Bullboard - Stock Discussion Forum Enerplus Corp T.ERF

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Enerplus Corporation is a Canada-based independent oil and gas exploration and production company. The Company is focused on the development of North American oil and natural gas assets. Its portfolio includes light oil assets in the Bakken, North Dakota, and a position in the Marcellus natural gas shale region in northeast Pennsylvania. The Company's operations are concentrated in the core of... see more

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Post by retiredcf on Sep 15, 2022 9:46am

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September 14, 2022

Enerplus Corporation Highlights from RBC Desk Presentation

NYSE: ERF | USD 15.36 | Outperform | Price Target USD 20.00

Sentiment: Neutral

Enerplus Corporation (NYSE: ERF – Outperform) presented yesterday to RBC Capital Markets’ Sales & Trading team, with Ian Dundas (President & CEO), Jodi Jenson Labrie (SVP & CFO) and Drew Mair (Manager, Investor Relations & Corporate Planning) in attendance.

In one line: Enerplus remains our favorite intermediate producer given its capable leadership team, solid operational delivery, strong balance sheet and rising shareholder returns.

Enerplus is on our Global Energy Best Ideas list. For our latest thoughts on Enerplus, please see Update with Ian Dundas.

Highlights from the company’s presentation are as follows:

Enerplus is confident that it will achieve its targeted 15% sequential oil & liquids production growth in the third-quarter, highlighting strong year-to-date well performance in comparison to its 2019-21 average.
Enerplus pointed towards 670 drilling locations in its core/extended core areas of the Bakken – over 10 years of inventory at the 1.5-2.0 rig development pace factored into its five-year (2022-26) plan. For a thorough run-down of the company’s North Dakota operations, please see Advantaged Basin--Advantaged Position.
Currently, Enerplus’ all-in D&C cost (including infrastructure) in North Dakota is running just above $6.5 million per well, and will likely move to $7.0 million or so in 2023.
The company pointed toward sustaining capital of $425 million (40-45 wells) in 2023 amid a 30% corporate decline rate.
Enerplus recently hedged 120 mmcf/d of its natural gas production (a large portion of its Marcellus gas production) this winter (November 2022-March 2023) via a costless collar (approximately $6 x $18). The motivation to do this partly reflects the company’s objective to protect a portion of its Marcellus cash flow.
Enerplus is always open to adding quality scale to its operations but noted that any potential acquisitions must compete with its organic opportunities. The Bakken is Enerplus’ first choice for any possible acquisition.
Enerplus indicated that it continues to advance initiatives to sell its remaining Canadian assets in Alberta and Saskatchewan (which support net production of circa 3,000 boe/d, 99% oil), but remains focused on value.
Enerplus continues to see significant value in its common shares at current levels. The company repurchased $38.4 million worth of its common shares in July and another $18.8 million in August. Alongside its second-quarter results, the company raised its minimum 2022 return of capital commitment by 21% to $425 million, and increased its return of capital commitment to at least 60% (up from 50%) of free cash flow commencing in the second-half of 2022 through 2023.