All financial information contained within this news release
has been prepared in accordance with U.S. GAAP. 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. Readers are also referred to
"Non-GAAP and Other Financial Measures" at the end of this news
release for information regarding the presentation of the
financial and operational information in this news release, as well
as the use of certain financial measures that do not have standard
meaning under U.S. GAAP and "Notice Regarding Information Contained
in this News Release", "Non-GAAP Measures" in Enerplus' second
quarter 2022 MD&A for supplementary financial measures, which
information is incorporated by reference to this news release. A
copy of Enerplus' 2022 interim and 2021 annual Financial Statements
and associated MD&A are or will be available on our website at
www.enerplus.com, under our profile on SEDAR at www.sedar.com and
on the EDGAR website at www.sec.gov. All amounts in this news
release are stated in United
States dollars unless otherwise specified.
CALGARY,
AB, Aug. 4, 2022 /CNW/ - Enerplus Corporation
("Enerplus" or the "Company") (TSX: ERF) (NYSE: ERF) today
announced financial and operating results for the second quarter of
2022, an increase to its return of capital framework including its
dividend, updated 2022 guidance and updates to its five-year
outlook. The Company reported second quarter 2022 cash flow from
operating activities and adjusted funds flow of $250.9 million and $297.4
million, respectively, compared to $110.5 million and $150.0
million, respectively, in the second quarter of 2021. Cash
flow from operating activities and adjusted funds flow increased
from the prior year period primarily due to higher realized
commodity prices.
HIGHLIGHTS
- Adjusted funds flow was $297.4
million in the second quarter, which exceeded capital
spending of $132.9 million,
generating free cash flow(1) of $164.5 million
- Increased 2022 free cash flow(1) estimate to
$800 million based on rest of year
prices of $90 WTI and $6.50 NYMEX
- Normal course issuer bid ("NCIB") was fully executed for 10% of
the public float having repurchased 25.6 million shares between
August 2021 and July 2022 at an average price of $11.14 per share, for total consideration of
$284.8 million.
- Increased return of capital framework to at least 60% of free
cash flow commencing in the second half of 2022 and continuing
through 2023
- Increased minimum 2022 return of capital commitment to
$425 million, from $350 million previously
- Increased quarterly dividend by 16% to $0.05 per share
- Production guidance for 2022 increased to 97,500 – 101,500 BOE
per day (from 96,000 – 101,000 BOE per day) due to continued strong
operational performance with no change to capital spending guidance
and despite the recently announced sale of assets in Canada expected to impact 2022 production by
approximately 850 BOE per day
- Robust volume growth anticipated in the second half of 2022:
approximately 15% liquids production growth expected in the third
quarter compared to the second quarter
(1)
|
This is a non-GAAP
financial measure. Refer to "Non-GAAP and Other Financial Measures"
section for more information.
|
"Enerplus' second quarter results and updated 2022 outlook
reflect our company's strong operating momentum and disciplined
approach to capital allocation," said Ian
C. Dundas, President and CEO. "Our annual production
guidance has continued to move higher driven by well outperformance
and efficient execution, while our capital spending plans remain
unchanged."
Dundas continued, "Enerplus is in a solid financial position
with a compelling free cash flow profile. As a result, we are
increasing our cash returns to shareholders to at least 60% of free
cash flow in the second half of this year, with a minimum
commitment of returning $425 million
in 2022 through dividends and share repurchases. We are also
committing to returning at least 60% of 2023 free cash flow to
shareholders."
SECOND QUARTER SUMMARY
Production in the second quarter of 2022 was 94,142 BOE per day,
an increase of 2% compared to the prior quarter and the same period
a year ago. Crude oil and natural gas liquids production in the
second quarter of 2022 was 56,866 barrels per day, an increase of
2% compared to the prior quarter, and 1% lower than the same period
a year ago. As previously noted, second quarter volumes were
impacted by severe winter weather in North Dakota during April 2022, however, through strong operational
performance and the continued optimization of the Company's
development plan, Enerplus has been able to more than offset the
impact from the storm to its annual production forecast. Third
quarter liquids production is expected to be approximately 15%
higher than the second quarter.
Enerplus reported second quarter 2022 net income of $244.4 million, or $0.99 per share (diluted), compared to a net loss
of $50.9 million, or $0.20 per share (diluted), in the same period in
2021. Adjusted net income(1) for the second quarter of
2022 was $172.3 million, or
$0.70 per share (diluted), compared
to $54.7 million, or $0.21 per share (diluted), during the same period
in 2021. Net income and adjusted net income were higher compared to
the prior year period primarily due to higher realized commodity
prices during the second quarter of 2022.
Enerplus' second quarter 2022 realized Bakken oil price
differential was $0.85 per barrel
above WTI, compared to $2.81 per
barrel below WTI in the second quarter of 2021. Bakken crude oil
price differentials turned positive to WTI due to increasing
demand, excess pipeline capacity in the region and strong prices
for crude oil delivered to the U.S. Gulf Coast. Given the
constructive outlook for Bakken crude oil prices and strong
realizations year to date, Enerplus expects its 2022 realized
average Bakken crude oil differential to be $1.00 per barrel above WTI, compared to a price
at par with WTI, previously.
The Company's realized Marcellus natural gas price differential
was $0.59 per Mcf below NYMEX during
the second quarter of 2022, compared to $0.89 per Mcf below NYMEX in the second quarter
of 2021. Realized Marcellus differentials are expected to widen for
the remainder of the year due to the seasonal impact on natural gas
prices in the region. Enerplus' full-year 2022 Marcellus
differential guidance is unchanged at $0.75 per Mcf below NYMEX.
In the second quarter of 2022, Enerplus' operating costs were
$9.74 per BOE, compared to
$8.56 per BOE during the second
quarter of 2021. The increase in per unit operating expenses was
primarily due to contracts with price escalators linked to WTI and
the Consumer Price Index.
Capital spending totaled $132.9
million in the second quarter of 2022. In addition,
Enerplus paid $9.9 million in
dividends in the quarter and repurchased 7.1 million shares at an
average price of $13.13 per share,
for total consideration of $92.9
million. During July 2022,
Enerplus repurchased the remaining 2.5 million shares under its 10%
NCIB authorization at an average price of $12.81 per share, for total consideration of
$31.5 million.
Enerplus ended the second quarter of 2022 with total debt of
$571.4 million and cash of
$25.4 million.
(1)
|
This is a non-GAAP
financial measure. Refer to "Non-GAAP and Other Financial Measures"
section for more information.
|
ASSET HIGHLIGHTS
North Dakota production
averaged 58,626 BOE per day during the second quarter of 2022, an
increase of 4% compared to the same period a year ago and 2% higher
compared to the previous quarter. Severe winter weather temporarily
impacted Enerplus' North Dakota
operations during April 2022,
however, strong well performance is expected to drive significant
volume growth into the third quarter. Enerplus drilled 13 gross
operated wells (88% working interest) during the second quarter and
brought 24 operated wells (88% working interest) on production.
Marcellus production averaged 168 MMcf per day during the second
quarter of 2022, an increase of 9% compared to the same period in
2021 and 3% higher than the prior quarter.
INCREASING RETURN OF CAPITAL TO
SHAREHOLDERS
Based on strong operating and financial performance through the
first half of 2022 and to date, a robust free cash flow outlook,
and the recently announced divestment of assets in Canada, Enerplus is increasing its return of
capital to shareholders. Under its updated framework, the Company
plans to return at least 60% of its free cash flow to shareholders
(from 50% previously) commencing in the second half of 2022 and
continuing through 2023. Enerplus is also increasing its minimum
2022 return of capital commitment to $425
million, from $350 million
previously. Year to date through July, Enerplus has returned
$179 million through dividends and
share repurchases, leaving a minimum remaining return of
$246 million by the end of 2022.
In connection with this plan, Enerplus' board of directors has
approved the renewal of its NCIB for another 10% of the public
float in August 2022, subject to
Toronto Stock Exchange approval, and a 16% increase to the
quarterly dividend to $0.05 per share
payable on September 15, 2022 to
shareholders of record on August 31,
2022.
Enerplus plans to continue to prioritize share repurchases for
the majority of its return of capital to shareholders due to its
assessment that its intrinsic value, based on its mid-cycle
commodity price view, is not adequately reflected in its current
trading value. If this view changes such that Enerplus believes
share repurchases no longer represent an attractive capital
allocation opportunity, the Company will distribute the capital to
shareholders through dividends to ensure it meets its shareholder
returns commitment.
Remaining free cash flow not allocated to shareholder returns is
expected to be directed to reinforcing the balance sheet.
2022 GUIDANCE UPDATE
Updates to Enerplus' 2022 guidance are provided in the tables
below.
Enerplus is increasing its production guidance to 97,500 to
101,500 BOE per day, from the prior guidance of 96,000 to 101,000
BOE per day. Liquids production guidance has been updated to 59,500
to 62,500 barrels per day, from 58,500 to 62,500 barrels per day
previously. The increase reflects strong well performance and the
continued optimization of Enerplus' development plan. This update
represents an increase of 1,000 BOE per day based on the guidance
midpoint despite the expected loss of production associated with
the recently announced sale of assets in Canada which is anticipated to close at the
end of the third quarter and impact 2022 production by
approximately 850 BOE per day.
There are no changes to capital spending guidance.
2022 Guidance Summary
|
Updated
Guidance
|
Previous
Guidance
|
Capital
spending
|
$400 – 440 million (No
change)
|
$400 – 440
million
|
Average total
production
|
97,500 – 101,500
BOE/day
|
96,000 – 101,000
BOE/day
|
Average liquids
production
|
59,500 – 62,500
bbls/day
|
58,500 – 62,500
bbls/day
|
Average production tax
rate
(% of net sales, before
transportation)
|
7% (No
change)
|
7 %
|
Operating
expense
|
$10.00/BOE
|
$9.75 –
10.50/BOE
|
Transportation
expense
|
$4.25/BOE
|
$4.15/BOE
|
Cash G&A
expense
|
$1.20/BOE
|
$1.25/BOE
|
Current tax
expense
|
2-3% of adjusted funds
flow before tax
|
$20 - 30
million
(2-3% of adjusted funds
flow before tax)
|
2022 Differential/Basis
Outlook(1)
|
Updated
Guidance
|
Previous
Guidance
|
U.S. Bakken crude oil
differential
(compared to WTI crude
oil)
|
$+1.00/bbl
|
$0/bbl
|
Marcellus natural gas
sales price differential
(compared to NYMEX
natural gas)
|
$(0.75)/Mcf (No
change)
|
$(0.75)/Mcf
|
(1)
|
Excluding
transportation costs.
|
UPDATED FIVE-YEAR
OUTLOOK
Enerplus has updated its five-year outlook to reflect the higher
current commodity price and inflationary environment and to exclude
its Canadian assets due to the previously announced and ongoing
divestment process. Enerplus' previous five-year outlook was based
on a commodity price environment of $70 per barrel WTI and $3.00 per Mcf NYMEX. Enerplus is increasing its
commodity price assumptions to $80
per barrel WTI and $4.00 per Mcf
NYMEX(1) and is updating its projected annual capital
spending to approximately $500
million (2023-2026) to account for higher anticipated costs
due to inflation. The Company's outlook continues to be underpinned
by a focus on operating with low financial leverage, delivering
strong and sustainable free cash flow growth, and returning capital
to shareholders.
Enerplus estimates cumulative free cash flow(2) of
approximately $3 billion between 2022
and 2026 and an average reinvestment rate of less than 50%
over the period. Enerplus projects 3% to 5% annual liquids
production growth between 2023 and 2026 on a divestment adjusted
basis. 2022 annual production growth is projected to be
approximately 8% which is partially impacted by the timing of the
Company's 2021 acquisitions.
(1)
|
2022 is based on prices
of $90/bbl WTI and $ 6.50/Mcf NYMEX for the remainder of
2022.
|
(2)
|
This is a non-GAAP
financial measure. Refer to "Non-GAAP and Other Financial Measures"
section for more information.
|
Q2 2022 Conference Call
Details
A conference call hosted by Ian C.
Dundas, President and CEO will be held at 9:00 AM MT (11:00 AM
ET) on August 5, 2022, to
discuss these results. Details of the conference call are as
follows:
|
|
Date:
|
Friday, August 5,
2022
|
Time:
|
9:00 AM MT (11:00 AM
ET)
|
Dial-In:
|
587-880-2171
(Alberta)
|
|
1-888-390-0546 (Toll
Free)
|
Conference
ID:
|
73519318
|
Audiocast:
|
https://producereditionwebcasts.com/startherejsp?ei=1557604&tp_key=1b2aa32a82
|
To ensure timely participation in the conference call, callers
are encouraged to join 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:
|
|
|
|
Replay
Dial-In:
|
1-888-390-0541
(Toll Free)
|
Replay
Passcode:
|
519318 #
|
PRICE RISK MANAGEMENT
The following is a summary of Enerplus' financial commodity
hedging contracts at August 3,
2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Crude Oil
($/bbl)(1)(2)(3)
|
|
NYMEX Natural Gas
($/Mcf)(2)
|
|
|
Jul 1,
2022 –
|
|
Jan 1,
2023 –
|
|
Jul 1,
2023 –
|
|
Jul 1,
2022 –
|
|
Nov 1, 2022
–
|
|
|
Dec 31,
2022
|
|
Jun 30,
2023
|
|
Dec 31,
2023
|
|
Oct 31,
2022
|
|
Mar
31, 2023
|
Swaps
|
|
|
|
|
|
|
|
|
|
|
Volume
(Mcf/day)
|
|
–
|
|
–
|
|
–
|
|
40,000
|
|
–
|
Swaps
|
|
–
|
|
–
|
|
–
|
|
$ 3.40
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
3 Way
Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(bbls/day)
|
|
17,000
|
|
15,000
|
|
5,000
|
|
–
|
|
–
|
Sold Puts
|
|
$ 40.00
|
|
$ 61.67
|
|
$ 65.00
|
|
–
|
|
–
|
Purchased
Puts
|
|
$ 50.00
|
|
$ 79.33
|
|
$ 85.00
|
|
–
|
|
–
|
Sold Calls
|
|
$ 57.91
|
|
$ 114.31
|
|
$ 128.16
|
|
–
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(Mcf/day)
|
|
–
|
|
–
|
|
–
|
|
60,000
|
|
50,000
|
Volume
(bbls/day)
|
|
–
|
|
2,000
|
|
2,000
|
|
–
|
|
–
|
Purchased
Puts
|
|
–
|
|
$ 5.00
|
|
$ 5.00
|
|
$ 3.77
|
|
$ 6.50
|
Sold Calls
|
|
–
|
|
$ 75.00
|
|
$ 75.00
|
|
$ 4.50
|
|
$ 16.41
|
(1)
|
The total average
deferred premium spent on outstanding hedges is $1.50/bbl from July
1, 2022 - December 31, 2022 and $1.25/bbl from January 1, 2023 –
June 30, 2023.
|
(2)
|
Transactions with a
common term have been aggregated and presented at weighted average
prices and volumes.
|
(3)
|
Upon closing of the
acquisition (the "Bruin Acquisition") of Bruin E&P Holdco, LLC
("Bruin"), Bruin's outstanding crude oil contracts were recorded at
a fair value liability of $76.4 million. At June 30, 2022, the
balance was a liability of $10.3 million on the Condensed
Consolidated Balance Sheets. Realized and unrealized gains and
losses on the acquired contracts are recognized in Condensed
Consolidated Statement of Income/(Loss) and the Condensed
Consolidated Balance Sheets to reflect changes in crude oil prices
from the date of closing of the Bruin Acquisition. See Note 16 to
the Interim Financial Statements for further details.
|
SECOND QUARTER 2022 PRODUCTION AND
OPERATIONAL SUMMARY TABLES
Summary of Average Daily
Production(1)
|
Three months ended
June 30, 2022
|
|
Six months ended
June 30, 2022
|
|
Williston
Basin
|
Marcellus
|
Canadian
Water-
floods
|
Other(2)
|
Total
|
|
Williston
Basin
|
Marcellus
|
Canadian
Water-
floods
|
Other(2)
|
Total
|
Tight oil
(bbl/d)
|
42,447
|
-
|
-
|
798
|
43,245
|
|
42,003
|
-
|
-
|
836
|
42,839
|
|
Light & medium oil
(bbl/d)
|
-
|
-
|
2,054
|
29
|
2,082
|
|
-
|
-
|
2,101
|
26
|
2,127
|
|
Heavy oil
(bbl/d)
|
-
|
-
|
2,872
|
14
|
2,886
|
|
-
|
-
|
2,949
|
10
|
2,959
|
|
Total crude oil
(bbl/d)
|
42,447
|
-
|
4,926
|
841
|
48,213
|
|
42,003
|
-
|
5,051
|
872
|
47,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas liquids
(bbl/d)
|
8,231
|
-
|
87
|
336
|
8,653
|
|
8,106
|
-
|
87
|
323
|
8,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shale gas
(Mcf/d)
|
47,689
|
167,631
|
-
|
1,014
|
216,334
|
|
47,276
|
164,900
|
-
|
968
|
213,144
|
|
Conventional natural
gas (Mcf/d)
|
-
|
-
|
1,459
|
5,860
|
7,319
|
|
-
|
-
|
1,420
|
5,836
|
7,256
|
|
Total natural gas
(Mcf/d)
|
47,689
|
167,631
|
1,459
|
6,874
|
223,653
|
|
47,276
|
164,900
|
1,420
|
6,804
|
220,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total production
(BOE/d)
|
58,626
|
27,938
|
5,255
|
2,322
|
94,142
|
|
57,988
|
27,483
|
5,375
|
2,329
|
93,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Table may not add due
to rounding.
|
(2)
|
Comprises DJ
Basin and other properties in Canada.
|
Summary of Wells
Drilled(1)
|
Three months
ended June 30, 2022
|
|
Six months
ended June 30, 2022
|
|
Operated
|
|
Non-Operated
|
|
Operated
|
|
Non-Operated
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
Williston
Basin
|
13
|
11.5
|
|
17
|
3.2
|
|
27
|
23.5
|
|
29
|
4.7
|
Marcellus
|
-
|
-
|
|
21
|
1.7
|
|
-
|
-
|
|
38
|
3.1
|
Canadian
Waterfloods
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
Other(2)
|
-
|
-
|
|
4
|
0.1
|
|
-
|
-
|
|
15
|
0.4
|
Total
|
13
|
11.5
|
|
42
|
5.0
|
|
27
|
23.5
|
|
82
|
8.2
|
(1)
|
Table may not add due
to rounding.
|
(2)
|
Comprises DJ Basin and
other properties in Canada.
|
Summary of Wells Brought
On-Stream(1)
|
Three months
ended
June 30, 2022
|
|
Six months ended
June 30, 2022
|
|
Operated
|
|
Non-Operated
|
|
Operated
|
|
Non-Operated
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
|
Gross
|
Net
|
Williston
Basin
|
24
|
21.0
|
|
5
|
0.4
|
|
26
|
23.0
|
|
5
|
0.4
|
Marcellus
|
-
|
-
|
|
22
|
1.4
|
|
-
|
-
|
|
47
|
2.9
|
Canadian
Waterfloods
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
Other(2)
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
Total
|
24
|
21.0
|
|
27
|
1.8
|
|
26
|
23.0
|
|
52
|
3.3
|
(1)
|
Table may not add due
to rounding.
|
(2)
|
Comprises DJ Basin and
other properties in Canada.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL
RESULTS
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Financial (US$,
thousands, except ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(Loss)
|
|
$
|
244,406
|
|
$
|
(50,933)
|
|
$
|
277,649
|
|
$
|
(40,584)
|
Adjusted Net
Income(1)
|
|
|
172,251
|
|
|
54,699
|
|
|
318,079
|
|
|
98,521
|
Cash Flow from
Operating Activities
|
|
|
250,860
|
|
|
110,466
|
|
|
446,852
|
|
|
139,128
|
Adjusted Funds
Flow
|
|
|
297,393
|
|
|
149,971
|
|
|
559,288
|
|
|
250,825
|
Dividends to
Shareholders – Declared
|
|
|
9,940
|
|
|
9,088
|
|
|
17,858
|
|
|
14,722
|
Net Debt
|
|
|
545,983
|
|
|
913,729
|
|
|
545,983
|
|
|
913,729
|
Capital
Spending
|
|
|
132,884
|
|
|
105,859
|
|
|
231,898
|
|
|
157,676
|
Property and Land
Acquisitions
|
|
|
1,469
|
|
|
332,185
|
|
|
3,410
|
|
|
829,325
|
Property
Divestments
|
|
|
8,591
|
|
|
(12)
|
|
|
15,172
|
|
|
3,998
|
Net Debt to Adjusted
Funds Flow Ratio
|
|
|
0.5x
|
|
|
2.4x
|
|
|
0.5x
|
|
|
2.4x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial per
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss) –
Basic
|
|
$
|
1.01
|
|
$
|
(0.20)
|
|
$
|
1.15
|
|
$
|
(0.16)
|
Net Income/(Loss) –
Diluted
|
|
|
0.99
|
|
|
(0.20)
|
|
|
1.12
|
|
|
(0.16)
|
Weighted Average Number
of Shares Outstanding (000's) - Basic
|
|
|
239,277
|
|
|
256,750
|
|
|
241,022
|
|
|
250,443
|
Weighted Average Number
of Shares Outstanding (000's) - Diluted
|
|
|
247,216
|
|
|
256,750
|
|
|
248,957
|
|
|
250,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial
Results per BOE(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil &
Natural Gas Sales(4)
|
|
$
|
73.31
|
|
$
|
39.53
|
|
$
|
67.67
|
|
$
|
37.28
|
Commodity Derivative
Instruments
|
|
|
(16.13)
|
|
|
(3.68)
|
|
|
(12.53)
|
|
|
(3.08)
|
Operating
Expenses
|
|
|
(9.74)
|
|
|
(8.55)
|
|
|
(9.88)
|
|
|
(8.18)
|
Transportation
Costs
|
|
|
(4.41)
|
|
|
(3.50)
|
|
|
(4.36)
|
|
|
(3.68)
|
Production
Taxes
|
|
|
(5.11)
|
|
|
(2.95)
|
|
|
(4.70)
|
|
|
(2.57)
|
General and
Administrative Expenses
|
|
|
(1.10)
|
|
|
(1.04)
|
|
|
(1.22)
|
|
|
(1.28)
|
Cash Share-Based
Compensation
|
|
|
(0.04)
|
|
|
(0.23)
|
|
|
(0.14)
|
|
|
(0.27)
|
Interest, Foreign
Exchange and Other Expenses
|
|
|
(0.67)
|
|
|
(1.40)
|
|
|
(0.67)
|
|
|
(1.34)
|
Current Income Tax
Recovery/(Expense)
|
|
|
(1.40)
|
|
|
(0.40)
|
|
|
(1.01)
|
|
|
(0.23)
|
Adjusted Funds
Flow
|
|
$
|
34.71
|
|
$
|
17.78
|
|
$
|
33.16
|
|
$
|
16.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED OPERATING
RESULTS
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Average Daily
Production(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil
(bbls/day)
|
|
|
48,213
|
|
|
49,649
|
|
|
47,925
|
|
|
41,923
|
Natural Gas Liquids
(bbls/day)
|
|
|
8,653
|
|
|
7,941
|
|
|
8,516
|
|
|
6,613
|
Natural Gas
(Mcf/day)
|
|
|
223,653
|
|
|
210,572
|
|
|
220,400
|
|
|
208,273
|
Total
(BOE/day)
|
|
|
94,142
|
|
|
92,685
|
|
|
93,174
|
|
|
83,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Crude Oil and Natural
Gas Liquids
|
|
|
60 %
|
|
|
62 %
|
|
|
61 %
|
|
|
58 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Selling
Price(3)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil
(per bbl)
|
|
$
|
108.77
|
|
$
|
62.50
|
|
$
|
100.46
|
|
$
|
58.75
|
Natural Gas Liquids
(per bbl)
|
|
|
33.31
|
|
|
18.47
|
|
|
35.49
|
|
|
22.46
|
Natural Gas
(per Mcf)
|
|
|
6.11
|
|
|
1.96
|
|
|
5.38
|
|
|
2.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Wells
Drilled
|
|
|
16.5
|
|
|
5.0
|
|
|
31.7
|
|
|
5.0
|
(1)
|
This non‑GAAP measure
may not be directly comparable to similar measures presented by
other entities See "Non-GAAP and Other Financial
Measures" section in this news release.
|
(2)
|
Non‑cash amounts have
been excluded.
|
(3)
|
Based on net production
volumes. See "Basis of Presentation" section in this news
release.
|
(4)
|
Before transportation
costs and commodity derivative instruments.
|
Condensed Consolidated Balance
Sheets
|
|
|
|
|
|
|
|
(US$ thousands) unaudited
|
|
|
June 30, 2022
|
|
December 31, 2021
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
25,406
|
|
$
|
61,348
|
Accounts
receivable
|
|
|
|
387,811
|
|
|
227,988
|
Other current
assets
|
|
|
|
8,480
|
|
|
10,956
|
Derivative financial
assets
|
|
|
|
3,547
|
|
|
5,668
|
|
|
|
|
425,244
|
|
|
305,960
|
Property, plant and
equipment:
|
|
|
|
|
|
|
|
Crude oil and natural
gas properties (full cost method)
|
|
|
|
1,380,251
|
|
|
1,253,505
|
Other capital
assets
|
|
|
|
12,152
|
|
|
13,887
|
Property, plant and
equipment
|
|
|
|
1,392,403
|
|
|
1,267,392
|
Other long-term
assets
|
|
|
|
7,440
|
|
|
9,756
|
Right-of-use
assets
|
|
|
|
22,772
|
|
|
26,118
|
Derivative financial
assets
|
|
|
|
2,298
|
|
|
—
|
Deferred income tax
asset
|
|
|
|
294,854
|
|
|
380,858
|
Total
Assets
|
|
|
$
|
2,145,011
|
|
$
|
1,990,084
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
|
463,230
|
|
$
|
367,008
|
Income tax
payable
|
|
|
|
11,600
|
|
|
—
|
Current portion of
long-term debt
|
|
|
|
80,600
|
|
|
100,600
|
Derivative financial
liabilities
|
|
|
|
171,904
|
|
|
143,200
|
Current portion of
lease liabilities
|
|
|
|
8,327
|
|
|
10,618
|
|
|
|
|
735,661
|
|
|
621,426
|
Long-term
debt
|
|
|
|
490,789
|
|
|
601,171
|
Asset retirement
obligation
|
|
|
|
162,965
|
|
|
132,814
|
Derivative financial
liabilities
|
|
|
|
8,054
|
|
|
7,098
|
Lease
liabilities
|
|
|
|
17,017
|
|
|
18,265
|
|
|
|
|
678,825
|
|
|
759,348
|
Total
Liabilities
|
|
|
|
1,414,486
|
|
|
1,380,774
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
Share capital –
authorized unlimited common shares, no par value
Issued and outstanding:
June 30, 2022 – 235 million shares
December 31, 2021 – 244 million shares
|
|
|
|
3,001,604
|
|
|
3,094,061
|
Paid-in
capital
|
|
|
|
41,843
|
|
|
50,881
|
Accumulated
deficit
|
|
|
|
(2,008,253)
|
|
|
(2,238,325)
|
Accumulated other
comprehensive loss
|
|
|
|
(304,669)
|
|
|
(297,307)
|
|
|
|
|
730,525
|
|
|
609,310
|
Total Liabilities
& Shareholders' Equity
|
|
|
$
|
2,145,011
|
|
$
|
1,990,084
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements
of Income/(Loss) and Comprehensive Income/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June 30,
|
|
June 30,
|
(US$ thousands,
except per share amounts) unaudited
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil and natural
gas sales
|
|
|
$
|
628,017
|
|
$
|
333,422
|
|
$
|
1,141,169
|
|
$
|
561,812
|
Commodity derivative
instruments gain/(loss)
|
|
|
|
(47,553)
|
|
|
(161,822)
|
|
|
(254,363)
|
|
|
(218,085)
|
|
|
|
|
580,464
|
|
|
171,600
|
|
|
886,806
|
|
|
343,727
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
83,366
|
|
|
72,159
|
|
|
166,610
|
|
|
123,321
|
Transportation
|
|
|
|
37,830
|
|
|
29,475
|
|
|
73,637
|
|
|
55,402
|
Production
taxes
|
|
|
|
43,827
|
|
|
24,923
|
|
|
79,182
|
|
|
38,768
|
General and
administrative
|
|
|
|
14,687
|
|
|
10,134
|
|
|
32,268
|
|
|
22,975
|
Depletion, depreciation
and accretion
|
|
|
|
70,090
|
|
|
76,444
|
|
|
136,781
|
|
|
113,142
|
Asset
impairment
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,420
|
Interest
|
|
|
|
6,098
|
|
|
7,777
|
|
|
12,153
|
|
|
13,410
|
Foreign exchange
(gain)/loss
|
|
|
|
(3,232)
|
|
|
7,778
|
|
|
(2,345)
|
|
|
7,754
|
Transaction costs and
other expense/(income)
|
|
|
|
(309)
|
|
|
(563)
|
|
|
12,388
|
|
|
3,056
|
|
|
|
|
252,357
|
|
|
228,127
|
|
|
510,674
|
|
|
381,248
|
Income/(Loss) before
taxes
|
|
|
|
328,107
|
|
|
(56,527)
|
|
|
376,132
|
|
|
(37,521)
|
Current income tax
expense
|
|
|
|
12,000
|
|
|
3,415
|
|
|
17,000
|
|
|
3,415
|
Deferred income tax
expense/(recovery)
|
|
|
|
71,701
|
|
|
(9,009)
|
|
|
81,483
|
|
|
(352)
|
Net
Income/(Loss)
|
|
|
$
|
244,406
|
|
$
|
(50,933)
|
|
$
|
277,649
|
|
$
|
(40,584)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income/(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain/(loss)
on foreign currency translation
|
|
|
|
1,977
|
|
|
88
|
|
|
1,357
|
|
|
(719)
|
Foreign exchange
gain/(loss) on net investment hedge, net of tax
|
|
|
|
(14,094)
|
|
|
10,178
|
|
|
(8,719)
|
|
|
15,892
|
Total Comprehensive
Income/(Loss)
|
|
|
$
|
232,289
|
|
$
|
(40,667)
|
|
$
|
270,287
|
|
$
|
(25,411)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss)
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
1.01
|
|
$
|
(0.20)
|
|
$
|
1.15
|
|
$
|
(0.16)
|
Diluted
|
|
|
$
|
0.99
|
|
$
|
(0.20)
|
|
$
|
1.12
|
|
$
|
(0.16)
|
Condensed Consolidated Statements
of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June 30,
|
|
June 30,
|
(US$ thousands) unaudited
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
|
$
|
244,406
|
|
$
|
(50,933)
|
|
$
|
277,649
|
|
$
|
(40,584)
|
Non-cash items
add/(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation
and accretion
|
|
|
|
70,090
|
|
|
76,444
|
|
|
136,781
|
|
|
113,142
|
Asset
impairment
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,420
|
Changes in fair value
of derivative instruments
|
|
|
|
(91,275)
|
|
|
130,280
|
|
|
42,057
|
|
|
170,638
|
Deferred income tax
expense/(recovery)
|
|
|
|
71,701
|
|
|
(9,009)
|
|
|
81,483
|
|
|
(352)
|
Foreign exchange
(gain)/loss on debt and working capital
|
|
|
|
(3,292)
|
|
|
6,848
|
|
|
(2,121)
|
|
|
7,005
|
Share-based
compensation and general and administrative
|
|
|
|
5,634
|
|
|
(19)
|
|
|
10,294
|
|
|
783
|
Other
expense
|
|
|
|
(97)
|
|
|
(1,917)
|
|
|
12,556
|
|
|
(1,917)
|
Amortization of debt
issuance costs
|
|
|
|
351
|
|
|
252
|
|
|
704
|
|
|
309
|
Translation of U.S.
dollar cash held in parent company
|
|
|
|
(125)
|
|
|
(1,975)
|
|
|
(115)
|
|
|
(1,619)
|
Asset retirement
obligation settlements
|
|
|
|
(2,349)
|
|
|
(1,155)
|
|
|
(11,144)
|
|
|
(6,780)
|
Changes in non-cash
operating working capital
|
|
|
|
(44,184)
|
|
|
(38,350)
|
|
|
(101,292)
|
|
|
(104,917)
|
Cash flow from/(used
in) operating activities
|
|
|
|
250,860
|
|
|
110,466
|
|
|
446,852
|
|
|
139,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawings
from/(repayment of) bank credit facilities
|
|
|
|
48,709
|
|
|
275,000
|
|
|
(55,700)
|
|
|
675,000
|
Repayment of senior
notes
|
|
|
|
(79,600)
|
|
|
(81,600)
|
|
|
(79,600)
|
|
|
(81,600)
|
Debt issuance
costs
|
|
|
|
—
|
|
|
(1,787)
|
|
|
—
|
|
|
(4,621)
|
Proceeds from the
issuance of shares
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,339
|
Purchase of common
shares under Normal Course Issuer Bid
|
|
|
|
(92,928)
|
|
|
—
|
|
|
(130,135)
|
|
|
—
|
Share-based
compensation – tax withholdings settled in cash
|
|
|
|
—
|
|
|
—
|
|
|
(11,567)
|
|
|
(3,551)
|
Dividends
|
|
|
|
(9,940)
|
|
|
(11,134)
|
|
|
(17,858)
|
|
|
(16,471)
|
Cash flow from/(used
in) financing activities
|
|
|
|
(133,759)
|
|
|
180,479
|
|
|
(294,860)
|
|
|
667,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and office
expenditures
|
|
|
|
(115,040)
|
|
|
(75,202)
|
|
|
(190,067)
|
|
|
(115,547)
|
Bruin
acquisition
|
|
|
|
—
|
|
|
(2,008)
|
|
|
—
|
|
|
(420,249)
|
Dunn County
acquisition
|
|
|
|
—
|
|
|
(304,888)
|
|
|
—
|
|
|
(304,888)
|
Property and land
acquisitions
|
|
|
|
(1,469)
|
|
|
(1,552)
|
|
|
(3,410)
|
|
|
(4,023)
|
Property
divestments
|
|
|
|
(4,462)
|
|
|
(12)
|
|
|
2,119
|
|
|
3,998
|
Cash flow from/(used
in) investing activities
|
|
|
|
(120,971)
|
|
|
(383,662)
|
|
|
(191,358)
|
|
|
(840,709)
|
Effect of exchange rate
changes on cash & cash equivalents
|
|
|
|
6,545
|
|
|
2,969
|
|
|
3,424
|
|
|
5,258
|
Change in cash and cash
equivalents
|
|
|
|
2,675
|
|
|
(89,748)
|
|
|
(35,942)
|
|
|
(29,227)
|
Cash and cash
equivalents, beginning of period
|
|
|
|
22,731
|
|
|
150,466
|
|
|
61,348
|
|
|
89,945
|
Cash and cash
equivalents, end of period
|
|
|
$
|
25,406
|
|
$
|
60,718
|
|
$
|
25,406
|
|
$
|
60,718
|
About Enerplus
Enerplus is an independent North American oil and gas
exploration and production company focused on creating long-term
value for its shareholders through a disciplined, returns-based
capital allocation strategy and a commitment to safe, responsible
operations. For more information, visit the Company's website at
www.enerplus.com.
Follow @EnerplusCorp on Twitter at
https://twitter.com/EnerplusCorp.
NOTICE REGARDING INFORMATION
CONTAINED IN THIS NEWS RELEASE
Currency and Accounting Principles
All amounts in this news release are stated in U.S. 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 and Other Financial
Measures".
Barrels of Oil Equivalent
This news release contains references to "BOE" (barrels of
oil equivalent), "MBOE" (one thousand barrels of oil equivalent),
and "MMBOE" (one million 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. BOE, MBOE and MMBOE 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.
Basis of Presentation
All production volumes presented in this news release are
reported on a "net" basis (the Company's working interest share
after deduction of royalty obligations, plus the Company's royalty
interests), unless expressly indicated that it is being presented
on a "gross" basis. Previously, the Company presented production
volumes on a "company interest" basis, which was calculated as its
working interest share before deduction of royalties plus the
Company's royalty interests. With these changes, production volumes
presented by the Company on a "net" basis are expected to be lower
than those presented historically.
All references to "liquids" in this news release include
light and medium crude oil, heavy oil and tight oil (all together
referred to as "crude oil") and NGLs on a combined basis. All
references to "natural gas" in this news release include
conventional natural gas and shale gas on a combined basis.
Readers are urged to review the 2021 annual MD&A and
financial statements filed on SEDAR and as part of our Form 40-F on
EDGAR concurrently with this news release for more complete
disclosure on our operations.
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", "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: the recently announced sale of certain assets in
Canada and the expected impact
thereof on Enerplus' operations, financial results and five year
outlook; updated 2022 production guidance; capital spending
guidance and expected capital spending levels in 2022 and future
years; expectations regarding free cash flow generation and
reinvestment rates; expected operating strategy in 2022 and
expectations regarding our drilling program and well costs; 2022
average production volumes and the anticipated production mix; the
proportion of our anticipated oil and gas production that is hedged
and the expected effectiveness of such hedges in protecting our
cash flow from operating activities and adjusted funds flow; oil
and natural gas prices and differentials and expectations regarding
the market environment and our commodity risk management program in
2022; updated and existing 2022 Bakken and Marcellus differential
guidance; expectations regarding realized oil and natural gas
prices; expected operating, transportation and cash G&A
expenses and tax expenses and updated 2022 guidance with respect
thereto; expectations regarding return of cash to our shareholders,
and timing thereof; expectations regarding increases to dividends
and timing thereof; expectations regarding funding of return of
cash and dividends from free cash flow; expectations regarding
renewal of our normal course issuer bid, including timing and size
thereof; and our five year outlook.
The forward-looking information contained in this news
release reflects several material factors and expectations and
assumptions of Enerplus including, without limitation: that we will
conduct our operations and achieve results of operations as
anticipated; that Enerplus will realize the expected impact
of the recently announced sale of certain assets in Canada; the continued operation of the Dakota
Access Pipeline; that our development plans will achieve the
expected results; that lack of adequate infrastructure will not
result in curtailment of production and/or reduced realized prices
beyond our current expectations; current and anticipated commodity
prices, differentials and cost assumptions; the general continuance
of current or, where applicable, assumed industry conditions, the
impact of inflation, weather conditions, storage fundamentals and
expectations regarding the duration and overall impact of COVID-19;
the continuation of assumed tax, royalty and regulatory regimes;
the accuracy of the estimates of our reserve and contingent
resource volumes; the continued availability of adequate debt
and/or equity financing and adjusted funds flow to fund our
capital, operating and working capital requirements, and dividend
payments as needed; the ability to fund expected returns of cash
and increased dividends from free cash flow as expected and
discussed in this news release and the ability to execute our share
repurchase program as currently expected and in compliance with
applicable Canadian and US rules; our ability to comply with our
debt covenants; the availability of third party services; expected
transportation expenses; the extent of our liabilities; and the
availability of technology and process to achieve environmental
targets. In addition, our 2022 guidance described in this news
release is based on rest of year commodity prices of: $90.00/bbl WTI and $6.50/Mcf NYMEX and a CDN/USD exchange rate of
0.78. 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. Current
conditions, economic and otherwise, render assumptions, although
reasonable when made, subject to increased uncertainty.
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:
continued instability, or further deterioration, in global economic
and market environment, including from COVID-19, inflation and/or
the Ukraine/Russia conflict and heightened geopolitical
risks; decreases in commodity prices or volatility in commodity
prices; changes in realized prices of Enerplus' products from those
currently anticipated; changes in the demand for or supply of our
products; unanticipated operating results, results from our capital
spending activities or production declines; legal proceedings or
other events inhibiting or preventing operation of the Dakota
Access Pipeline; curtailment of our 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 our capital plans or by third party operators of our
properties; increased debt levels or debt service requirements;
inability to comply with debt covenants under our bank credit
facilities and/or outstanding senior notes; inaccurate estimation
of our oil and gas reserve and contingent resource 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 and third party
service providers; changes in law or government programs or
policies in Canada or the United States; failure to complete the
recently announced sale of certain assets in Canada; and certain other risks detailed from
time to time in our public disclosure documents (including, without
limitation, those risks identified in our first quarter 2022
MD&A, our annual information form for the year ended
December 31, 2021, our 2021 annual
MD&A and Form 40-F as at December 31,
2021) which are available at www.sedar.com, www.sec.gov and
through Enerplus' website at www.enerplus.com.
The forward-looking information contained in this news
release speaks only as of the date of this news release. Enerplus
does not undertake any obligation to publicly update or revise any
forward-looking information contained herein, except as required by
applicable laws.
NON-GAAP AND OTHER FINANCIAL
MEASURES
Non-GAAP Financial
Measures
This news release includes references to certain non-GAAP
financial measures and non-GAAP ratios used by the Company to
evaluate its financial performance, financial position or cash
flow. Non-GAAP financial measures are financial measures disclosed
by a company that (a) depict historical or expected future
financial performance, financial position or cash flow of a
company, (b) with respect to their composition, exclude amounts
that are included in, or include amounts that are excluded from,
the composition of the most directly comparable financial measure
disclosed in the primary financial statements of the company, (c)
are not disclosed in the financial statements of the company and
(d) are not a ratio, fraction, percentage or similar
representation. Non-GAAP ratios are financial measures disclosed by
a company that are in the form of a ratio, fraction, percentage or
similar representation that has a non-GAAP financial measure as one
or more of its components, and that are not disclosed in the
financial statements of the company.
These non-GAAP financial measures and non-GAAP ratios do not
have standardized meanings or definitions as prescribed by
U.S. GAAP and may not be comparable with the calculation of
similar financial measures by other entities. For each
measure, we have indicated the composition of the measure,
identified the GAAP equivalency to the extent one exists, provided
comparative detail where appropriate, indicated the reconciliation
of the measure to the mostly directly comparable GAAP financial
measure and provided details on the usefulness of the measure for
the reader. These non-GAAP financial measures and non-GAAP ratios
should not be considered as a substitute for, or superior to,
measures of financial performance prepared in accordance with
GAAP.
"Adjusted net income/(loss)" and "Adjusted net
income/(loss) per share (diluted)" are used by Enerplus and are
useful to investors and securities analysts in evaluating the
financial performance of the company by adjusting for certain
unrealized items and other items that the company considers
appropriate to adjust given their irregular nature. The most
directly comparable GAAP measure is net income/(loss). No income
tax rate adjustments or valuation allowances on deferred taxes were
recorded for the three months ended June 30,
2022 and 2021. Adjusted net income per share is calculated
using adjusted net income, as reconciled below, divided by the
number of common shares outstanding on a diluted basis during the
applicable period as determined in accordance with U.S. GAAP. The
calculation follows:
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
($ millions)
|
|
2022
|
|
2021
|
|
Net
income/(loss)
|
|
$
|
244.4
|
|
$
|
(50.9)
|
|
Unrealized commodity
derivative instrument (gain)/loss
|
|
|
(91.3)
|
|
|
130.3
|
|
Asset
impairment
|
|
|
—
|
|
|
—
|
|
Other expense related
to investing activities
|
|
|
—
|
|
|
—
|
|
Unrealized foreign
exchange (gain)/loss
|
|
|
(3.3)
|
|
|
6.8
|
|
Tax effect on above
items
|
|
|
22.5
|
|
|
(31.5)
|
|
Adjusted net
income/(loss)
|
|
$
|
172.3
|
|
$
|
54.7
|
|
Adjusted net
income/(loss) per share (diluted)
|
|
$
|
0.70
|
|
$
|
0.21
|
|
"Free cash flow" is used by Enerplus and is useful to
investors and securities analysts in analyzing operating and
financial performance, leverage and liquidity. Free cash flow is
calculated as adjusted funds flow minus capital spending. The most
directly comparable GAAP measure is cash flow from operating
activities
|
Three months
ended
June 30,
|
($ millions)
|
2022
|
|
2021
|
Cash flow from/(used
in) operating activities
|
$
|
250.9
|
|
$
|
110.5
|
Asset retirement
obligation settlements
|
|
2.3
|
|
|
1.2
|
Changes in non-cash
operating working capital
|
|
44.2
|
|
|
38.3
|
Adjusted funds
flow
|
$
|
297.4
|
|
$
|
150.0
|
Capital
spending
|
|
(132.9)
|
|
|
(105.9)
|
Free cash
flow
|
$
|
164.5
|
|
$
|
44.1
|
Other Financial Measures
CAPITAL MANAGEMENT MEASURES
Capital management measures are financial measures disclosed by
a company that (a) are intended to enable an individual to evaluate
a company's objectives, policies and processes for managing the
company's capital, (b) are not a component of a line item disclosed
in the primary financial statements of the company, (c) are
disclosed in the notes to the financial statements of the company,
and (d) are not disclosed in the primary financial statements of
the company. The following section provides an explanation of the
composition of those capital management measures if not previously
provided:
"Adjusted funds flow" is used by Enerplus and is
useful to investors and securities analysts, in analyzing operating
and financial performance, leverage and liquidity. The most
directly comparable GAAP measure is cash flow from operating
activities. Adjusted funds flow is calculated as cash flow from
operating activities before asset retirement obligation
expenditures and changes in non‑cash operating working capital.
"Net Debt" is calculated as current and long-term
debt associated with senior notes plus any outstanding Bank Credit
Facilities balances, less cash and cash equivalents. "Net debt" is
useful to investors and securities analysts in analyzing financial
liquidity and Enerplus considers net debt to be a key measure of
capital management. For further details, see Note 8 to the Interim
Financial Statements.
"Net debt to adjusted funds flow ratio" is used by
Enerplus and is useful to investors and securities analysts in
analyzing leverage and liquidity. The net debt to adjusted funds
flow ratio is calculated as net debt divided by a trailing
twelve months of adjusted funds flow. There is no directly
comparable GAAP equivalent for this measure, and it is not
equivalent to any of our debt covenants.
SUPPLEMENTARY FINANCIAL MEASURES
Supplementary financial measures are financial measures
disclosed by a company that (a) are, or are intended to be,
disclosed on a periodic basis to depict the historical or expected
future financial performance, financial position or cash flow of a
company, (b) are not disclosed in the financial statements of the
company, (c) are not non-GAAP financial measures, and (d) are not
non-GAAP ratios. The following section provides an explanation of
the composition of those supplementary financial measures if not
previously provided:
"Capital spending" Capital and office expenditures,
excluding other capital assets/office capital and property and land
acquisitions and divestments.
"Cash general and administrative expenses" or "Cash
G&A expenses" General and administrative expenses that are
settled through cash payout, as opposed to expenses that relate to
accretion or other non-cash allocations that are recorded as part
of general and administrative expenses.
"Cash share-based compensation" or "Cash SBC
expenses" Share-based compensation that is settled by way of
cash payout, as opposed to equity settled.
"Reinvestment rate" Comparing the amount of our
capital spending as compared to adjusted funds flow (as a
percentage).
Electronic copies of Enerplus' second quarter 2022 and annual
2021 Financial Statements and associated MD&As, along with
other public information including investor presentations, are or
will be available on the Company's website at www.enerplus.com. For
further information, please contact Investor Relations at
1-800-319-6462 or email investorrelations@enerplus.com.
SOURCE Enerplus Corporation