CALGARY, April 11, 2016 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX & NYSE: ERF) announces that
it has entered into a definitive agreement to sell certain non-core
assets located in Northwest
Alberta, including its Pouce
Coupe asset (the "Assets"). The total cash consideration for
the Assets is approximately $95.5
million, subject to closing adjustments, and the transaction
is expected to close in the second quarter of 2016. Enerplus has
used its 2016 divestment proceeds, which will total $288.5 million upon the closing of this
divestment, to reduce its outstanding debt, including repurchasing
a portion of its senior unsecured notes.
At December 31, 2015 the Assets
were estimated to have proved plus probable reserves of 9.1 million
BOE (50% natural gas) with production from the Assets expected to
average approximately 2,300 BOE per day in 2016 (50% natural gas,
30% non-operated). Given the higher operating costs and lower
project returns relative to other areas in Enerplus' portfolio, the
Assets were considered non-core to the Company's long-term
strategy.
The divestment is expected to be accretive on both a production
per debt adjusted share and funds flow per debt adjusted share
basis, and have a modest impact on 2016 funds flow.
Enerplus is maintaining its 2016 production guidance range of
90,000 to 94,000 BOE per day, despite this divestment, as a result
of continued strong operational performance.
TD Securities Inc. is acting as exclusive financial advisor to
Enerplus on this transaction.
About Enerplus
Enerplus Corporation is a responsible developer of high quality
crude oil and natural gas assets in Canada and the
United States, focused on providing both growth and income
to its shareholders.
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 assets in Northwest
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' 2015 annual
management's discussion and analysis available at
www.enerplus.com.
Follow @EnerplusCorp on Twitter at
https://twitter.com/EnerplusCorp.
Ian C. Dundas
President & Chief Executive Officer
Enerplus Corporation
SOURCE Enerplus Corporation