23,870
|
|
|
9,782
|
Net
Income/(Loss)
|
|
|
$
|
137,486
|
|
$
|
33,243
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income/(Loss)
|
|
|
|
|
|
|
|
Unrealized gain/(loss)
on foreign currency translation
|
|
|
|
—
|
|
|
(620)
|
Foreign exchange
gain/(loss) on net investment hedge, net of tax
|
|
|
|
—
|
|
|
5,375
|
Total Comprehensive
Income/(Loss)
|
|
|
$
|
137,486
|
|
$
|
37,998
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
per Share
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.63
|
|
$
|
0.14
|
Diluted
|
|
|
$
|
0.62
|
|
$
|
0.13
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
March 31,
|
(US$ thousands) unaudited
|
|
|
2023
|
|
2022
|
Operating
Activities
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
|
$
|
137,486
|
|
$
|
33,243
|
Non-cash items
add/(deduct):
|
|
|
|
|
|
|
|
Depletion, depreciation
and accretion
|
|
|
|
87,109
|
|
|
66,691
|
Changes in fair value
of derivative instruments
|
|
|
|
6,344
|
|
|
133,332
|
Deferred income tax
expense/(recovery)
|
|
|
|
23,870
|
|
|
9,782
|
Unrealized foreign
exchange (gain)/loss on working capital
|
|
|
|
(185)
|
|
|
1,171
|
Share-based
compensation and general and administrative
|
|
|
|
7,363
|
|
|
4,660
|
Other
expense/(income)
|
|
|
|
(1,650)
|
|
|
12,653
|
Amortization of debt
issuance costs
|
|
|
|
394
|
|
|
353
|
Translation of U.S.
dollar cash held in parent company
|
|
|
|
—
|
|
|
10
|
Investing activities in
Other income
|
|
|
|
(322)
|
|
|
—
|
Asset retirement
obligation settlements
|
|
|
|
(6,782)
|
|
|
(8,795)
|
Changes in non-cash
operating working capital
|
|
|
|
(12,226)
|
|
|
(57,108)
|
Cash flow from/(used
in) operating activities
|
|
|
|
241,401
|
|
|
195,992
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Drawings
from/(repayment of) bank credit facilities
|
|
|
|
(56,316)
|
|
|
(104,409)
|
Purchase of common
shares under Normal Course Issuer Bid
|
|
|
|
(54,560)
|
|
|
(37,207)
|
Share-based
compensation – tax withholdings settled in cash
|
|
|
|
(16,392)
|
|
|
(11,567)
|
Dividends
|
|
|
|
(11,993)
|
|
|
(7,918)
|
Cash flow from/(used
in) financing activities
|
|
|
|
(139,261)
|
|
|
(161,101)
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital and office
expenditures
|
|
|
|
(93,923)
|
|
|
(75,027)
|
Canadian
divestments
|
|
|
|
5,191
|
|
|
—
|
Property and land
acquisitions
|
|
|
|
(1,748)
|
|
|
(1,941)
|
Property and land
divestments
|
|
|
|
2,733
|
|
|
6,581
|
Cash flow from/(used
in) investing activities
|
|
|
|
(87,747)
|
|
|
(70,387)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
|
185
|
|
|
(3,121)
|
Change in cash and cash
equivalents
|
|
|
|
14,578
|
|
|
(38,617)
|
Cash and cash
equivalents, beginning of period
|
|
|
|
38,000
|
|
|
61,348
|
Cash and cash
equivalents, end of period
|
|
|
$
|
52,578
|
|
$
|
22,731
|
About Enerplus
Enerplus is an independent North American oil and gas
exploration and production company focused on creating long-term
value for its shareholders through a disciplined, returns-based
capital allocation strategy and a commitment to safe, responsible
operations. For more information, visit the Company's website at
www.enerplus.com.
Follow @EnerplusCorp on Twitter at
https://twitter.com/EnerplusCorp.
NOTICE REGARDING INFORMATION CONTAINED IN THIS NEWS
RELEASE
Currency and Accounting Principles
All amounts in this news release are stated in U.S. dollars
unless otherwise specified. All financial information in this news
release has been prepared and presented in accordance with U.S.
GAAP, except as noted below under "Non-GAAP and Other Financial
Measures".
Barrels of Oil Equivalent
This news release contains references to "BOE" (barrels of
oil equivalent), "MBOE" (one thousand barrels of oil equivalent),
and "MMBOE" (one million barrels of oil equivalent). Enerplus has
adopted the standard of six thousand cubic feet of gas to one
barrel of oil (6 Mcf: 1 bbl) when converting natural gas to
BOEs. BOE, MBOE and MMBOE may be misleading, particularly if
used in isolation. The foregoing conversion ratios are based
on an energy equivalency conversion method primarily applicable at
the burner tip and do not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of
oil as compared to natural gas is significantly different from the
energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may
be misleading.
Basis of Presentation
All production volumes presented in this news release are
reported on a "net" basis (the Company's working interest share
after deduction of royalty obligations, plus the Company's royalty
interests), unless expressly indicated that it is being presented
on a "gross" basis.
All references to "liquids" in this news release include
light and medium crude oil, heavy oil and tight oil (all together
referred to as "crude oil") and NGLs on a combined basis. All
references to "natural gas" in this news release include
conventional natural gas and shale gas on a combined basis.
Readers are urged to review the 2023 interim Management's
Discussion & Analysis (MD&A) and financial statements, and
2022 MD&A and financial statements filed on SEDAR and as part
of our Form 6-K and Form 40-F, respectively, on EDGAR concurrently
with this news release for more complete disclosure on our
operations.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking
information and statements ("forward-looking information") within
the meaning of applicable securities laws. The use of any of the
words "expect", "anticipate", "continue", "estimate", "guidance",
"ongoing", "may", "will", "project", "plans", "budget", "strategy"
and similar expressions are intended to identify forward-looking
information. In particular, but without limiting the foregoing,
this news release contains forward-looking information pertaining
to the following: 2023 production and capital spending guidance;
Enerplus' return of capital plans, including expectations regarding
payment of dividends and the source of funds related thereto; the
funding of dividends and the share repurchase program from free
cash flow; the anticipated percentage of free cash flow planned to
be returned to shareholders; expectations regarding Enerplus' share
purchase program, including the completion of the Company's current
NCIB and the timing thereof; the anticipated renewal of the
Company's NCIB based on current market conditions, including the
timing and size thereof; expectations regarding the number of net
operated wells brought on production in the second quarter of 2023;
expected operating strategy in 2023 and expectations regarding our
drilling program; oil and natural gas prices and differentials and
expectations regarding the market environment and our commodity
risk management program in 2023; 2023 Bakken and Marcellus
differential guidance; expectations regarding realized oil and
natural gas prices; and expected operating, transportation and cash
G&A expenses and production taxes and 2023 guidance with
respect thereto.
The forward-looking information contained in this news
release reflects several material factors and expectations and
assumptions of Enerplus including, without
limitation: the ability to fund our return of
capital plans, including both dividends at the
current level and the share repurchase program, from
free cash flow as expected; that our common share trading price
will be at levels, and that there will be no other
alternatives, that, in each case, make share repurchases an
appropriate and best strategic use of our free cash
flows; our ability to achieve, in a timely manner, all
necessary regulatory approvals for the renewal of the Company's
NCIB; that we will conduct our operations and achieve results of
operations as anticipated; the continued operation of the Dakota
Access Pipeline; that our development plans will achieve the
expected results; that lack of adequate infrastructure will not
result in curtailment of production and/or reduced realized prices
beyond our current expectations; current and anticipated commodity
prices, differentials and cost assumptions; the general continuance
of current or, where applicable, assumed industry conditions, the
impact of inflation, weather conditions and storage fundamentals;
the continuation of assumed tax, royalty and regulatory regimes;
the accuracy of the estimates of our reserve and contingent
resource volumes; the continued availability of adequate debt
and/or equity financing and adjusted funds flow to fund our
capital, operating and working capital requirements, and dividend
payments as needed; our ability to comply with our debt covenants;
our ability to meet the targets associated with our credit
facilities; the availability of third party services; expected
transportation expenses; the extent of our liabilities; and the
availability of technology and process to achieve environmental
targets.
In addition, our 2023 guidance described in this news release
is based on: a WTI price of $80.00/bbl, a NYMEX price of $3.00/Mcf, a Bakken crude oil price differential
of $0.50/bbl above WTI, a Marcellus
natural gas price differential of $0.75/Mcf below NYMEX and a CDN/USD exchange rate
of 0.74. Enerplus believes the material factors, expectations and
assumptions reflected in the forward-looking information are
reasonable but no assurance can be given that these factors,
expectations and assumptions will prove to be correct. Current
conditions, economic and otherwise, render assumptions, although
reasonable when made, subject to greater uncertainty.
The forward-looking information included in this news release
is not a guarantee of future performance and should not be unduly
relied upon. Such information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking information including, without limitation:
continued instability, or further deterioration, in global economic
and market environment, including from inflation and/or the
Ukraine/Russia conflict and heightened geopolitical
risks; decreases in commodity prices or volatility in commodity
prices; changes in realized prices of Enerplus' products from those
currently anticipated; changes in the demand for or supply of our
products, including global energy demand; volatility in our
common share trading price and free cash flow that
could impact our planned share repurchases and dividend
levels; unanticipated operating results, results from our
capital spending activities or production declines; legal
proceedings or other events inhibiting or preventing operation of
the Dakota Access Pipeline; curtailment of our production due to
low realized prices or lack of adequate infrastructure; changes in
tax or environmental laws, royalty rates or other regulatory
matters; changes in our capital plans or by third party operators
of our properties; increased debt levels or debt service
requirements; inability to comply with debt covenants under our
credit facilities and/or outstanding senior notes; inaccurate
estimation of our oil and gas reserve and contingent resource
volumes; limited, unfavourable or a lack of access to capital
markets; increased costs; a lack of adequate insurance coverage;
the impact of competitors; reliance on industry partners and third
party service providers; changes in law or government programs or
policies in Canada or the United States; and certain other risks
detailed from time to time in our public disclosure documents
(including, without limitation, those risks identified in our first
quarter 2023 MD&A, our annual information form for the year
ended December 31, 2022, our 2022
annual MD&A and Form 40-F as at December
31, 2022).
The forward-looking information contained in this news
release speaks only as of the date of this news release. Enerplus
does not undertake any obligation to publicly update or revise any
forward-looking information contained herein, except as required by
applicable laws. Any forward-looking information contained
herein are expressly qualified by this cautionary
statement.
NON-GAAP AND OTHER FINANCIAL MEASURES
Readers are referred to "Non-GAAP and Other Financial Measures"
in Enerplus' first quarter 2023 MD&A for supplementary
financial measures, which information is incorporated by reference
to this new release.
Non-GAAP Financial Measures
This news release includes references to certain non-GAAP
financial measures and non-GAAP ratios used by the Company to
evaluate its financial performance, financial position or cash
flow. Non-GAAP financial measures are financial measures disclosed
by a company that (a) depict historical or expected future
financial performance, financial position or cash flow of a
company, (b) with respect to their composition, exclude amounts
that are included in, or include amounts that are excluded from,
the composition of the most directly comparable financial measure
disclosed in the primary financial statements of the company, (c)
are not disclosed in the financial statements of the company and
(d) are not a ratio, fraction, percentage or similar
representation. Non-GAAP ratios are financial measures disclosed by
a company that are in the form of a ratio, fraction, percentage or
similar representation that has a non-GAAP financial measure as one
or more of its components, and that are not disclosed in the
financial statements of the company.
These non-GAAP financial measures and non-GAAP ratios do not
have standardized meanings or definitions as prescribed by
U.S. GAAP and may not be comparable with the calculation of
similar financial measures by other entities.
For each measure, we have: (a) indicated the composition of the
measure; (b) identified the most directly comparable GAAP financial
measure and provided comparative detail where appropriate; (c)
indicated the reconciliation of the measure to the most directly
comparable GAAP financial measure to the extent one exists; and (d)
provided details on the usefulness of the measure for the reader.
These non-GAAP financial measures and non-GAAP ratios should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP.
"Adjusted net income" is used by Enerplus and is useful
to investors and securities analysts in evaluating the financial
performance of the company by adjusting for certain unrealized
items and other items that the company considers appropriate to
adjust given their irregular nature. The most directly comparable
GAAP measure is net income/(loss).
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
($ millions)
|
|
2023
|
|
2022
|
Net
income/(loss)
|
|
$
|
137.5
|
|
$
|
33.2
|
Unrealized derivative
instrument, foreign exchange and marketable securities
(gain)/loss
|
|
|
4.6
|
|
|
134.5
|
Other expense related
to investing activities
|
|
|
—
|
|
|
13.1
|
Tax effect
|
|
|
(1.4)
|
|
|
(35.0)
|
Adjusted net
income/(loss)
|
|
$
|
140.7
|
|
$
|
145.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"Free cash flow" is used by Enerplus and is useful to
investors and securities analysts in analyzing operating and
financial performance, leverage and liquidity. Free cash flow is
calculated as adjusted funds flow minus capital spending. The
most directly comparable GAAP measure is cash flow
from operating activities.
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
($ millions)
|
|
2023
|
|
2022
|
Cash flow from/(used
in) operating activities
|
|
$
|
241.4
|
|
$
|
196.0
|
Asset retirement
obligation settlements
|
|
|
6.8
|
|
|
8.8
|
Changes in non-cash
operating working capital
|
|
|
12.2
|
|
|
57.1
|
Adjusted funds
flow
|
|
$
|
260.4
|
|
$
|
261.9
|
Capital
spending
|
|
|
(138.6)
|
|
|
(99.0)
|
Free cash
flow
|
|
$
|
121.8
|
|
$
|
162.9
|
Other Financial Measures
CAPITAL MANAGEMENT MEASURES
Capital management measures are financial measures disclosed by
a company that (a) are intended to enable an individual to evaluate
a company's objectives, policies and processes for managing the
company's capital, (b) are not a component of a line item disclosed
in the primary financial statements of the company, (c) are
disclosed in the notes to the financial statements of the company,
and (d) are not disclosed in the primary financial statements of
the company. The following section provides an explanation of the
composition of those capital management measures if not previously
provided:
"Adjusted funds flow" is used by Enerplus and is
useful to investors and securities analysts, in analyzing operating
and financial performance, leverage and liquidity. The most
directly comparable GAAP measure is cash flow from operating
activities. Adjusted funds flow is calculated as cash flow from
operating activities before asset retirement obligation
expenditures and changes in non-cash operating working capital.
"Net debt" is calculated as current and long-term debt
associated with senior notes plus any outstanding bank credit
facilities balances, less cash and cash equivalents. "Net debt" is
useful to investors and securities analysts in analyzing financial
liquidity and Enerplus considers net debt to be a key measure of
capital management. For further details, see Note 5 to the Interim
Financial Statements.
"Net debt to adjusted funds flow ratio" is used by
Enerplus and is useful to investors and securities analysts in
analyzing leverage and liquidity. The net debt to adjusted funds
flow ratio is calculated as net debt divided by a trailing twelve
months of adjusted funds flow. There is no directly comparable GAAP
equivalent for this measure, and it is not equivalent to any of our
debt covenants.
SUPPLEMENTARY FINANCIAL MEASURES
Supplementary financial measures are financial measures
disclosed by a company that (a) are, or are intended to be,
disclosed on a periodic basis to depict the historical or expected
future financial performance, financial position or cash flow of a
company, (b) are not disclosed in the financial statements of the
company, (c) are not non-GAAP financial measures, and (d) are not
non-GAAP ratios. The following section provides an explanation of
the composition of those supplementary financial measures if not
previously provided:
"Capital spending" Capital and office expenditures,
excluding other capital assets/office capital and property and land
acquisitions and divestments.
"Cash general and administrative expenses" or "Cash G&A
expenses" General and administrative expenses that are settled
through cash payout, as opposed to expenses that relate to
accretion or other non-cash allocations that are recorded as part
of general and administrative expenses.
Electronic copies of Enerplus' first quarter 2023 and annual
2022 Financial Statements and associated MD&As, along with
other public information including investor presentations, are or
will be available on the Company's website at www.enerplus.com. For
further information, please contact Investor Relations at
1-800-319-6462 or email investorrelations@enerplus.com.
SOURCE Enerplus Corporation