Enerplus Reiterates 2012 Production Growth Outlook and Announces Reduction in Dividend
12 June 2012 - 9:01PM
PR Newswire (Canada)
CALGARY, June 12, 2012 /CNW/ - Enerplus Corporation ("Enerplus")
today reiterated production growth targets for 2012. We
continue to expect to deliver 10% organic production growth through
a capital spending program designed to increase crude oil
production significantly throughout the year and preserve the value
of our core natural gas assets for the future. Approximately 70% of
our forecasted $800 million capital spending in 2012 is weighted to
crude oil and natural gas liquids projects. Approximately 40%
of this capital is being directed to our light crude oil assets in
the North Dakota region where production is expected to double by
year end. We will continue to invest with our partners in the
Marcellus shale gas play, which we believe is one of the best
natural gas plays in North America. Our focus is to preserve our
lease interests and retain the value of this significant asset for
the future. We continue to pursue the monetization or joint venture
of a portion of our strategic undeveloped land base. Over the
past three years, we have amassed over 170,000 net acres of
strategic land in the Montney and Duvernay as well as our operated
acreage in the Marcellus that contains significant future drilling
potential. Along with the sale of our equity portfolio,
we expect that we could generate $250 - $500 million of proceeds
over the next 12 - 18 months that will help fund our future growth
strategies. Despite our operational success year-to-date, commodity
prices have weakened and resulted in lower forecast cash
flows. While our balance sheet is currently strong and we
have significant liquidity with respect to our credit capacity, we
are reducing our monthly dividend from CDN$0.18 per share to
CDN$0.09 per share. We believe this reduction will strike a
better balance between yield and growth, allowing continued
investment into our asset base in a more sustainable manner. We
remain committed to a strategy that provides investors with a
dividend and growth investment. As stated, the new dividend amount
of CDN$0.09 per share will be effective with the July payment and
will not impact the dividend payable on June 20, 2012. Gordon J.
Kerr President & Chief Executive Officer Enerplus Corporation
Currency, BOE and Operational Information All dollar amounts or
references to "$" in this news release are in Canadian dollars
unless specified otherwise. Enerplus has adopted the standard
of 6 Mcf:1 BOE when converting natural gas to BOEs. BOEs may be
misleading particularly if used in isolation. A BOE conversion
ratio of 6 Mcf:1 BOE is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. Given that the value
ratio based on the current price of crude oil as compared to
natural gas is significantly different from the energy equivalency
of 6:1, utilizing a conversion on a 6:1 basis may be misleading as
an indication of value. Unless otherwise stated, all oil and gas
production information and estimates are presented on a gross
basis, before deducting royalty interests. Cautionary Note
Regarding Forward-Looking Information and Statements This news
release contains certain forward-looking information and statements
(collectively, "forward-looking information") within the meaning of
applicable securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "budget", "guidance",
"objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends", "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 and statements pertaining to
the following: future capital spending amounts (including capital
carry commitments), the timing and locations of such spending and
the types of projects on which such capital will be spent; future
growth in production, reserves and cash flow and other anticipated
growth opportunities; a financing strategy to fund anticipated
capital expenditures, future oil, natural gas liquids and natural
gas prices and production levels (including anticipated 2012
average daily and exit production rates), the product mix and
sources of such production, and production decline rates; future
drilling activities and results and undeveloped land acquisitions;
future capital efficiencies, corporate netbacks and cash flow
levels; rates of return from our investments; the expected ultimate
recovery of oil or gas from a particular well; well drilling costs,
operating costs, general and administrative expenses and royalty
expenses; sales of our equity portfolio and our non-core properties
and the redeployment of proceeds realized therefrom; dividend
payments made by Enerplus and the related adjusted payout ratio;
the timing and payment of future taxes; our planned commodity risk
management program; and future liquidity, debt levels and financial
capacity and resources. The forward-looking information contained
in this news release reflect several material factors and
expectations and assumptions of Enerplus including, without
limitation: that Enerplus will achieve operational, production and
drilling results as anticipated; anticipated production decline
rates; the general continuance of current or, where applicable,
assumed industry conditions; commodity prices will remain within
Enerplus' expected range of forecast prices, being the current
forward market prices; availability of adequate cash flow, debt
and/or equity sources to fund Enerplus' capital and operating
requirements as needed and to pay dividends to shareholders as
anticipated; the continuance of existing and, in certain
circumstances, proposed tax and royalty regimes; availability of
willing buyers for the investments and properties proposed to be
disposed of; that capital, operating, financing and third party
service provider costs will not exceed Enerplus' current
expectations; availability of third party service providers
(including drilling rigs and service crews) and cooperation of
industry partners; certain foreign exchange rate and other cost
assumptions; and that all conditions and approvals necessary to
complete anticipated financing activities will be satisfied or
obtained. Enerplus believes the material factors, expectations and
assumptions reflected in the forward-looking information are
reasonable at this time but no assurance can be given that these
factors, expectations and assumptions will prove to be correct. 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: changes
in commodity prices; unanticipated operating or drilling results or
production declines; potential redeployment of available funding to
alternative projects; changes in tax or environmental laws or
royalty rates; failure to receive required regulatory or third
party approvals or to satisfy conditions required for financings;
increased debt levels or debt service requirements; insufficient
available cash to pay dividends as currently anticipated;
inaccurate estimation of or changes to estimates of Enerplus' oil
and gas reserve and resource volumes and the assumptions relating
thereto; limited, unfavourable or no access to debt or equity
capital markets; increased costs and expenses; a shortage of third
party service providers; the impact of competitors; reliance on
industry partners; an inability to agree to terms with potential
buyers of investments or assets that may be disposed of; and
certain other risks detailed from time to time in Enerplus' public
disclosure documents including, without limitation, those risks
identified in our MD&A for the year ended December 31, 2011 and
in Enerplus' Annual Information Form dated March 9, 2012 for
the year ended December 31, 2011, copies of which are available on
Enerplus' SEDAR profile at www.sedar.com and which also form part
of Enerplus' annual report on Form 40-F for the year ended December
31, 2011 filed with the United States Securities and Exchange
Commission, a copy of which is available at www.sec.gov. The
forward-looking information contained in this news release speaks
only as of the date of this news release, and Enerplus assumes no
obligation to publicly update or revise such information to reflect
new events or circumstances, except as may be required pursuant to
applicable laws. Any financial outlook or future oriented financial
information in this news release, as defined by applicable
securities legislation, has been approved by management of
Enerplus. Such financial outlook or future oriented financial
information is provided for the purpose of providing information
about management's reasonable expectations as to the anticipated
results of its proposed business activities for 2012. Readers are
cautioned that reliance on such information may not be appropriate
for other purposes. Enerplus Corporation CONTACT: please call
1-800-319-6462 or e-mailinvestorrelations@enerplus.com.
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