Enerplus Earnings Hit by Lower Production and Prices

Enerplus Corp. saw its fourth quarter 2023 net income slip to $116.7 million from $330.7 million for the corresponding quarter a year prior.

In a media release, the company said that the fourth quarter 2022 was positively impacted by the sale of Canadian assets. The fourth quarter of 2023 was severely impacted by lower production and commodity prices.

Total production for the fourth quarter of 2023 was 103,543 barrels of oil equivalent per day (boepd), a decrease of 3.0 percent compared to the same period in 2022. Liquids production in the fourth quarter was 67,097 bpd, an increase of 3.0 percent compared to the same period in 2022.

Fourth quarter production exceeded the top end of Enerplus’ total and liquids production guidance ranges of 95,000 to 99,000 boepd and 60,500 to 64,500 bpd respectively.

For the full year 2023, Enerplus reported a net income of $456.1 million, down from a net income of $914.3 million for 2022. Total production for 2023 was 100,015 boepd, broadly flat compared to 2022. Liquids production in 2023 was 62,208 bpd, an increase of 1.0 percent compared to 2022. Liquids production increased by 9.0 percent year-over-year when adjusted for the Canadian asset divestments completed in 2022.

The company said its 2023 production exceeded the top end of the total and liquids production guidance ranges of 98,000 to 99,000 beopd and 60,500 to 61,500 bpd respectively.

"2023 marked another year of solid operational and financial performance, further demonstrating the quality of our team and North Dakota Bakken position", said Ian C. Dundas, President and CEO. "We exceeded production targets within a disciplined capital allocation framework, helping to drive free cash flow of over $400 million. Consistent with our track record, we returned significant cash to shareholders, over 70 percent of free cash flow in 2023, through dividends and share repurchases, while also reducing net debt by 46 percent".

On February 21, 2024, Enerplus entered into a merger agreement with Chord under which Enerplus shareholders will receive 0.10125 shares of Chord common stock and $1.84 in cash for each share of Enerplus (90 percent stock and 10 percent cash consideration). The transaction, with an enterprise value of $11 billion, is subject to various approvals and conditions and is expected to be completed mid-2024. Once the transaction is complete Chord shareholders will own approximately 67 percent of the combined company and Enerplus shareholders will own approximately 33 percent.

According to a joint statement, the combined company is expected to be a premier operator in the Williston Basin, with approximately 1.3 million net acres (98 percent Williston). Oil is expected to be approximately 56 percent of the combined company's production.

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