TSX:ERF - Post Discussion
Post by
retiredcf on Nov 04, 2022 9:46am
RBC
November 3, 2022
Enerplus Corporation Quick Take 3Q—A Dandy Quarter
NYSE: ERF | USD 17.25 | Outperform | Price Target USD 19.00
Sentiment: Positive
Enerplus’ third-quarter results (see table below) were above Street consensus on FFO/share and production volumes, while in line on capital spending. In conjunction with its third-quarter results, Enerplus provided a favorable guidance update and boosted its quarterly dividend by 10%.
Conference call
• Time: 11:00 am ET, Friday, November 4
• (888) 390-0546 (Conference ID: 58265396) • Replay:
• (888) 390-0541 (Passcode: 265396 #)
2Key points
• Enerplus reported third-quarter production of 107,800 boe/d – 3% above our expectation. Oil & liquids production of 68,400 bbl/d was up 20% sequentially (vs. our expectation of 15%). Enerplus expects similar total production levels of approximately 107,500 boe/d in the fourth quarter.
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Williston Basin production averaged 73,200 boe/d during the quarter, up 25% sequentially.
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Marcellus production averaged 165 mmcf/d during the quarter, down 2% sequentially.
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Enerplus’ net debt stood at $391 million as of September 30, a reduction of approximately 28% since June 30.
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The company returned approximately $123.3 million to shareholders in the third quarter, having paid $11.5 million in dividends
and repurchasing 7.9 million common shares for $111.8 million (avg. price of $14.13 per share). Subsequent to quarter-end and
up to November 2, Enerplus repurchased 2.7 million common shares for about $43.7 million (avg. price of $16.00 per share).
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Third-quarter opex was $10.47/boe (3% above our estimate of $10.16/boe).
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Enerplus recently announced the sale of its remaining Canadian assets (3,000 boe/d, 99% crude oil) in Alberta and Saskatchewan
to Surge Energy for a total consideration of C$245 million ($180 million).
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Cash taxes of $8 million during the quarter were below our outlook of $12 million ($0.02/share impact).
2022 Guidance
• Enerplus slightly increased their midpoint 2022 production outlook by 875 boe/d (1%) to 100,375 boe/d, despite asset sales this year.
• Enerplus increased its 2022 midpoint liquids production guidance to 62,000 bbl/d, up 2% from 61,000 bbl/d previously.
• Enerplus refined its 2022 capital spending guidance to $430 million, within its prior guidance range of $400-$440 million. • Enerplus also increased its Bakken crude oil price differential guidance to $1.25/bbl above WTI (previously $1.00/bbl).
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