Thursday, Dec 05, 2013 CALGARY, Dec. 2, 2013 /CNW/ - Enerplus Corporation ("Enerplus") (TSX: ERF) (NYSE: ERF) is pleased to announce that based upon continued strong operational performance during the months of October and November, we are increasing our annual average production forecast for 2013 to 89,000 BOE/day from 87,500 BOE/day. Production volumes during the fourth quarter are expected to average approximately 92,000 BOE/day due primarily to higher natural gas production.
In addition, the Board of Directors of Enerplus has approved the capital program for 2014 which includes the following highlights:
-- We expect to deliver 10% production growth in 2014, targeting annual average production between 96,000 BOE/day and 100,000 BOE/day.
-- Crude oil production is expected to grow by 12%, resulting in a production mix of 48% crude oil and natural gas liquids and 52% natural gas.
-- Capital spending is planned at $760 million, up 11% from 2013, with two thirds of our program directed to crude oil projects.
-- Based upon our forecast exit volumes, capital efficiencies have significantly improved in 2013 to under $30,000/BOE/day. We expect to achieve similar capital efficiencies in 2014.
-- We expect a reduction in both operating costs and general and administrative costs per BOE.
Production Growth
Based upon our capital spending plans, we forecast average production in 2014 will range between 96,000 BOE/day and 100,000 BOE/day. The mid-point of this range reflects a 10% increase in production volumes year-over-year and 9% per share. Crude oil and natural gas liquids production is expected to increase by approximately 12%. We expect continued growth from our U.S. oil properties at Fort Berthold where production will increase by roughly 15% in 2014, driving our light crude oil volumes to represent 67% of our total oil production. Natural gas liquids are expected to be approximately 4% of total production. Our total corporate natural gas production is expected to average just over 300 MMcf/day next year, up 7% from 2013, with the majority of the growth attributable to the Marcellus.
As a result of the growth in production from our Bakken/Three Forks and Marcellus properties, over 50% of our corporate production volumes will be attributable to our U.S. assets. Our production mix is expected to remain at 48% crude oil and natural gas liquids and 52% natural gas. With the acquisition of additional interests in the Marcellus combined with the growth in our earlier stage plays in North Dakota and the Wilrich, our corporate production decline rate is expected to marginally increase to 25% in 2014 from 24% in 2013.
Capital Spending
We are targeting a capital spending program of $760 million in 2014, up 11% from our 2013 capital forecast of $685 million. We plan to continue to focus our activities on oil projects with two thirds of our budget directed to our Bakken/Three Forks oil projects in the United States and our Canadian oil waterflood properties. The remainder of our budget will be directed to our core natural gas assets in the Marcellus and in the Deep Basin region as we move into development in the Wilrch and continue to evaluate the Duvernay.
NON-GAAP MEASURES
In this news release, we use the term "adjusted payout ratio" to analyze operating performance, leverage and liquidity. We calculate "adjusted payout ratio" as cash dividends to shareholders, net of our stock dividends (and for 2012 comparative purposes, our DRIP proceeds), plus capital spending (including office capital) divided by funds flow.
Enerplus believes that, in addition to net earnings and other measures prescribed by IFRS, the term "adjusted payout ratio" is a useful supplemental measure as it provides an indication of the results generated by Enerplus' principal business activities. However, this measure is not recognized by GAAP and does not have a standardized meaning prescribed by IFRS. Therefore, this measure, as defined by Enerplus, may not be comparable to similar measures presented by other issuers.
SOURCE Enerplus Corporation
