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' third 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.ca
and on the EDGAR website at www.sec.gov.
|
CALGARY,
AB, Nov. 2, 2023 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX: ERF) (NYSE: ERF) today
announced financial and operating results for the third quarter of
2023 and increased production guidance. The Company reported third
quarter 2023 cash flow from operating activities and adjusted funds
flow of $212.2 million and
$263.7 million, respectively,
compared to $409.9 million and
$355.6 million, respectively, in the
third quarter of 2022. Cash flow from operating activities and
adjusted funds flow decreased from the same period in 2022
primarily due to lower realized commodity prices and
production.
HIGHLIGHTS
- Third quarter total production was 103,192 BOE per day (up 8%
from the prior quarter) including liquids production of 66,625
barrels per day (up 14% from the prior quarter)
- Adjusted funds flow was $263.7
million in the third quarter, which exceeded capital
spending of $121.4 million,
generating free cash flow(1) of $142.3 million
- Total return of capital to shareholders during the third
quarter was $67.7 million (inclusive
of share repurchases and dividends), with $200.8 million returned through the first three
quarters of 2023
- On track to return approximately 70% of full-year 2023 free
cash flow to shareholders which is expected to result in fourth
quarter return of capital of approximately $100 million, based on the current commodity
price environment. Enerplus has repurchased $41 million of stock in the fourth quarter
through November 1, with additional
repurchases planned
- 2023 total production and liquids production guidance was
increased by 2,000 BOE per day and 1,000 barrels per day at the
midpoint, respectively, due to continued strong operational
performance
- 2023 capital spending guidance was narrowed to $520 to $540
million (from the previous range of $510 to $550
million)
- Enerplus expects to exceed its 2030 scope 1 and 2 greenhouse
gas ("GHG") emissions intensity reduction target this year,
representing an approximate 40% reduction from the 2021 baseline
(and 55% from 2019)
(1)
|
This is a non-GAAP
financial measure. Refer to "Non-GAAP and Other Financial Measures"
section for more information.
|
"Enerplus' third quarter results demonstrate our consistent
operational execution and the capital efficient well productivity
from our high-quality Bakken asset," said Ian C. Dundas, President and CEO. "We expect a
solid finish to the year with annual production growth in
North Dakota tracking 9%, capital
spending on budget, and a robust free cash flow profile that
supports an increase in the pace of share repurchases in the fourth
quarter."
THIRD QUARTER SUMMARY
Production in the third quarter of 2023 was 103,192 BOE per day,
an increase of 8% compared to the prior quarter and 4% lower than
the same period a year ago. Crude oil and natural gas liquids
production in the third quarter of 2023 was 66,625 barrels per day,
an increase of 14% compared to the prior quarter and 3% lower than
the same period a year ago. Production increased from the prior
quarter primarily due to strong well productivity and operational
execution in North Dakota.
Production was lower compared to the prior year period as a result
of the sale of substantially all of Enerplus' Canadian assets in
the fourth quarter of 2022 and limited capital activity in the
Marcellus in 2023.
Enerplus reported third quarter 2023 net income of $127.7 million, or $0.61 per share (basic), compared to net income
of $305.9 million, or $1.32 per share (basic), in the same period in
2022. Adjusted net income(1) for the third quarter of
2023 was $137.2 million, or
$0.65 per share (basic), compared to
$207.9 million, or $0.90 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 lower realized commodity
prices and production during the third quarter of 2023.
Enerplus' third quarter 2023 realized Bakken crude oil price
differential was $0.20 per barrel
above WTI, compared to $2.41 per
barrel above WTI in the third quarter of 2022. Bakken crude oil
prices have weakened in the fourth quarter due to increased basin
production and lower seasonal refinery demand resulting from
planned maintenance outages. Consequently, Enerplus expects its
2023 realized Bakken crude oil price differential to average
$0.25 per barrel below WTI, compared
to at par with WTI previously.
The Company's realized Marcellus natural gas price differential
widened to $1.24 per Mcf below NYMEX
during the third quarter of 2023, compared to $0.99 per Mcf below NYMEX in the third quarter of
2022. As a result of the weaker pricing, Enerplus has revised its
full-year 2023 Marcellus natural gas price differential to
$0.85 per Mcf below NYMEX, from
$0.75 per Mcf below NYMEX
previously.
In the third quarter of 2023, Enerplus' operating expenses were
$10.17 per BOE, compared to
$10.47 per BOE during the third
quarter of 2022. The Company continues to expect operating expenses
in the fourth quarter to increase compared to the third quarter due
to planned workover activity. Full-year operating expenses are
tracking the lower end of the previous guidance range. As a result,
Enerplus has revised its full-year 2023 operating expense guidance
to $10.75–$11.00 per BOE, from
$10.75–$11.50 per BOE.
Capital spending totaled $121.4
million in the third quarter of 2023.
Net debt was $212.1 million at
September 30, 2023 compared to
$199.6 million at June 30, 2023. The increase in net debt was
primarily due to the non-cash operating and investing working
capital deficit decreasing by approximately $85 million. A portion of this is expected to
reverse in the fourth quarter of 2023.
OPERATIONS
North Dakota production
averaged 77,702 BOE per day during the third quarter of 2023, an
increase of 13% compared to the prior quarter and 6% compared to
the same period a year ago. Enerplus drilled 15 gross operated
wells (80% working interest) during the third quarter and brought
19 operated wells (91% working interest) on production. The wells
were brought on production across three pads in Fort Berthold
Indian Reservation and one pad in Williams County.
Marcellus production averaged 145 MMcf per day during the third
quarter of 2023, a decrease of 12% compared to the same period in
2022 and 6% lower than the prior quarter. The reduced Marcellus
production reflects the limited capital activity directed to the
asset in 2023 following the lower natural gas price environment
compared to 2022.
RETURN OF CAPITAL TO SHAREHOLDERS
In the third quarter, Enerplus returned $67.7 million to shareholders through the
repurchase of 3.3 million common shares under its normal course
issuer bid ("NCIB") at an average price of $16.85 per share and $12.6
million in dividends. During the nine months ended
September 30, 2023, a total of
$200.8 million was returned to
shareholders through dividends and share repurchases.
Subsequent to September 30, 2023
and up to November 1, 2023, Enerplus
repurchased 2.5 million common shares under its NCIB at an average
price of $16.65 per share, for total
consideration of $40.9 million.
The Board of Directors approved a fourth quarter dividend of
$0.06 per share to be paid in
December 2023, for shareholders of
record on November 30, 2023.
Based on current market conditions and the Company's low
financial leverage, Enerplus expects to continue to return
significant free cash flow to shareholders in 2024. Enerplus
anticipates its return of capital will equal approximately 70% of
free cash flow in 2024.
UPDATED GHG EMISSIONS TARGETS
Enerplus has made significant progress in reducing its GHG
emissions intensity through improved operational processes and
planning, and investment in emissions reduction projects. The
Company now expects to exceed its 2030 scope 1 and 2 emissions
intensity reduction target this year, representing an approximate
reduction of 40% from the 2021 baseline (and 55% from 2019).
Enerplus is also tracking ahead of its existing methane intensity
reduction targets in 2023, where it expects to achieve an
approximate 45% reduction from the 2021 baseline (and 65% from
2019).
As a result of the outperformance noted above, Enerplus is
revising its GHG and methane emissions intensity targets as
follows:
- Scope 1 GHG emissions intensity of 7 kg CO2e/BOE by 2030; an
approximate 60% reduction from 2023
- Scope 1 & 2 GHG emissions intensity of 13 kg CO2e/MBOE by
2030; an approximate 30% reduction from 2023
- Methane emissions intensity of 0.02 kg CH4/MBOE by 2030; an
approximate 45% reduction from 2023
In addition, Enerplus is endorsing the World Bank Zero Routine
Flaring by 2030 initiative and has established a flare intensity
target of less than 2% per thousand cubic feet of natural gas
produced by 2026.
2023 GUIDANCE UPDATE
Capital spending guidance in 2023 has been narrowed to
$520 to $540
million from the prior range of $510 to $550
million.
Annual production guidance has been revised to 98,000 to 99,000
BOE per day from the prior range of 94,500 to 98,500 BOE per day,
representing an increase of 2,000 BOE per day at the midpoint.
Annual liquids production guidance has been revised to 60,500 to
61,500 barrels per day from the prior range of 58,500 to 61,500
barrels per day, representing an increase of 1,000 barrels per day
at the midpoint.
Enerplus is providing fourth quarter 2023 production guidance of
95,000 to 99,000 BOE per day, including liquids production of
60,500 to 64,500 barrels per day.
A summary of the changes to Enerplus' 2023 guidance is provided
in the tables below.
2023 Guidance Summary
|
Updated
Guidance
|
Previous
Guidance
|
Capital
spending
|
$520 – 540
million
|
$510 – 550
million
|
Average total
production
|
98,000 – 99,000
BOE/day
|
94,500 – 98,500
BOE/day
|
Average liquids
production
|
60,500 – 61,500
bbls/day
|
58,500 – 61,500
bbls/day
|
Fourth quarter total
production
|
95,000 – 99,000
BOE/day
|
n/a
|
Fourth quarter liquids
production
|
60,500 – 64,500
bbls/day
|
n/a
|
Average production tax
rate
(% of net sales, before
transportation)
|
8% (No
change)
|
8 %
|
Operating
expense
|
$10.75 -
$11.00/BOE
|
$10.75 - $11.50/BOE
|
Transportation
expense
|
$4.05/BOE
|
$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
(No change)
|
3 - 4% 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)
|
$(0.25)/bbl
|
Par with WTI
|
Marcellus natural gas
sales price differential
(compared to last day
NYMEX natural gas)
|
$(0.85)/Mcf
|
$(0.75)/Mcf
|
(1) Excluding transportation
costs.
|
Q3 2023 Conference Call Details
A conference call hosted by Ian C.
Dundas, President and CEO will be held at 9:00 AM MT (11:00 AM
ET) on November 3, 2023, to
discuss these results. Details of the conference call are as
follows:
Date:
|
Friday, November 3,
2023
|
Time:
|
9:00 AM MT (11:00 AM
ET)
|
Dial-In:
|
1-888-390-0546 (Toll
Free)
|
Conference
ID:
|
18470310
|
Audiocast:
|
https://app.webinar.net/Vl8X1bX2M37
|
To ensure timely participation in the conference call, callers
are encouraged to join 15 minutes prior to the start time to
register for the event. A telephone replay will be available for 30
days following the conference call and can be accessed at the
following numbers:
Replay
Dial-In:
|
1-888-390-0541
(Toll Free)
|
Replay
Passcode:
|
470310 #
|
PRICE RISK MANAGEMENT
The following is a summary of Enerplus' financial commodity
hedging contracts at September 30,
2023 and positions entered into subsequent to September 30, 2023 and up to November 1, 2023.
|
|
WTI Crude Oil
($/bbl)(1)(2)
|
|
NYMEX Natural Gas
($/Mcf)(2)
|
|
|
Oct 1, 2023 –
Dec 31, 2023
|
|
Jan 1, 2024 –
Jun 30, 2024
|
|
Oct 1, 2023
– Oct 31, 2023
|
Swaps
|
|
|
|
|
|
|
Volume
(bbls/day)
|
|
10,000
|
|
–
|
|
–
|
Brent - WTI
Spread
|
|
$ 5.47
|
|
–
|
|
–
|
|
|
|
|
|
|
|
3 Way
Collars
|
|
|
|
|
|
|
Volume
(bbls/day)
|
|
10,000
|
|
5,000
|
|
–
|
Sold Puts
|
|
$ 65.00
|
|
$ 65.00
|
|
–
|
Purchased
Puts
|
|
$ 81.00
|
|
$ 77.00
|
|
–
|
Sold Calls
|
|
$ 111.58
|
|
$ 95.00
|
|
–
|
|
|
|
|
|
|
|
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 our outstanding crude oil contracts is
$1.19/bbl from October 1, 2023 – June 30, 2024.
|
(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.
|
THIRD QUARTER 2023 PRODUCTION AND OPERATIONAL SUMMARY
TABLES
Summary of Average Daily Production(1)
|
Three Months Ended
September 30, 2023
|
|
Nine Months Ended
September 30, 2023
|
|
|
Williston
Basin
|
Marcellus
|
Other(2)
|
Total
|
|
Williston
Basin
|
Marcellus
|
Other(2)
|
Total
|
Tight oil
(bbl/d)
|
53,002
|
-
|
1,193
|
54,195
|
|
48,815
|
-
|
875
|
49,690
|
|
Total crude oil
(bbl/d)
|
53,002
|
-
|
1,193
|
54,195
|
|
48,815
|
-
|
875
|
49,690
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas liquids
(bbl/d)
|
12,347
|
-
|
83
|
12,430
|
|
10,774
|
-
|
97
|
10,871
|
|
|
|
|
|
|
|
|
|
|
|
|
Shale gas
(Mcf/d)
|
74,120
|
144,523
|
758
|
219,401
|
|
69,299
|
159,509
|
783
|
229,591
|
|
Total natural gas
(Mcf/d)
|
74,120
|
144,523
|
758
|
219,401
|
|
69,299
|
159,509
|
783
|
229,591
|
|
Total production
(BOE/d)
|
77,702
|
24,087
|
1,403
|
103,192
|
|
71,139
|
26,585
|
1,102
|
98,826
|
|
(1)
|
Table may not add due
to rounding.
|
(2)
|
Largely comprises the
DJ Basin.
|
Summary of Wells Drilled(1)
|
Three months
ended September 30, 2023
|
|
Nine months
ended
September 30, 2023
|
|
Operated
|
|
Non-Operated
|
|
Operated
|
|
Non-Operated
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
Williston
Basin
|
15
|
12.0
|
|
11
|
0.5
|
|
46
|
39.6
|
|
66
|
7.0
|
Marcellus
|
-
|
-
|
|
14
|
0.4
|
|
-
|
-
|
|
40
|
0.8
|
DJ Basin
|
-
|
-
|
|
-
|
-
|
|
3
|
2.9
|
|
-
|
-
|
Total
|
15
|
12.0
|
|
25
|
0.9
|
|
49
|
42.5
|
|
106
|
7.7
|
(1) Table may not add due to
rounding.
|
Summary of Wells Brought On-Stream(1)
|
Three months
ended
September 30, 2023
|
|
Nine months
ended
September 30, 2023
|
|
Operated
|
|
Non-Operated
|
|
Operated
|
|
Non-Operated
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
Williston
Basin
|
19
|
17.2
|
|
26
|
3.3
|
|
46
|
40.0
|
|
40
|
6.5
|
Marcellus
|
-
|
-
|
|
1
|
0.0
|
|
-
|
-
|
|
22
|
0.3
|
DJ Basin
|
3
|
2.9
|
|
-
|
-
|
|
3
|
2.9
|
|
10
|
0.2
|
Total
|
22
|
20.2
|
|
27
|
3.3
|
|
49
|
43.0
|
|
72
|
7.0
|
(1) Table may not add due to
rounding.
|
|
|
Three months
ended
|
|
Nine months
ended
|
SELECTED FINANCIAL RESULTS
|
|
September 30,
|
|
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Financial (US$,
thousands, except ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(Loss)
|
|
$
|
127,655
|
|
$
|
305,945
|
|
$
|
339,374
|
|
$
|
583,594
|
Adjusted Net
Income(1)
|
|
|
137,184
|
|
|
207,913
|
|
|
362,317
|
|
|
525,992
|
Cash Flow from
Operating Activities
|
|
|
212,245
|
|
|
409,946
|
|
|
640,244
|
|
|
856,798
|
Adjusted Funds
Flow
|
|
|
263,684
|
|
|
355,622
|
|
|
720,717
|
|
|
914,910
|
Dividends to
Shareholders - Declared
|
|
|
12,612
|
|
|
11,516
|
|
|
36,361
|
|
|
29,374
|
Net Debt
|
|
|
212,072
|
|
|
391,059
|
|
|
212,072
|
|
|
391,059
|
Capital
Spending
|
|
|
121,354
|
|
|
114,459
|
|
|
440,943
|
|
|
346,357
|
Property and Land
Acquisitions
|
|
|
2,275
|
|
|
16,252
|
|
|
5,661
|
|
|
19,662
|
Property and Land
Divestments
|
|
|
1,563
|
|
|
4,214
|
|
|
1,702
|
|
|
19,386
|
Net Debt to Adjusted
Funds Flow Ratio
|
|
|
0.2x
|
|
|
0.3x
|
|
|
0.2x
|
|
|
0.3x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial per
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss) -
Basic
|
|
$
|
0.61
|
|
$
|
1.32
|
|
$
|
1.59
|
|
$
|
2.47
|
Net Income/(Loss) -
Diluted
|
|
|
0.59
|
|
|
1.28
|
|
|
1.54
|
|
|
2.40
|
Weighted Average Number
of Shares Outstanding (000's) - Basic
|
|
|
210,337
|
|
|
231,565
|
|
|
213,621
|
|
|
237,835
|
Weighted Average Number
of Shares Outstanding (000's) - Diluted
|
|
|
216,857
|
|
|
239,136
|
|
|
220,093
|
|
|
245,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial
Results per BOE(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil &
Natural Gas Sales(4)
|
|
$
|
48.65
|
|
$
|
66.90
|
|
$
|
45.44
|
|
$
|
67.38
|
Commodity Derivative
Instruments
|
|
|
0.56
|
|
|
(8.92)
|
|
|
1.99
|
|
|
(11.19)
|
Operating
Expenses
|
|
|
(10.17)
|
|
|
(10.47)
|
|
|
(10.32)
|
|
|
(10.10)
|
Transportation
Costs
|
|
|
(3.87)
|
|
|
(4.16)
|
|
|
(4.04)
|
|
|
(4.29)
|
Production
Taxes
|
|
|
(4.21)
|
|
|
(4.86)
|
|
|
(3.65)
|
|
|
(4.76)
|
General and
Administrative Expenses
|
|
|
(1.27)
|
|
|
(1.10)
|
|
|
(1.31)
|
|
|
(1.18)
|
Cash Share-Based
Compensation
|
|
|
(0.20)
|
|
|
(0.12)
|
|
|
(0.04)
|
|
|
(0.13)
|
Interest, Foreign
Exchange and Other Expenses
|
|
|
(0.40)
|
|
|
(0.61)
|
|
|
(0.36)
|
|
|
(0.64)
|
Current Income Tax
Expense
|
|
|
(1.32)
|
|
|
(0.80)
|
|
|
(1.00)
|
|
|
(0.93)
|
Adjusted Funds
Flow
|
|
$
|
27.77
|
|
$
|
35.86
|
|
$
|
26.71
|
|
$
|
34.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
SELECTED OPERATING RESULTS
|
|
September 30,
|
|
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Average Daily
Production(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil
(bbls/day)
|
|
|
54,195
|
|
|
57,482
|
|
|
49,690
|
|
|
51,146
|
Natural Gas Liquids
(bbls/day)
|
|
|
12,430
|
|
|
10,900
|
|
|
10,871
|
|
|
9,319
|
Natural Gas
(Mcf/day)
|
|
|
219,401
|
|
|
236,558
|
|
|
229,591
|
|
|
225,845
|
Total
(BOE/day)
|
|
|
103,192
|
|
|
107,808
|
|
|
98,826
|
|
|
98,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Crude Oil and Natural
Gas Liquids
|
|
|
65 %
|
|
|
63 %
|
|
|
61 %
|
|
|
62 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Selling
Price(3)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil
(per bbl)
|
|
$
|
82.66
|
|
$
|
92.48
|
|
$
|
77.50
|
|
$
|
97.44
|
Natural Gas Liquids
(per bbl)
|
|
|
19.21
|
|
|
32.04
|
|
|
18.36
|
|
|
34.13
|
Natural Gas
(per Mcf)
|
|
|
1.37
|
|
|
6.53
|
|
|
1.91
|
|
|
5.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Wells
Drilled
|
|
|
12.9
|
|
|
9.0
|
|
|
50.2
|
|
|
40.2
|
(1)
|
This non‑GAAP measure
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
|
|
September 30, 2023
|
|
December 31, 2022
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
46,205
|
|
$
|
38,000
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
|
305,991
|
|
|
276,590
|
Other current
assets
|
|
|
57,332
|
|
|
56,552
|
Derivative financial
assets
|
|
|
2,047
|
|
|
36,542
|
|
|
|
411,575
|
|
|
407,684
|
Property, plant and
equipment:
|
|
|
|
|
|
|
Crude oil and natural
gas properties (full cost method)
|
|
|
1,520,074
|
|
|
1,322,904
|
Other capital
assets
|
|
|
9,501
|
|
|
10,685
|
Property, plant and
equipment
|
|
|
1,529,575
|
|
|
1,333,589
|
Other long-term
assets
|
|
|
7,028
|
|
|
21,154
|
Right-of-use
assets
|
|
|
21,117
|
|
|
20,556
|
Deferred income tax
asset
|
|
|
143,123
|
|
|
154,998
|
Total
Assets
|
|
$
|
2,112,418
|
|
$
|
1,937,981
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
375,806
|
|
$
|
398,482
|
Current portion of
long-term debt
|
|
|
80,600
|
|
|
80,600
|
Derivative financial
liabilities
|
|
|
7,324
|
|
|
10,421
|
Current portion of
lease liabilities
|
|
|
11,655
|
|
|
13,664
|
|
|
|
475,385
|
|
|
503,167
|
Long-term
debt
|
|
|
177,677
|
|
|
178,916
|
Asset retirement
obligation
|
|
|
117,903
|
|
|
114,662
|
Lease
liabilities
|
|
|
11,502
|
|
|
9,262
|
Deferred income tax
liability
|
|
|
114,069
|
|
|
55,361
|
Total
Liabilities
|
|
|
896,536
|
|
|
861,368
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
Share capital –
authorized unlimited common shares, no par value
Issued and outstanding:
September 30, 2023 – 208 million shares
December 31, 2022 – 217 million shares
|
|
|
2,745,597
|
|
|
2,837,329
|
Paid-in
capital
|
|
|
43,887
|
|
|
50,457
|
Accumulated
deficit
|
|
|
(1,272,261)
|
|
|
(1,509,832)
|
Accumulated other
comprehensive loss
|
|
|
(301,341)
|
|
|
(301,341)
|
|
|
|
1,215,882
|
|
|
1,076,613
|
Total Liabilities
& Shareholders' Equity
|
|
$
|
2,112,418
|
|
$
|
1,937,981
|
Condensed Consolidated Statements of Income/(Loss) and
Comprehensive Income/(Loss)
|
Three months
ended
|
Nine months
ended
|
|
September 30,
|
|
September 30,
|
(US$ thousands,
except per share amounts) unaudited
|
|
2023
|
|
2022
|
|
2023
|
2022
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil and natural
gas sales
|
|
$
|
461,836
|
|
$
|
663,532
|
|
$
|
1,225,957
|
|
$
|
1,804,701
|
Commodity derivative
instruments gain/(loss)
|
|
|
(14,602)
|
|
|
56,995
|
|
|
20,324
|
|
|
(197,368)
|
|
|
|
447,234
|
|
|
720,527
|
|
|
1,246,281
|
|
|
1,607,333
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
96,573
|
|
|
103,841
|
|
|
278,493
|
|
|
270,451
|
Transportation
|
|
|
36,745
|
|
|
41,312
|
|
|
108,946
|
|
|
114,949
|
Production
taxes
|
|
|
39,959
|
|
|
48,169
|
|
|
98,847
|
|
|
127,351
|
General and
administrative
|
|
|
18,862
|
|
|
15,745
|
|
|
53,368
|
|
|
48,013
|
Depletion, depreciation
and accretion
|
|
|
91,825
|
|
|
82,225
|
|
|
264,051
|
|
|
219,006
|
Interest
|
|
|
4,832
|
|
|
6,471
|
|
|
12,742
|
|
|
18,624
|
Foreign exchange
(gain)/loss
|
|
|
641
|
|
|
16,109
|
|
|
(250)
|
|
|
13,764
|
Other
expense/(income)
|
|
|
(7,935)
|
|
|
(368)
|
|
|
(6,873)
|
|
|
12,020
|
|
|
|
281,502
|
|
|
313,504
|
|
|
809,324
|
|
|
824,178
|
Income/(Loss) Before
Taxes
|
|
|
165,732
|
|
|
407,023
|
|
|
436,957
|
|
|
783,155
|
Current income tax
expense/(recovery)
|
|
|
12,500
|
|
|
7,929
|
|
|
27,000
|
|
|
24,929
|
Deferred income tax
expense/(recovery)
|
|
|
25,577
|
|
|
93,149
|
|
|
70,583
|
|
|
174,632
|
Net
Income/(Loss)
|
|
$
|
127,655
|
|
$
|
305,945
|
|
$
|
339,374
|
|
$
|
583,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain/(loss)
on foreign currency translation
|
|
|
—
|
|
|
28,582
|
|
|
—
|
|
|
29,939
|
Foreign exchange
gain/(loss) on net investment hedge, net
of tax
|
|
|
—
|
|
|
(24,276)
|
|
|
—
|
|
|
(32,995)
|
Total Comprehensive
Income/(Loss)
|
|
$
|
127,655
|
|
$
|
310,251
|
|
$
|
339,374
|
|
$
|
580,538
|
Net Income/(Loss)
per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.61
|
|
$
|
1.32
|
|
$
|
1.59
|
|
$
|
2.47
|
Diluted
|
|
$
|
0.59
|
|
$
|
1.28
|
|
$
|
1.54
|
|
$
|
2.40
|
Condensed Consolidated Statements of Cash Flows
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September 30,
|
|
September 30,
|
(US$ thousands) unaudited
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
|
127,655
|
|
$
|
305,945
|
|
$
|
339,374
|
|
$
|
583,594
|
Non-cash items
add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation
and accretion
|
|
|
91,825
|
|
|
82,225
|
|
|
264,051
|
|
|
219,006
|
Changes in fair value
of derivative instruments
|
|
|
19,924
|
|
|
(145,480)
|
|
|
33,515
|
|
|
(103,423)
|
Deferred income tax
expense/(recovery)
|
|
|
25,577
|
|
|
93,149
|
|
|
70,583
|
|
|
174,632
|
Unrealized foreign
exchange (gain)/loss on working capital
|
|
|
679
|
|
|
16,997
|
|
|
(33)
|
|
|
14,876
|
Share-based
compensation and general and administrative
|
|
|
4,881
|
|
|
3,665
|
|
|
16,869
|
|
|
13,959
|
Other
expense/(income)
|
|
|
(5,411)
|
|
|
(289)
|
|
|
(2,322)
|
|
|
12,267
|
Amortization of debt
issuance costs
|
|
|
388
|
|
|
366
|
|
|
1,176
|
|
|
1,070
|
Translation of U.S.
dollar cash held in parent company
|
|
|
—
|
|
|
(956)
|
|
|
—
|
|
|
(1,071)
|
Investing activities in
Other income
|
|
|
(1,834)
|
|
|
—
|
|
|
(2,496)
|
|
|
—
|
Asset retirement
obligation settlements
|
|
|
(2,448)
|
|
|
(1,560)
|
|
|
(11,318)
|
|
|
(12,704)
|
Changes in non-cash
operating working capital
|
|
|
(48,991)
|
|
|
55,884
|
|
|
(69,155)
|
|
|
(45,408)
|
Cash flow from/(used
in) operating activities
|
|
|
212,245
|
|
|
409,946
|
|
|
640,244
|
|
|
856,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawings
from/(repayment of) bank credit facilities
|
|
|
42,172
|
|
|
(130,315)
|
|
|
79,361
|
|
|
(186,015)
|
Repayment of senior
notes
|
|
|
(21,000)
|
|
|
(21,000)
|
|
|
(80,600)
|
|
|
(100,600)
|
Purchase of common
shares under Normal Course Issuer Bid
|
|
|
(55,127)
|
|
|
(111,800)
|
|
|
(164,465)
|
|
|
(241,935)
|
Share-based
compensation – tax withholdings settled in cash
|
|
|
(50)
|
|
|
—
|
|
|
(16,470)
|
|
|
(11,567)
|
Dividends
|
|
|
(12,612)
|
|
|
(11,516)
|
|
|
(36,361)
|
|
|
(29,374)
|
Cash flow from/(used
in) financing activities
|
|
|
(46,617)
|
|
|
(274,631)
|
|
|
(218,535)
|
|
|
(569,491)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and office
expenditures
|
|
|
(170,635)
|
|
|
(121,382)
|
|
|
(439,440)
|
|
|
(311,449)
|
Canadian
divestments
|
|
|
15,128
|
|
|
—
|
|
|
27,362
|
|
|
—
|
Property and land
acquisitions
|
|
|
(2,275)
|
|
|
(16,252)
|
|
|
(5,661)
|
|
|
(19,662)
|
Property and land
divestments
|
|
|
1,563
|
|
|
4,214
|
|
|
4,202
|
|
|
6,333
|
Cash flow from/(used
in) investing activities
|
|
|
(156,219)
|
|
|
(133,420)
|
|
|
(413,537)
|
|
|
(324,778)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(679)
|
|
|
14,884
|
|
|
33
|
|
|
18,308
|
Change in cash and cash
equivalents
|
|
|
8,730
|
|
|
16,779
|
|
|
8,205
|
|
|
(19,163)
|
Cash and cash
equivalents, beginning of period
|
|
|
37,475
|
|
|
25,406
|
|
|
38,000
|
|
|
61,348
|
Cash and cash
equivalents, end of period
|
|
$
|
46,205
|
|
$
|
42,185
|
|
$
|
46,205
|
|
$
|
42,185
|
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
Readers are encouraged 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.
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.
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;
fourth quarter 2023 production 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, including the timing
and amounts thereof; expectations regarding the number of net
operated wells brought on production during the remainder 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 targets and its flare intensity target and the timing
thereof; methane emissions targets and expectations; 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; capital
spending 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; 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 0.72. 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 third 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' third
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
September 30,
|
|
($ millions)
|
|
2023
|
|
2022
|
|
Net
income/(loss)
|
|
$
|
127.7
|
|
$
|
305.9
|
|
Unrealized derivative
instrument, foreign exchange and marketable securities
(gain)/loss
|
|
|
15.6
|
|
|
(128.5)
|
|
Other expense/(income)
related to investing activities
|
|
|
(1.4)
|
|
|
-
|
|
Tax effect on above
items
|
|
|
(4.7)
|
|
|
30.5
|
|
Adjusted net
income/(loss)
|
|
$
|
137.2
|
|
$
|
207.9
|
|
Adjusted net
income/(loss) per share (basic)
|
|
$
|
0.65
|
|
$
|
0.90
|
|
"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
September 30,
|
($ millions)
|
2023
|
|
2022
|
Cash flow from/(used
in) operating activities
|
$
|
212.2
|
|
$
|
409.9
|
Asset retirement
obligation settlements
|
|
2.5
|
|
|
1.6
|
Changes in non-cash
operating working capital
|
|
49.0
|
|
|
(55.9)
|
Adjusted funds
flow
|
$
|
263.7
|
|
$
|
355.6
|
Capital
spending
|
|
(121.4)
|
|
|
(114.5)
|
Free cash
flow
|
$
|
142.3
|
|
$
|
241.1
|
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