CALGARY, Jan. 11, 2016 /CNW/ - Enerplus Corporation
("Enerplus") (TSX & NYSE: ERF) announces that it has entered
into agreements to sell various Canadian natural gas properties
located in Alberta. The total cash
consideration for these assets is approximately $193 million, subject to closing adjustments, and
is accretive on both a funds flow per debt adjusted share and
production per debt adjusted share basis. Enerplus intends to use
the proceeds to reduce outstanding indebtedness providing
additional financial flexibility. The divestment of these
properties further increases the focus and concentration within
Enerplus' portfolio.
The divested assets, which are largely located around the
Ansell, Minehead and Hanlan-Robb
areas, consist of operated and non-operated properties and
facilities. Production from the divested properties for 2016 was
expected to be approximately 5,400 BOE per day (98 per cent natural
gas). These properties are being divested under two separate
transactions, both of which are expected to close during the first
quarter of 2016.
Enerplus plans to update its 2016 guidance, which will include
the impact of these transactions, with or before the release of its
year-end 2015 results on February 19,
2016.
BMO Capital Markets is acting as exclusive financial advisor to
Enerplus.
About Enerplus
Enerplus is a North American energy
producer with a portfolio of high quality oil and gas assets in
resource plays that offer significant organic growth potential. We
are focused on creating value for our investors through the
execution of a disciplined capital investment strategy that
supports the successful development of our properties. We are a
responsible developer of resources that strives to provide
investors with a competitive return comprised of both growth and
dividend income.
CURRENCY AND ACCOUNTING PRINCIPLES
All amounts in this news release are stated in Canadian
dollars unless otherwise specified.
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 our Canadian peer companies, the summary results
contained within this news release presents our 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.
FORWARD-LOOKING INFORMATION AND STATEMENTS
Except for the historical and present factual information
contained herein, the matters set forth in this news release,
including words such as "expects", "projects", "plans" and similar
expressions, are forward-looking information that represents
management of Enerplus' internal projections, expectations or
beliefs concerning, among other things, the proposed sale of
certain natural gas properties of Enerplus located in the Deep
Basin in Alberta, including
anticipated proceeds therefrom, production and anticipated 2016
funds flow associated therewith, and expected closing thereof. The
projections, estimates and beliefs contained in such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause Enerplus' actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, among other things, Enerplus'
failure to complete the proposed asset dispositions, on the terms
and within the timeframe described herein or at all, and those
described in Enerplus' filings with the Canadian and U.S.
securities authorities. Accordingly, holders of Enerplus
shares and potential investors are cautioned that events or
circumstances could cause results to differ materially from those
predicted.
NON-GAAP MEASURES
In this news release, we use the terms "funds flow" as a
measure to analyze operating performance. "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. Enerplus believes that,
in addition to net earnings and other measures prescribed by U.S.
GAAP, the term "funds flow" is a useful supplemental measure as it
provides an indication of the results generated by Enerplus'
principal business activities. However, this measure is not a
measure recognized by U.S. GAAP and does not have a standardized
meaning prescribed by U.S. GAAP. Therefore, this measure, as
defined by Enerplus, may not be comparable to similar measures
presented by other issuers. For reconciliation of this measure to
the most directly comparable measure calculated in accordance with
U.S. GAAP, and further information about this measure, see
disclosure under "Non-GAAP Measures" in Enerplus' annual and
interim management's discussion and analysis.
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Ian C. Dundas
President & Chief Executive Officer
Enerplus Corporation
SOURCE Enerplus Corporation