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 "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 and "Notice Regarding Information Contained in this News
Release", "Non-GAAP Measures" in Enerplus' second quarter 2023
MD&A for supplementary financial measures, which information is
incorporated by reference to this news release. A copy of Enerplus'
2023 interim and 2022 annual 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.sedarplus.com
and on the EDGAR website at www.sec.gov.
CALGARY,
AB, Aug. 9, 2023 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX: ERF) (NYSE: ERF) today
announced second quarter of 2023 results, updated 2023 guidance and
return of capital plans, and an increased dividend. The Company
reported second quarter 2023 cash flow from operating activities
and adjusted funds flow of $186.6
million and $196.6 million,
respectively, compared to $250.9
million and $297.4 million,
respectively, in the second quarter of 2022. Cash flow from
operating activities and adjusted funds flow decreased from the
prior year period primarily due to lower commodity prices.
HIGHLIGHTS
- Second quarter production averaged 95.6 MBOE per day, including
58.2 Mbbl per day of liquids
- Production per share increased by 14% in the second quarter of
2023 compared to the same period in 2022
- Total production guidance for full-year 2023 was increased to
94.5 – 98.5 MBOE per day (from 93.0 – 98.0 MBOE per day), with
liquids production guidance increased to 58.5 – 61.5 Mbbl per day
(from 57.0 – 61.0 Mbbl per day) due to strong well performance
- Robust oil production growth is anticipated in the second half
of 2023: approximately 10% liquids production growth is expected in
the third quarter compared to the second quarter
- Returned $66.5 million to
shareholders in the second quarter through dividends and share
repurchases. Through the first half of 2023, Enerplus returned
$133.1 million to shareholders,
representing 97% of free cash flow(1)
- Planning to return at least 60% of second half 2023 free cash
flow to shareholders which is expected to result in over 70% of
full-year 2023 free cash flow returned to shareholders, based on
current commodity prices
- Increased quarterly dividend by 9% to $0.06 per share
- Normal course issuer bid ("NCIB") was completed having
repurchased the maximum 10% of the public float between
August 2022 and July 2023. The Company plans to renew its NCIB in
August 2023 for another 10% of the
public float
- Capital spending guidance range for 2023 was narrowed to
$510 – $550
million (from $500 –
$550 million)
(1) This is
a non-GAAP financial measure. Refer to "Non-GAAP and Other
Financial Measures" section for more information.
|
"Enerplus' second quarter results and updated 2023 outlook
reflect our strong operating momentum," said Ian C. Dundas, President and CEO. "Our setup for
the second half of 2023 is compelling. We anticipate robust oil
production growth and a free cash flow profile that is
approximately double what we generated during the first half of the
year. With this outlook and our strong financial position, we plan
to continue to return a meaningful proportion of free cash flow to
shareholders through the balance of the year."
SECOND QUARTER SUMMARY
Production in the second quarter of 2023 was 95,572 BOE per day,
a decrease of 2% compared to the first quarter of 2023 and 2%
higher than the same period a year ago. Crude oil and natural gas
liquids production in the second quarter of 2023 was 58,214 barrels
per day, an increase of 3% and 2% compared to the prior quarter and
the same period a year ago, respectively. The increased production
compared to the same period in 2022 was primarily driven by new
wells online in North Dakota,
partially offset by lower natural gas production in the Marcellus
due to limited capital activity in 2023, and was despite the sale
of the Company's Canadian assets in the fourth quarter of 2022.
Enerplus reported second quarter 2023 net income of $74.2 million, or $0.35 per share (basic), compared to net income
of $244.4 million, or $1.01 per share (basic), in the same period in
2022. Adjusted net income(1) for the second quarter of
2023 was $84.4 million, or
$0.39 per share (basic), compared to
$172.3 million, or $0.72 per share (basic), during the same period
in 2022. Net income and adjusted net income were lower compared to
the prior year period primarily due to higher commodity prices
during the second quarter of 2022.
Enerplus' second quarter 2023 realized Bakken oil price
differential was $0.71 per barrel
below WTI, compared to $0.85 per
barrel above WTI in the second quarter of 2022. The weaker realized
differential was due to lower prices for crude oil delivered to
markets in both North Dakota and
the U.S. Gulf Coast primarily due to weaker U.S. refinery margins
early in the quarter. U.S. refinery utilization recovered later in
the second quarter supported by resilient domestic product demand.
Enerplus expects its annual realized Bakken crude oil price
differential to be at par with WTI (prior guidance was $0.50 per barrel above WTI).
The Company's realized Marcellus natural gas price differential
was $0.68 per Mcf below NYMEX during
the second quarter of 2023, compared to $0.59 per Mcf below NYMEX in the second quarter
of 2022. Enerplus continues to expect its 2023 Marcellus natural
gas price differential to average $0.75 per Mcf below NYMEX.
In the second quarter of 2023, Enerplus' operating costs were
$10.25 per BOE, compared to
$9.74 per BOE during the second
quarter of 2022. The increase in per unit operating expenses
compared to the same period in 2022 was due to inflation adjusted
contract pricing, increased gas processing volumes due to improved
capture rates, higher planned well service activity and lower
natural gas production in the Marcellus. Enerplus is updating its
2023 operating expense guidance to $10.75 – $11.50 per
BOE (from $10.75 – $11.75 per BOE) to reflect lower operating
expenses through the first half of the year, along with higher
planned workover activity and an increased liquids production
weighting in the second half of the year.
Capital spending totaled $180.9
million in the second quarter of 2023. In addition,
Enerplus paid $11.8 million in
dividends in the quarter and repurchased 3.8 million shares at an
average price of $14.45 per share,
for total consideration of $54.8
million. During July 2023,
Enerplus repurchased the remaining 0.5 million shares under its
NCIB at an average price of $14.63
per share, for total consideration of $7.9
million. This was the second consecutive year of
repurchasing the maximum number of shares allowed under an
NCIB.
Current tax expense was $3.5
million in the second quarter. Enerplus reduced its
full-year 2023 current tax expense guidance to 3 – 4% of adjusted
funds flow before tax (from 5 – 6%) due to lower than forecast
realized commodity prices year to date.
Enerplus ended the second quarter of 2023 with net debt of
$199.6 million and a net debt to
adjusted funds flow ratio of 0.2 times.
(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 68,938 BOE per day during the second quarter of 2023, an
increase of 18% compared to the same period a year ago and 3%
higher compared to the previous quarter. During the second quarter,
Enerplus drilled 17 gross operated wells (92% average working
interest) and brought 23 gross operated wells (86% average working
interest) on production. In addition, the Company completed 4
refracs (75% average working interest) in the quarter.
The wells brought on production in the second quarter included
Enerplus' first two operated pads in the Little Knife area. Early
time performance has been strong — nine of these wells have had at
least 30 days on production and have averaged a gross peak 30-day
rate per well of 1,900 barrels of oil per day (2,900 BOE per day on
a three-stream basis).
Enerplus expects to bring approximately 14 – 17 net operated
wells on production in North
Dakota in the third quarter.
RETURN OF CAPITAL TO SHAREHOLDERS
During the first six months of 2023, Enerplus returned
$133.1 million to shareholders
through share repurchases and dividends representing 97% of free
cash flow. Given the Company's strong balance sheet and the robust
free cash flow profile expected during the second half of the year,
Enerplus plans to return at least 60% of its second half 2023 free
cash flow to shareholders, which is expected to result in over 70%
of full year 2023 free cash flow returned.
Based on current market conditions, Enerplus plans to continue
to prioritize share repurchases for the majority of its return of
capital through 2023. In connection with this plan, the Board of
Directors approved the renewal of the Company's NCIB to repurchase
another 10% of the public float in the next 12-month period.
Additionally, the Board of Directors approved a 9% increase to
the quarterly dividend to $0.06 per
share to be paid in September 2023,
for shareholders of record on August 31,
2023.
Remaining free cash flow not allocated to shareholder returns is
expected to be directed to reinforcing the balance sheet.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE UPDATE
As highlighted with the release of its 2023 ESG report in
June 2023, Enerplus is delivering
meaningful reductions to its greenhouse gas ("GHG") emissions
profile through its flaring reduction and engine and power
initiatives. The Company anticipates a reduction to its 2023 scope
1 and 2 GHG emissions intensity of approximately 30% compared to
2021 (representing an approximate 50% reduction compared to 2019).
Given this performance, the Company anticipates achieving its 2030
GHG emissions intensity reduction target as early as 2024 and plans
to provide an updated long-term target in due course.
2023 GUIDANCE UPDATE AND THIRD QUARTER OUTLOOK
Enerplus' updated 2023 guidance is provided in the tables
below.
Enerplus increased its total production guidance to 94,500 –
98,500 BOE per day, from the prior guidance of 93,000 – 98,000 BOE
per day. Liquids production guidance was increased to 58,500 –
61,500 barrels per day, from the prior guidance of 57,000 – 61,000
barrels per day. The increase to production guidance reflects
strong well performance in North
Dakota.
The execution of the Company's capital program remains on
schedule and budget. Capital spending guidance has been narrowed to
$510 – $550
million, from $500 –
$550 million.
Enerplus is anticipating strong oil production growth in the
second half of 2023. Third quarter liquids production is expected
to be approximately 10% higher than the second quarter, with an oil
weighting of approximately 82%. Natural gas production is
anticipated to be modestly lower in the third quarter, compared to
the second quarter, due to lower production from the Marcellus.
2023 Guidance Summary
|
|
Updated
Guidance
|
|
Previous
Guidance
|
Capital
spending
|
|
$510 – 550
million
|
|
$500 – 550
million
|
Average total
production
|
|
94,500 – 98,500
BOE/day
|
|
93,000 – 98,000
BOE/day
|
Average liquids
production
|
|
58,500 – 61,500
bbls/day
|
|
57,000 – 61,000
bbls/day
|
Average production tax
rate
(% of net sales, before
transportation)
|
|
8 %
|
|
7-8%
|
Operating
expense
|
|
$10.75 –
11.50/BOE
|
|
$10.75 –
11.75/BOE
|
Transportation
expense
|
|
$4.20/BOE (No
change)
|
|
$4.20/BOE
|
Cash G&A
expense
|
|
$1.35/BOE (No
change)
|
|
$1.35/BOE
|
Current tax
expense
|
|
3-4% of adjusted funds
flow, before tax
|
|
5-6% of adjusted funds
flow, before tax
|
2023 Differential/Basis Outlook(1)
|
Updated
Guidance
|
Previous
Guidance
|
U.S. Bakken crude oil
differential
(compared to WTI crude
oil)
|
Par with WTI
|
+$0.50/bbl
|
Marcellus natural gas
sales price differential
(compared to last day
NYMEX natural gas)
|
$(0.75)/Mcf (No
change)
|
$(0.75)/Mcf
|
|
|
(1)
|
Excluding
transportation costs.
|
Q2 2023 Conference Call Details
A conference call hosted by Ian C.
Dundas, President and CEO will be held at 9:00 AM MT (11:00 AM
ET) on Thursday, August 10,
2023, to discuss these results. Details of the conference
call are as follows:
Date:
|
Thursday,
August 10, 2023
|
Time:
|
9:00 AM MT
(11:00 AM ET)
|
Audiocast:
|
https://app.webinar.net/A7O5L5MLQxa
|
To immediately join the conference call by phone, without
operator assistance, please use the following URL to register and
be connected into the conference call by automated call
back: https://emportal.ink/3XaahvI.
To join the call from a live operator managed queue, please dial
1-888-390-0546 (Toll Free) using conference ID 32077979.
To ensure timely participation in the conference call, callers
are encouraged to join 15 minutes prior to the start time to
register for the event. A telephone replay will be available for 30
days following the conference call and can be accessed at the
following numbers:
Replay Dial-In: 1-888-390-0541 (Toll Free)
Replay Passcode: 077979 #
PRICE RISK MANAGEMENT
The following is a summary of Enerplus' financial commodity
hedging contracts at August 8,
2023.
|
|
WTI Crude Oil
($/bbl) (1)(2)
|
|
|
NYMEX Natural Gas
($/Mcf)(2)
|
|
|
Jul 1,
2023 –
|
|
|
Jul 1, 2023
–
|
|
|
Dec 31,
2023
|
|
|
Oct
31, 2023
|
Swaps
|
|
|
|
|
|
Volume
(bbls/day)
|
|
10,000
|
|
|
–
|
Brent - WTI
Spread
|
|
$ 5.47
|
|
|
–
|
|
|
|
|
|
|
3 Way
Collars
|
|
|
|
|
|
Volume
(bbls/day)
|
|
5,000
|
|
|
–
|
Sold Puts
|
|
$ 65.00
|
|
|
–
|
Purchased
Puts
|
|
$ 85.00
|
|
|
–
|
Sold Calls
|
|
$ 128.16
|
|
|
–
|
|
|
|
|
|
|
Collars
|
|
|
|
|
|
Volume
(Mcf/day)
|
|
–
|
|
|
50,000
|
Volume
(bbls/day)(3)
|
|
2,000
|
|
|
–
|
Purchased
Puts
|
|
$ 5.00
|
|
|
$ 4.05
|
Sold Calls
|
|
$ 75.00
|
|
|
$ 7.00
|
|
|
(1)
|
The total average
deferred premium spent on outstanding hedges is $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 Company's
acquisition of Bruin E&P Holdco, LLC completed in
2021.
|
SECOND QUARTER 2023 PRODUCTION AND OPERATIONAL SUMMARY
TABLES
Summary of Average Daily Production(1)
Three months ended
June 30, 2023
|
|
|
Six months ended
June 30, 2023
|
|
Williston
Basin
|
Marcellus
|
Other(2)
|
Total
|
|
|
Williston
Basin
|
Marcellus
|
Other(2)
|
Total
|
Tight oil
(bbl/d)
|
46,749
|
-
|
680
|
47,430
|
|
|
46,687
|
-
|
712
|
47,399
|
Total crude oil
(bbl/d)
|
46,749
|
-
|
680
|
47,430
|
|
|
46,687
|
-
|
712
|
47,399
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas liquids
(bbl/d)
|
10,666
|
-
|
118
|
10,784
|
|
|
9,975
|
-
|
104
|
10,079
|
|
|
|
|
|
|
|
|
|
|
|
Shale gas
(Mcf/d)
|
69,142
|
154,211
|
797
|
224,149
|
|
|
66,849
|
167,126
|
795
|
234,770
|
Total natural gas
(Mcf/d)
|
69,142
|
154,211
|
797
|
224,149
|
|
|
66,849
|
167,126
|
795
|
234,770
|
|
|
|
|
|
|
|
|
|
|
|
Total production
(BOE/d)
|
68,938
|
25,702
|
931
|
95,572
|
|
|
67,804
|
27,854
|
949
|
96,606
|
|
|
(1)
|
Table may not add due
to rounding.
|
(2)
|
Comprises DJ
Basin.
|
Summary of Wells Drilled(1)
|
Three months
ended June 30, 2023
|
|
Six months
ended
June 30, 2023
|
|
Operated
|
|
Non-Operated
|
|
Operated
|
|
Non-Operated
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
Williston
Basin
|
17
|
15.6
|
|
36
|
5.0
|
|
31
|
27.6
|
|
54
|
6.5
|
Marcellus
|
-
|
-
|
|
14
|
0.2
|
|
-
|
-
|
|
26
|
0.4
|
DJ Basin
|
1
|
1.0
|
|
-
|
-
|
|
3
|
2.9
|
|
-
|
-
|
Total
|
18
|
16.6
|
|
50
|
5.2
|
|
34
|
30.5
|
|
80
|
6.9
|
|
|
(1)
|
Table may not add due
to rounding.
|
Summary of Wells Brought On-Stream(1)
|
Three months
ended
June 30, 2023
|
|
Six months ended
June 30, 2023
|
|
Operated
|
|
Non-Operated
|
|
Operated
|
|
Non-Operated
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
Williston
Basin
|
23
|
19.8
|
|
11
|
3.1
|
|
27
|
22.8
|
|
14
|
3.2
|
Marcellus
|
-
|
-
|
|
8
|
0.1
|
|
-
|
-
|
|
21
|
0.3
|
DJ Basin
|
-
|
-
|
|
10
|
0.2
|
|
-
|
-
|
|
10
|
0.2
|
Total
|
23
|
19.8
|
|
29
|
3.4
|
|
27
|
22.8
|
|
45
|
3.7
|
|
|
(1)
|
Table may not add due
to rounding.
|
|
|
Three months
ended
|
|
Six months
ended
|
SELECTED FINANCIAL RESULTS
|
|
June 30,
|
|
June
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Financial (US$,
thousands, except ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(Loss)
|
|
$
|
74,233
|
|
$
|
244,406
|
|
$
|
211,719
|
|
$
|
277,649
|
Adjusted Net
Income(1)
|
|
|
84,405
|
|
|
172,251
|
|
|
225,151
|
|
|
318,079
|
Cash Flow from
Operating Activities
|
|
|
186,598
|
|
|
250,860
|
|
|
427,999
|
|
|
446,852
|
Adjusted Funds
Flow
|
|
|
196,624
|
|
|
297,393
|
|
|
457,033
|
|
|
559,288
|
Dividends to
Shareholders - Declared
|
|
|
11,756
|
|
|
9,940
|
|
|
23,749
|
|
|
17,858
|
Net Debt
|
|
|
199,630
|
|
|
545,983
|
|
|
199,630
|
|
|
545,983
|
Capital
Spending
|
|
|
180,942
|
|
|
132,884
|
|
|
319,590
|
|
|
231,898
|
Property and Land
Acquisitions
|
|
|
1,638
|
|
|
1,469
|
|
|
3,386
|
|
|
3,410
|
Property and Land
Divestments
|
|
|
(94)
|
|
|
8,591
|
|
|
139
|
|
|
15,172
|
Net Debt to Adjusted
Funds Flow Ratio
|
|
|
0.2x
|
|
|
0.5x
|
|
|
0.2x
|
|
|
0.5x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial per
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss) -
Basic
|
|
$
|
0.35
|
|
$
|
1.01
|
|
$
|
0.98
|
|
$
|
1.15
|
Net Income/(Loss) -
Diluted
|
|
|
0.34
|
|
|
0.99
|
|
|
0.96
|
|
|
1.12
|
Weighted Average Number
of Shares Outstanding (000's) - Basic
|
|
|
213,790
|
|
|
239,277
|
|
|
215,289
|
|
|
241,022
|
Weighted Average Number
of Shares Outstanding (000's) - Diluted
|
|
|
219,732
|
|
|
247,216
|
|
|
221,276
|
|
|
248,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial
Results per BOE(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil &
Natural Gas Sales(4)
|
|
$
|
40.35
|
|
$
|
73.31
|
|
$
|
43.70
|
|
$
|
67.67
|
Commodity Derivative
Instruments
|
|
|
1.63
|
|
|
(16.13)
|
|
|
2.77
|
|
|
(12.53)
|
Operating
Expenses
|
|
|
(10.25)
|
|
|
(9.74)
|
|
|
(10.40)
|
|
|
(9.88)
|
Transportation
Costs
|
|
|
(3.96)
|
|
|
(4.41)
|
|
|
(4.13)
|
|
|
(4.36)
|
Production
Taxes
|
|
|
(3.31)
|
|
|
(5.11)
|
|
|
(3.37)
|
|
|
(4.70)
|
General and
Administrative Expenses
|
|
|
(1.20)
|
|
|
(1.10)
|
|
|
(1.34)
|
|
|
(1.22)
|
Cash Share-Based
Compensation
|
|
|
(0.01)
|
|
|
(0.04)
|
|
|
0.05
|
|
|
(0.14)
|
Interest, Foreign
Exchange and Other Expenses
|
|
|
(0.24)
|
|
|
(0.67)
|
|
|
(0.31)
|
|
|
(0.67)
|
Current Income Tax
Expense
|
|
|
(0.40)
|
|
|
(1.40)
|
|
|
(0.83)
|
|
|
(1.01)
|
Adjusted Funds
Flow
|
|
$
|
22.61
|
|
$
|
34.71
|
|
$
|
26.14
|
|
$
|
33.16
|
|
|
Three months
ended
|
|
Six months
ended
|
SELECTED OPERATING RESULTS
|
|
June 30,
|
|
June
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Average Daily
Production(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil
(bbls/day)
|
|
|
47,430
|
|
|
48,213
|
|
|
47,399
|
|
|
47,925
|
Natural Gas Liquids
(bbls/day)
|
|
|
10,784
|
|
|
8,653
|
|
|
10,079
|
|
|
8,516
|
Natural Gas
(Mcf/day)
|
|
|
224,149
|
|
|
223,653
|
|
|
234,770
|
|
|
220,400
|
Total
(BOE/day)
|
|
|
95,572
|
|
|
94,142
|
|
|
96,606
|
|
|
93,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Crude Oil and Natural
Gas Liquids
|
|
|
61 %
|
|
|
60 %
|
|
|
59 %
|
|
|
61 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Selling
Price(3)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil
(per bbl)
|
|
$
|
72.69
|
|
$
|
108.77
|
|
$
|
74.50
|
|
$
|
100.46
|
Natural Gas Liquids
(per bbl)
|
|
|
15.49
|
|
|
33.31
|
|
|
17.83
|
|
|
35.49
|
Natural Gas
(per Mcf)
|
|
|
1.08
|
|
|
6.11
|
|
|
2.17
|
|
|
5.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Wells
Drilled
|
|
|
21.8
|
|
|
16.5
|
|
|
37.4
|
|
|
31.7
|
|
|
(1)
|
This non‑GAAP measure
may not be directly comparable to similar measures presented by
other entities. See "Non-GAAP and Other FinancialMeasures" 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
|
June 30, 2023
|
|
December 31, 2022
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
37,475
|
|
$
|
38,000
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
239,867
|
|
|
276,590
|
Other current
assets
|
|
56,360
|
|
|
56,552
|
Derivative financial
assets
|
|
16,163
|
|
|
36,542
|
|
|
349,865
|
|
|
407,684
|
Property, plant and
equipment:
|
|
|
|
|
|
Crude oil and natural
gas properties (full cost method)
|
|
1,487,322
|
|
|
1,322,904
|
Other capital
assets
|
|
9,837
|
|
|
10,685
|
Property, plant and
equipment
|
|
1,497,159
|
|
|
1,333,589
|
Other long-term
assets
|
|
10,561
|
|
|
21,154
|
Right-of-use
assets
|
|
25,042
|
|
|
20,556
|
Deferred income tax
asset
|
|
143,896
|
|
|
154,998
|
Total
Assets
|
$
|
2,026,523
|
|
$
|
1,937,981
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
400,691
|
|
$
|
398,482
|
Current portion of
long-term debt
|
|
80,600
|
|
|
80,600
|
Derivative financial
liabilities
|
|
2,195
|
|
|
10,421
|
Current portion of
lease liabilities
|
|
12,397
|
|
|
13,664
|
|
|
495,883
|
|
|
503,167
|
Long-term
debt
|
|
156,505
|
|
|
178,916
|
Asset retirement
obligation
|
|
119,050
|
|
|
114,662
|
Lease
liabilities
|
|
14,808
|
|
|
9,262
|
Deferred income tax
liability
|
|
89,264
|
|
|
55,361
|
Total
Liabilities
|
|
875,510
|
|
|
861,368
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Share capital –
authorized unlimited common shares, no par value
Issued and outstanding:
June 30, 2023 – 211 million shares
December 31, 2022 – 217 million shares
|
|
2,776,088
|
|
|
2,837,329
|
Paid-in
capital
|
|
38,963
|
|
|
50,457
|
Accumulated
deficit
|
|
(1,362,697)
|
|
|
(1,509,832)
|
Accumulated other
comprehensive loss
|
|
(301,341)
|
|
|
(301,341)
|
|
|
1,151,013
|
|
|
1,076,613
|
Total Liabilities
& Shareholders' Equity
|
$
|
2,026,523
|
|
$
|
1,937,981
|
Condensed Consolidated Statements of Income/(Loss) and
Comprehensive Income/(Loss)
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
|
June 30,
|
|
June 30,
|
(US$ thousands,
except per share amounts) unaudited
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil and natural
gas sales
|
|
|
|
$
|
350,939
|
|
$
|
628,017
|
|
$
|
764,121
|
|
$
|
1,141,169
|
Commodity derivative
instruments gain/(loss)
|
|
|
|
|
6,961
|
|
|
(47,553)
|
|
|
34,926
|
|
|
(254,363)
|
|
|
|
|
|
357,900
|
|
|
580,464
|
|
|
799,047
|
|
|
886,806
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
89,116
|
|
|
83,366
|
|
|
181,920
|
|
|
166,610
|
Transportation
|
|
|
|
|
34,433
|
|
|
37,830
|
|
|
72,201
|
|
|
73,637
|
Production
taxes
|
|
|
|
|
28,765
|
|
|
43,827
|
|
|
58,888
|
|
|
79,182
|
General and
administrative
|
|
|
|
|
15,074
|
|
|
14,687
|
|
|
34,506
|
|
|
32,268
|
Depletion, depreciation
and accretion
|
|
|
|
|
85,117
|
|
|
70,090
|
|
|
172,226
|
|
|
136,781
|
Interest
|
|
|
|
|
3,592
|
|
|
6,098
|
|
|
7,910
|
|
|
12,153
|
Foreign exchange
(gain)/loss
|
|
|
|
|
(794)
|
|
|
(3,232)
|
|
|
(891)
|
|
|
(2,345)
|
Other
expense/(income)
|
|
|
|
|
3,728
|
|
|
(309)
|
|
|
1,062
|
|
|
12,388
|
|
|
|
|
|
259,031
|
|
|
252,357
|
|
|
527,822
|
|
|
510,674
|
Income/(Loss) Before
Taxes
|
|
|
|
|
98,869
|
|
|
328,107
|
|
|
271,225
|
|
|
376,132
|
Current income tax
expense/(recovery)
|
|
|
|
|
3,500
|
|
|
12,000
|
|
|
14,500
|
|
|
17,000
|
Deferred income tax
expense/(recovery)
|
|
|
|
|
21,136
|
|
|
71,701
|
|
|
45,006
|
|
|
81,483
|
Net
Income/(Loss)
|
|
|
|
$
|
74,233
|
|
$
|
244,406
|
|
$
|
211,719
|
|
$
|
277,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain/(loss)
on foreign currency translation
|
|
|
|
|
—
|
|
|
1,977
|
|
|
—
|
|
|
1,357
|
Foreign exchange
gain/(loss) on net investment hedge, net of
tax
|
|
|
|
|
—
|
|
|
(14,094)
|
|
|
—
|
|
|
(8,719)
|
Total Comprehensive
Income/(Loss)
|
|
|
|
$
|
74,233
|
|
$
|
232,289
|
|
$
|
211,719
|
|
$
|
270,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.35
|
|
$
|
1.01
|
|
$
|
0.98
|
|
$
|
1.15
|
Diluted
|
|
|
|
$
|
0.34
|
|
$
|
0.99
|
|
$
|
0.96
|
|
$
|
1.12
|
Condensed Consolidated Statements of Cash Flows
|
Three months
ended
|
|
Six months
ended
|
|
June 30,
|
|
June 30,
|
(US$ thousands) unaudited
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
$
|
74,233
|
|
$
|
244,406
|
|
$
|
211,719
|
|
$
|
277,649
|
Non-cash items
add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation
and accretion
|
|
85,117
|
|
|
70,090
|
|
|
172,226
|
|
|
136,781
|
Changes in fair value
of derivative instruments
|
|
7,247
|
|
|
(91,275)
|
|
|
13,591
|
|
|
42,057
|
Deferred income tax
expense/(recovery)
|
|
21,136
|
|
|
71,701
|
|
|
45,006
|
|
|
81,483
|
Unrealized foreign
exchange (gain)/loss on working capital
|
|
(527)
|
|
|
(3,292)
|
|
|
(712)
|
|
|
(2,121)
|
Share-based
compensation and general and administrative
|
|
4,625
|
|
|
5,634
|
|
|
11,988
|
|
|
10,294
|
Other
expense/(income)
|
|
4,739
|
|
|
(97)
|
|
|
3,089
|
|
|
12,556
|
Amortization of debt
issuance costs
|
|
394
|
|
|
351
|
|
|
788
|
|
|
704
|
Translation of U.S.
dollar cash held in parent company
|
|
—
|
|
|
(125)
|
|
|
—
|
|
|
(115)
|
Investing activities in
Other income
|
|
(340)
|
|
|
—
|
|
|
(662)
|
|
|
—
|
Asset retirement
obligation settlements
|
|
(2,088)
|
|
|
(2,349)
|
|
|
(8,870)
|
|
|
(11,144)
|
Changes in non-cash
operating working capital
|
|
(7,938)
|
|
|
(44,184)
|
|
|
(20,164)
|
|
|
(101,292)
|
Cash flow from/(used
in) operating activities
|
|
186,598
|
|
|
250,860
|
|
|
427,999
|
|
|
446,852
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
Drawings
from/(repayment of) bank credit facilities
|
|
93,505
|
|
|
48,709
|
|
|
37,189
|
|
|
(55,700)
|
Repayment of senior
notes
|
|
(59,600)
|
|
|
(79,600)
|
|
|
(59,600)
|
|
|
(79,600)
|
Purchase of common
shares under Normal Course Issuer Bid
|
|
(54,778)
|
|
|
(92,928)
|
|
|
(109,338)
|
|
|
(130,135)
|
Share-based
compensation – tax withholdings settled in cash
|
|
(28)
|
|
|
—
|
|
|
(16,420)
|
|
|
(11,567)
|
Dividends
|
|
(11,756)
|
|
|
(9,940)
|
|
|
(23,749)
|
|
|
(17,858)
|
Cash flow from/(used
in) financing activities
|
|
(32,657)
|
|
|
(133,759)
|
|
|
(171,918)
|
|
|
(294,860)
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
Capital and office
expenditures
|
|
(174,882)
|
|
|
(115,040)
|
|
|
(268,805)
|
|
|
(190,067)
|
Canadian
divestments
|
|
7,043
|
|
|
—
|
|
|
12,234
|
|
|
—
|
Property and land
acquisitions
|
|
(1,638)
|
|
|
(1,469)
|
|
|
(3,386)
|
|
|
(3,410)
|
Property and land
divestments
|
|
(94)
|
|
|
(4,462)
|
|
|
2,639
|
|
|
2,119
|
Cash flow from/(used
in) investing activities
|
|
(169,571)
|
|
|
(120,971)
|
|
|
(257,318)
|
|
|
(191,358)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
527
|
|
|
6,545
|
|
|
712
|
|
|
3,424
|
Change in cash and cash
equivalents
|
|
(15,103)
|
|
|
2,675
|
|
|
(525)
|
|
|
(35,942)
|
Cash and cash
equivalents, beginning of period
|
|
52,578
|
|
|
22,731
|
|
|
38,000
|
|
|
61,348
|
Cash and cash
equivalents, end of period
|
$
|
37,475
|
|
$
|
25,406
|
|
$
|
37,475
|
|
$
|
25,406
|
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.
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, based on current commodity prices;
expectations regarding Enerplus' share purchase program,
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 third quarter of 2023; expected operating strategy in 2023 and
expectations regarding our drilling program; expectations regarding
oil production growth and free cash flow profile for the remainder
of 2023; anticipated reduction levels of Enerplus' scope 1 and 2
GHG emissions intensities and the timing thereof; 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 rest of year commodity prices of: a WTI price of
$80.00/bbl, a NYMEX price of
$3.00/Mcf and a CDN/USD exchange rate
of 0.75. 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
second 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 Measures" in Enerplus' second
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/(loss)" 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
June 30,
|
|
Six months ended
June 30,
|
($ millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
income/(loss)
|
|
$
|
74.2
|
|
$
|
244.4
|
|
$
|
211.7
|
|
$
|
277.6
|
Unrealized derivative
instrument, foreign exchange and
marketable securities (gain)/loss
|
|
|
11.7
|
|
|
(94.6)
|
|
|
16.4
|
|
|
40.0
|
Other expense related
to investing activities
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.1
|
Tax effect
|
|
|
(1.5)
|
|
|
22.5
|
|
|
(3.0)
|
|
|
(12.6)
|
Adjusted net
income/(loss)
|
|
$
|
84.4
|
|
$
|
172.3
|
|
$
|
225.1
|
|
$
|
318.1
|
"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
June 30,
|
|
Six months ended
June 30,
|
($ millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flow from/(used
in) operating activities
|
|
$
|
186.6
|
|
$
|
250.9
|
|
$
|
428.0
|
|
$
|
446.9
|
Asset retirement
obligation settlements
|
|
|
2.1
|
|
|
2.3
|
|
|
8.9
|
|
|
11.1
|
Changes in non-cash
operating working capital
|
|
|
7.9
|
|
|
44.2
|
|
|
20.2
|
|
|
101.3
|
Adjusted funds
flow
|
|
$
|
196.6
|
|
$
|
297.4
|
|
$
|
457.1
|
|
$
|
559.3
|
Capital
spending
|
|
|
(180.9)
|
|
|
(132.9)
|
|
|
(319.6)
|
|
|
(231.9)
|
Free cash
flow
|
|
$
|
15.7
|
|
$
|
164.5
|
|
$
|
137.5
|
|
$
|
327.4
|
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' 2023 interim and 2022 annual
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