All financial information contained within this news release
has been prepared in accordance with U.S. GAAP, except as noted
under "Non-GAAP Measures". 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. A full copy of Enerplus' Second Quarter 2016
Financial Statements and MD&A are available on the Company's
website at www.enerplus.com, under its SEDAR profile at
www.sedar.com and on the EDGAR website at
www.sec.gov.
CALGARY, Aug. 5, 2016 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX & NYSE: ERF) is pleased to
announce its results from operations for the second quarter of
2016.
"We have significantly strengthened our balance sheet
having reduced our debt, net of cash, by 45% since year-end 2015.
In addition, we continue to drive costs lower as we position our
company to deliver profitable growth in a lower commodity price
environment," stated Ian C. Dundas,
President & CEO. "Enerplus continues to perform at a high level
operationally, and with our lower cost structure and improved
financial strength we are modestly increasing our 2016 capital
program in North Dakota as we
position the company for growth in 2017."
KEY TAKEAWAYS:
- Production averaged 93,659 BOE per day during the quarter,
including 43,908 barrels per day of crude oil and natural gas
liquids. Annual average 2016 production is tracking the higher-end
of Enerplus' guidance range of 90,000 – 94,000 BOE per day, despite
the divestment of approximately 2,300 BOE per day at the end of the
second quarter, largely due to strong Marcellus production. As a
result, Enerplus is updating its 2016 average production guidance
to 92,000 – 94,000 BOE per day. Crude oil and natural gas liquids
production guidance remains unchanged at 43,000 – 45,000 barrels
per day.
- Enerplus has significantly strengthened its balance sheet in
2016. The receipt of divestment proceeds of $280.5 million year to date and net equity
financing proceeds of $220.4 million,
have helped reduce the Company's total debt net of cash by 45%
since December 31, 2015. At
June 30, 2016, Enerplus had
$723.3 million of senior notes
outstanding and $49.2 million in
cash, and the Company's $800 million
bank credit facility was undrawn. At June
30, 2016, Enerplus' senior debt to adjusted EBITDA ratio was
1.2 times and debt to funds flow ratio was 2.0 times.
- Enerplus continued to deliver significant cost savings during
the second quarter including a reduction in cash costs comprising
operating, transportation, G&A and interest of $1.68 per BOE compared to the same period in
2015.
- Operating costs were $7.10 per
BOE in the quarter, 10% lower than the same period in 2015 and
below the Company's annual guidance of $8.50 per BOE as a result of continued cost
reductions and the divestment of higher operating cost properties.
Cash G&A expenses were $1.71 per
BOE in the second quarter, 16% lower than the same period in 2015
and below the Company's annual guidance of $2.00 per BOE primarily due to a reduction in
staffing levels. Based on this performance, Enerplus is reducing
its 2016 guidance for operating expenses to $7.90 per BOE and cash G&A expenses to
$1.95 per BOE.
- Enerplus recorded a net loss of $168.6
million or ($0.77) per share
in the second quarter, which is attributable to non-cash items
including an impairment charge and a deferred tax asset valuation
allowance as a result of the continued decline in the twelve month
trailing average commodity prices.
- Enerplus generated second quarter funds flow of $76.0 million, an increase of 82% from the
previous quarter. The increased funds flow was driven by higher
crude oil prices, improved commodity price differentials and lower
cash costs.
- Enerplus' realized pricing differentials in the Bakken and
Marcellus have meaningfully improved over the past year. Although
in part this is due to lower benchmark prices, improvements in the
supply-demand balance in each basin have also contributed to the
tighter differentials. Compared to the same period in 2015,
Enerplus' second quarter realized Bakken differential narrowed by
US$1.07 per barrel to US$8.23 per barrel below WTI, and Enerplus'
second quarter realized Marcellus differential narrowed by
US$0.63 per Mcf averaging
US$0.76 per Mcf below NYMEX.
- Capital spending in the second quarter was $48.1 million of which $30.4 million was directed to North Dakota. As a result of Enerplus'
stronger financial position and lower cost structure, which is
driving margin improvement, the Company is increasing its 2016
capital spending guidance to $215
million from $200 million to
add three gross completions and pre-order facilities equipment in
North Dakota during the latter
part of the year for the 2017 program. The incremental expenditure
will allow Enerplus to further test well downspacing in Fort
Berthold, and is expected to add approximately 1,000 BOE per day to
Enerplus' fourth quarter production volumes and better position the
Company for growth in 2017. Enerplus continues to expect its 2016
capital and dividend commitments to be fully funded through
internally generated cash flow at current forward strip commodity
prices.
ASSET ACTIVITY
North Dakota production
averaged 28,800 BOE per day during the second quarter, largely flat
from the previous quarter and up 6% from the same period in 2015.
Enerplus continues to operate one drilling rig at Fort Berthold
with capital spending in the quarter totaling $30.4 million resulting in 4.6 net wells drilled
and 7.2 net wells on-stream. Well costs continue to trend down as a
result of improvements in drilling time and ongoing completions
optimization. Enerplus' average cost for a two-mile lateral well in
the second quarter was US$7.8 million
including drilling, completion, tie-in and facilities costs, 26%
lower than the Company's 2015 average. Initial 30-day production
rates from operated wells brought on-stream in the second quarter
averaged approximately 1,450 BOE per day. At the end of the
quarter, Enerplus had approximately 8 net drilled uncompleted wells
in Fort Berthold.
Marcellus production averaged 195 MMcf per day during the second
quarter, a modest increase from the first quarter of 2016. Capital
spending in the Marcellus was $9.3
million in the quarter delivering 0.3 net wells drilled and
1.8 net wells on-stream. The production increase over the previous
quarter was due to strong well performance. Enerplus participated
in 7 gross on-stream wells in the second quarter with initial
30-day production rates that averaged 15.8 MMcf per day and an
average lateral length of 6,400 ft. Enerplus continues to plan for
limited activity levels in the Marcellus for the remainder of
2016.
Production from the Canadian waterflood assets averaged 16,560
BOE per day during the second quarter of 2016, 5% lower than the
previous quarter. Lower second quarter production was due to
limited capital activity levels and the divestment of certain
non-core assets located in northwest Alberta in June
2016. In the second quarter, Enerplus spent approximately
$7.1 million on waterflood
optimization activities. Enerplus will continue to focus on cost
management in these assets which is helping to deliver strong
operating netbacks.
PRODUCTION AND CAPITAL SPENDING
|
Three months
ended
June 30, 2016
|
Six months
ended
June 30, 2016
|
Crude Oil & NGLs
(bbls/day)
|
Average
Production
Volumes
|
Capital
Spending
($ millions)
|
Average
Production
Volumes
|
Capital
Spending
($ millions)
|
Canada
|
14,915
|
$7.1
|
15,453
|
$26.2
|
United
States
|
28,993
|
$31.6
|
29,002
|
$52.3
|
Total Crude Oil &
NGLs (bbls/day)
|
43,908
|
$38.7
|
44,455
|
$78.5
|
Natural Gas
(Mcf/day)
|
|
|
|
|
Canada
|
79,878
|
$0.1
|
89,708
|
$0.1
|
United
States
|
218,625
|
$9.3
|
218,119
|
$12.8
|
Total Natural Gas
(Mcf/day)
|
298,503
|
$9.4
|
307,827
|
$12.9
|
Company Total
(BOE/day)
|
93,659
|
$48.1
|
95,759
|
$91.4
|
NET DRILLING
ACTIVITY(1)– for
the three months ended June 30, 2016
|
|
Crude Oil
|
Wells
Drilled
|
Wells
On-stream
|
Canada
|
-
|
-
|
United
States
|
4.6
|
7.2
|
Total Crude
Oil
|
4.6
|
7.2
|
Natural Gas
|
|
|
Canada
|
-
|
-
|
United
States
|
0.3
|
1.8
|
Total Natural
Gas
|
0.3
|
1.8
|
Company Total
|
4.9
|
9.1
|
(1) Table may not add due
to rounding
|
|
|
CRUDE OIL & NATURAL GAS PRICING
Enerplus' average crude oil selling price during the second
quarter was $46.48 per barrel, an
increase of 47% compared to the prior quarter as a result of the
higher benchmark crude oil prices and narrowing Canadian
differentials. Benchmark West Texas Intermediate (WTI) crude oil
prices increased by 36% quarter-over-quarter to average
US$45.59 per barrel in the second
quarter. Enerplus' realized pricing outperformed benchmark WTI
prices as light and heavy crude differentials in Canada improved by 16% and 7% respectively,
compared to the previous quarter, due to industry wide production
outages resulting from the severe wildfires in northern
Alberta. These outages also
supported U.S. Bakken crude differentials which improved by 2%
quarter-over-quarter.
Enerplus' average natural gas selling price during the second
quarter was $1.49 per Mcf, 16% lower
than the prior quarter, reflecting the significant weakness
experienced in Western Canadian gas prices during the period.
Benchmark NYMEX gas prices fell by 7% in the second quarter, while
in Canada benchmark AECO monthly
natural gas prices were 41% weaker than in the first quarter of
2016 in large part due to excessive inventory levels caused by mild
winter weather. Supported by Enerplus' AECO basis hedging
contracts, the Company's realized Canadian gas price differential
significantly outperformed the AECO benchmark price, averaging
US$0.86 per Mcf below NYMEX during
the quarter compared to the benchmark AECO monthly differential of
US$0.99 per Mcf below NYMEX.
Enerplus' realized Marcellus differential improved by 16% during
the second quarter to average US$0.76
per Mcf below NYMEX. Industry rig counts in the Marcellus region
have fallen meaningfully over the past year which has moderated
Northeast Pennsylvania production
growth and improved price differentials to NYMEX. Enerplus expects
its Marcellus differential to widen in the third quarter with the
stronger NYMEX prices.
RISK MANAGEMENT
Enerplus continues to protect a portion of funds flow through
commodity hedging. Based on 2016 forecast net oil production after
royalties, Enerplus has approximately 39% of volumes protected in
the second half of 2016 and 2017 through collar structures. Based
on 2016 forecast net natural gas production after royalties,
Enerplus has approximately 29% and 20% of volumes protected in the
second half of 2016 and 2017 respectively, through a combination of
swaps and collar structures.
Commodity Hedging Detail
(as at July 22, 2016)
|
|
|
|
|
WTI Crude Oil
(US$/bbl)(1)
|
|
NYMEX
Natural
Gas (US$/Mcf)(1)
|
|
|
Jul 1, 2016
–
Dec 31, 2016
|
Jan 1, 2017
–
Dec 31, 2017
|
Jul 1, 2016
–
Oct 31, 2016
|
Nov 1, 2016
–
Dec 31, 2016
|
Jan 1, 2017
–
Dec 31, 2017
|
Swaps
|
|
|
|
|
|
Sold
Swaps
|
-
|
-
|
$2.53
|
$2.48
|
-
|
Volume (bbl/d or
Mcf/d)
|
-
|
-
|
50,000
|
25,000
|
-
|
% of net
production
|
-
|
-
|
22%
|
11%
|
-
|
|
|
|
|
|
|
3 Way
Collars
|
|
|
|
|
|
Sold
Puts
|
$45.09
|
$38.59
|
$2.50
|
$2.50
|
$2.03
|
Volume (bbl/d or
Mcf/d)
|
12,000
|
12,000
|
25,000
|
25,000
|
45,000
|
% of net
production
|
39%
|
39%
|
11%
|
11%
|
20%
|
|
|
|
|
|
|
Purchased
Puts
|
$57.82
|
$50.00
|
$3.00
|
$3.00
|
$2.72
|
Volume (bbl/d or
Mcf/d)
|
12,000
|
12,000
|
25,000
|
25,000
|
45,000
|
% of net
production
|
39%
|
39%
|
11%
|
11%
|
20%
|
|
|
|
|
|
|
Sold
Calls
|
$71.75
|
$60.50
|
$3.75
|
$3.75
|
$3.37
|
Volume (bbl/d or
Mcf/d)
|
12,000
|
12,000
|
25,000
|
25,000
|
45,000
|
% of net
production
|
39%
|
39%
|
11%
|
11%
|
20%
|
(1) Based on weighted
average price (before premiums), assuming average annual production
of 93,000 BOE/day for 2016 and 2017, less royalties
and production taxes of 22% in
aggregate
|
2016 REVISED GUIDANCE
Enerplus has revised its full year 2016 guidance to reflect
stronger natural gas production from the Marcellus, a lower
expected overall royalty expense, reduced operating and G&A
expenses, and a modest increase in capital spending to support 2017
growth.
Summary of 2016
Expectations
|
Revised
Guidance
|
Previous
Guidance
|
Capital
spending
|
$215
million
|
$200
million
|
Average annual
production
|
92,000 – 94,000
BOE/day
|
90,000 – 94,000
BOE/day
|
Crude oil and natural gas
liquids volumes
|
43,000 – 45,000
barrels/day
|
43,000 – 45,000
barrels/day
|
Average royalty and
production tax rate
|
22%
|
23%
|
Operating
expenses
|
$7.90/BOE
|
$8.50/BOE
|
Transportation
expense
|
$3.10/BOE
|
$3.10/BOE
|
Cash G&A
expenses
|
$1.95/BOE
|
$2.00/BOE
|
Q2 2016 CONFERENCE CALL DETAILS
A conference call hosted by Ian C.
Dundas, President and CEO will be held at 9:00AM MT (11:00AM
ET) today to discuss these results. Details of the
conference call are as follows:
Date:
|
|
|
Friday, August 5,
2016
|
Time:
|
|
|
9:00 AM MT (11:00 AM
ET)
|
Dial-In:
|
|
|
647-427-7450
|
|
|
|
1-888-231-8191 (toll
free)
|
Audiocast:
|
|
|
http://event.on24.com/r.htm?e=1220760&s=1&k=27AA414C14D5775C55176FD27A428CCD
|
To ensure timely participation in the conference call, callers
are encouraged to dial in 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:
Dial-In:
|
416-849-0833
|
|
1-855-859-2056 (toll
free)
|
Passcode:
|
45475268
|
SELECTED FINANCIAL RESULTS
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2016
|
2015
|
2016
|
2015
|
Financial
(000's)
|
|
|
|
|
Funds
Flow(4)
|
$
|
76,047
|
$
|
160,436
|
$
|
117,774
|
$
|
269,600
|
Dividends to
Shareholders
|
6,547
|
30,935
|
21,011
|
78,294
|
Net
Income/(Loss)
|
(168,554)
|
(312,544)
|
(342,220)
|
(605,750)
|
Debt Outstanding - net of
cash
|
674,147
|
1,120,680
|
674,147
|
1,120,680
|
Capital
Spending
|
48,120
|
147,979
|
91,396
|
314,989
|
Property and Land
Acquisitions
|
343
|
(1,011)
|
3,897
|
(1,248)
|
Property
Divestments
|
92,735
|
187,801
|
280,503
|
191,513
|
Debt to Funds Flow
Ratio(4)
|
2.0x
|
1.6x
|
2.0x
|
1.6x
|
|
|
|
|
|
Financial per Weighted
Average Shares Outstanding
|
|
|
|
|
Net
Income/(Loss)
|
$
|
(0.77)
|
$
|
(1.52)
|
$
|
(1.61)
|
$
|
(2.94)
|
Weighted Average Number of
Shares Outstanding (000's)
|
218,128
|
206,208
|
212,420
|
206,028
|
|
|
|
|
|
Selected Financial
Results per BOE(1)(2)
|
|
|
|
|
Oil & Natural Gas
Sales(3)
|
$
|
24.96
|
$
|
30.53
|
$
|
21.99
|
$
|
28.78
|
Royalties and Production
Taxes
|
(5.51)
|
(6.23)
|
(4.72)
|
(5.88)
|
Commodity Derivative
Instruments
|
2.53
|
7.47
|
3.51
|
8.48
|
Cash Operating
Expenses
|
(7.20)
|
(8.12)
|
(7.67)
|
(8.81)
|
Transportation
Costs
|
(2.87)
|
(2.87)
|
(2.88)
|
(2.89)
|
General and Administrative
Expenses
|
(1.71)
|
(2.03)
|
(1.89)
|
(2.19)
|
Cash Share-Based
Compensation
|
(0.09)
|
0.13
|
(0.09)
|
(0.32)
|
Interest, Foreign Exchange
and Other Expenses
|
(1.21)
|
(2.48)
|
(1.51)
|
(2.87)
|
Current Income Tax
Recovery
|
0.02
|
0.01
|
0.02
|
-
|
Funds
Flow(4)
|
$
|
8.92
|
$
|
16.41
|
$
|
6.76
|
$
|
14.30
|
SELECTED OPERATING RESULTS
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2016
|
2015
|
2016
|
2015
|
Average Daily
Production(2)
|
|
|
|
|
Crude Oil
(bbls/day)
|
39,079
|
41,122
|
39,294
|
40,243
|
Natural Gas Liquids
(bbls/day)
|
4,829
|
5,145
|
5,161
|
4,444
|
Natural Gas
(Mcf/day)
|
298,503
|
366,971
|
307,827
|
356,836
|
Total
(BOE/day)
|
93,659
|
107,429
|
95,759
|
104,160
|
|
|
|
|
|
% Crude Oil & Natural
Gas Liquids
|
47%
|
43%
|
46%
|
43%
|
|
|
|
|
|
Average Selling Price
(2)(3)
|
|
|
|
|
Crude Oil (per
bbl)
|
$
|
46.48
|
$
|
58.26
|
$
|
39.00
|
$
|
51.35
|
Natural Gas Liquids (per
bbl)
|
15.67
|
20.88
|
13.37
|
21.55
|
Natural Gas (per
Mcf)
|
1.49
|
2.09
|
1.64
|
2.32
|
|
|
|
|
|
Net Wells
drilled
|
5
|
8
|
17
|
36
|
(1)
|
Non-cash amounts have been
excluded.
|
(2)
|
Based on Company interest
production volumes. See "Basis of Presentation" section in the
Second Quarter 2016 MD&A.
|
(3)
|
Before transportation
costs, royalties and commodity derivative
instruments.
|
(4)
|
These non-GAAP measures may
not be directly comparable to similar measures presented by other
entities. See "Non-GAAP Measures".
|
|
|
|
Three months ended June
30,
|
Six months ended June
30,
|
Average Benchmark
Pricing
|
2016
|
2015
|
2016
|
2015
|
WTI crude oil
(US$/bbl)
|
$
|
45.59
|
$
|
57.94
|
$
|
39.52
|
$
|
53.29
|
AECO natural gas – monthly
index (CDN$/Mcf)
|
1.25
|
2.67
|
1.68
|
2.81
|
AECO natural gas – daily
index (CDN$/Mcf)
|
1.40
|
2.64
|
1.62
|
2.70
|
NYMEX natural gas – last
day (US$/Mcf)
|
1.95
|
2.64
|
2.02
|
2.81
|
USD/CDN exchange
rate
|
1.29
|
1.23
|
1.33
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Trading
Summary
|
|
|
CDN(1) -
ERF
|
|
|
U.S.(2) -
ERF
|
For the three months
ended June 30, 2016
|
|
|
(CDN$)
|
|
|
(US$)
|
High
|
|
$
|
8.78
|
|
$
|
6.94
|
Low
|
|
$
|
4.68
|
|
$
|
3.55
|
Close
|
|
$
|
8.51
|
|
$
|
6.57
|
(1) TSX and other Canadian
trading data combined.
|
|
|
|
|
|
|
(2) NYSE and other U.S.
trading data combined.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Dividends per
Share
|
|
|
|
|
|
|
Payment Month
|
|
|
CDN$
|
|
|
US$(1)
|
First Quarter
Total
|
|
$
|
0.09
|
|
$
|
0.06
|
April
|
|
$
|
0.01
|
|
$
|
0.01
|
May
|
|
|
0.01
|
|
|
0.01
|
June
|
|
|
0.01
|
|
|
0.01
|
Second Quarter
Total
|
|
$
|
0.03
|
|
$
|
0.03
|
Total
Year-to-Date
|
|
$
|
0.12
|
|
$
|
0.09
|
(1) CDN$ dividends
converted at the relevant foreign exchange rate on the payment
date.
|
|
|
Currency and Accounting Principles
All amounts in this news release are stated in Canadian
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
Measures".
Barrels of Oil Equivalent
This news release also contains references to "BOE"
(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. BOEs 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.
Presentation of Production Information
Under U.S. GAAP oil and gas sales are generally presented
net of royalties and U.S. industry protocol is to present
production volumes net of royalties. Under Canadian industry
protocol oil and gas sales and production volumes are presented on
a gross basis before deduction of royalties. In order to continue
to be comparable with its Canadian peer companies, the summary
results contained within this news release presents Enerplus'
production and BOE measures on a before royalty company interest
basis. All production volumes and revenues presented herein are
reported on a "company interest" basis, before deduction of Crown
and other royalties, plus Enerplus' royalty
interest.
Readers are cautioned that the average initial
production rates contained in this news release are not necessarily
indicative of long-term performance or of ultimate
recovery.
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", "should", "believe", "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: expected 2016 average
production volumes and the anticipated production mix; the
proportion of anticipated oil and gas production that is hedged and
the effectiveness of such hedges in protecting funds flow; the
results from drilling programs and the timing of related
production; oil and natural gas prices and differentials and
commodity and foreign exchange risk management programs in 2016 and
in 2017; expectations regarding realized oil and natural gas
prices; anticipated cash and non-cash G&A, share based
compensation and financing expenses; operating and transportation
costs; capital spending levels in 2016, anticipated drilling and
completions program, and the expected impact on production levels;
potential future asset impairments; future debt and working capital
levels and debt to funds flow ratios.
The forward-looking information contained in this news
release reflects several material factors and expectations and
assumptions of Enerplus including, without limitation: that
Enerplus will conduct its operations and achieve results of
operations as anticipated; that Enerplus' development plans will
achieve the expected results; current commodity price and cost
assumptions; the general continuance of current or, where
applicable, assumed industry conditions; the continuation of
assumed tax, royalty and regulatory regimes; the accuracy of the
estimates of Enerplus' reserves and resources volumes; the
continued availability of adequate debt and/or equity financing,
cash flow and other sources to fund Enerplus' capital and operating
requirements, and dividend payments as needed; availability of
third party services; and the extent of its liabilities. In
addition, Enerplus' 2016 revised guidance is based on the following
assumptions: WTI crude oil price of US$42.61/bbl, NYMEX gas price of US$2.46/Mcf, and AECO gas price of $2.00/GJ, and USD/CDN exchange rate of 1.32.
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.
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, including future decline, in commodity prices; changes in
realized prices for Enerplus' products; changes in the demand for
or supply of Enerplus' products; unanticipated operating results,
results from Enerplus' capital spending activities or production
declines; curtailment of Enerplus' 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 development plans by Enerplus or by third party
operators of Enerplus' properties; increased debt levels or debt
service requirements; Enerplus' inability to comply with covenants
under its bank credit facility and senior notes; changes in
estimates of Enerplus' oil and gas reserves and resources 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; failure to complete
any anticipated acquisitions or divestitures; and certain other
risks detailed from time to time in Enerplus' public disclosure
documents (including, without limitation, those risks identified in
its AIF and Form 40-F at December 31,
2015).
NON-GAAP MEASURES
In this news release, we use the terms "funds flow" and
"debt to funds flow ratio" as measures to analyze operating
performance, leverage and liquidity. "Funds flow" is calculated as
net cash generated from operating activities but before changes in
non-cash operating working capital and asset retirement obligation
expenditures. "Debt to funds flow ratio" is calculated as total
debt net of cash, divided by a trailing 12 months of funds flow. In
addition, "senior debt to adjusted EBITDA" is used to determine
Enerplus' compliance with financial covenants under its bank credit
facility and outstanding senior notes. Calculation of these terms
is described in Enerplus Corporation's Second Quarter 2016 MD&A
under the "Liquidity and Capital Resources" section.
Enerplus believes that, in addition to net earnings and
other measures prescribed by U.S. GAAP, the terms "funds flow" and
"debt to funds flow" are useful supplemental measures as they
provide an indication of the results generated by Enerplus'
principal business activities. However, these measures, and "senior
debt to adjusted EBITDA" measures, are not measures recognized by
U.S. GAAP and do not have a standardized meaning prescribed by
U.S.GAAP. Therefore, these measures, as defined by Enerplus, may
not be comparable to similar measures presented by other issuers.
For reconciliation of these measures to the most directly
comparable measure calculated in accordance with U.S. GAAP, and
further information about these measures, see disclosure under
"Non-GAAP Measures" in Enerplus' Second Quarter 2016
MD&A.
Electronic copies of Enerplus Corporation's Second Quarter 2016
MD&A and Financial Statements, along with other public
information including investor presentations, are available on its
website at www.enerplus.com. Shareholders may, upon request,
receive a printed copy of our audited financial statements at any
time. For further information, please contact Investor Relations at
1-800-319-6462 or email investorrelations@enerplus.com.
Follow @EnerplusCorp on Twitter at
https://twitter.com/EnerplusCorp.
Ian C. Dundas
President & Chief Executive Officer
Enerplus Corporation
SOURCE Enerplus Corporation