CALGARY - Enerplus Corporation ('Enerplus' or the 'Company') (TSX: ERF) (NYSE: ERF) today announced financial and operating results for the first quarter of 2021 and an increase to its dividend.
The Company reported first quarter 2021 cash flow from operating activities and adjusted funds flow of $37.2 million and $128.0 million, respectively, compared to $122.7 million and $113.2 million, respectively, in the first quarter of 2020. Cash flow from operating activities decreased from the prior year period primarily due to changes in working capital. Adjusted funds flow increased from the prior year period primarily due to improved realized commodity prices during the first quarter of 2021.
HIGHLIGHTS
Adjusted funds flow was $128.0 million in the first quarter, which exceeded capital spending of $65.5 million, generating free cash flow of $62.5 million
Delivered first quarter production of 91,671 BOE per day, including liquids of 49,046 barrels per day
Completed two accretive acquisitions in the Williston Basin year to date, increasing Enerplus' acreage position in North Dakota by over four times to 296,000 net acres and extending its high-return development inventory
Expect to deliver a 20% total well cost reduction in North Dakota in 2021 compared to 2019 through continued technology application and innovation
Maintaining a solid financial position: net debt to adjusted funds flow ratio expected to be 1.3x or less by year-end 2021 based on US$55 per barrel WTI (annualized for 2021 acquisitions); current undrawn capacity on bank credit facility of approximately US$750 million
Increasing the dividend and transitioning to quarterly payments: new quarterly dividend of $0.033 per share, a 10% increase from the current monthly dividend of $0.01 per share on an annualized basis, will be payable on June 15, 2021 to shareholders of record on May 28, 2021. Given the April and May dividends have already been paid or declared, the change to quarterly payments beginning in June represents an incremental dividend payment of $5.6 million in the second quarter of 2021
'It has been a constructive start to the year for us, having announced and closed two strategic acquisitions in the Bakken,' said Ian C. Dundas, President and CEO. 'These acquisitions are expected to be highly accretive to our per share metrics, support continued operational efficiencies and extend our core Bakken development inventory. They are also helping to drive a step change in the free cash flow generation of our business. As a result, and consistent with our commitment to sustainably growing our return of capital to shareholders, we are increasing our dividend. As we continue integration efforts, we remain focused on delivering safe, consistent execution under a disciplined capital allocation framework.'
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities laws ('forward-looking information'). The use of any of the words 'expect', 'anticipate', 'continue', 'estimate', 'guidance', 'believes' and 'plans' 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: expected benefits of the Hess asset and Bruin acquisition; expected impact of the Hess asset and Bruin acquisitions on Enerplus' operations and financial results; anticipated impact of the Hess asset and Bruin acquisitions on Enerplus' future costs and expenses; expectations regarding the duration and overall impact of COVID-19; expected capital spending levels in 2021 and in the future, timing thereof and the impact thereof on our production levels and land holdings; expected production volumes and 2021 and future production guidance; expected operating strategy in 2021; 2021 average production volumes, timing thereof 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 adjusted funds flow in 2021 and the future; the results from our drilling program and the timing of related production and ultimate well recoveries; oil and natural gas prices and differentials, our commodity risk management program in 2021 and expected hedging gains; expectations regarding our realized oil and natural gas prices; expected operating, transportation, cash G&A and financing costs; expected reduction in well costs; future royalty rates on our production and future production taxes; net debt to adjusted funds-flow ratio, financial capacity and liquidity and capital resources to fund capital spending, dividends and working capital requirements; expectations regarding payment of increased dividends.
The forward-looking information contained in this news release reflects several material factors, expectations and assumptions including, without limitation: that we will conduct our operations and achieve results of operations as anticipated, including considering the Hess asset and Bruin acquisition; that our development plans will achieve the expected results; that a lack of adequate infrastructure and/or low commodity price environment will not result in curtailment of production and/or reduced realized prices beyond our current expectations; current and estimated commodity prices, differentials and cost assumptions; the continued ability to operate DAPL and lack of court order restricting its operation, that our development plans will achieve the expected results; the general continuance of current or, where applicable, assumed industry conditions, including 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 continued availability and sufficiency of our adjusted funds flow and availability under our bank credit facility to fund our working capital deficiency; our ability to comply with our debt covenants; the availability of third party services; the extent of our liabilities; the rates used to calculate the amount of our future abandonment and reclamation costs and asset retirement obligations; the availability of technology and processes to achieve environmental targets. In addition, Enerplus' 2021 outlook contained in this news release is based on the following: a WTI price of between US$50 and US$55.00/bbl, a NYMEX price of US$3.00/Mcf, a Bakken crude oil price differential of US$3.25/bbl below WTI and a USD/CDN exchange rate of 1.27. We believe 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.
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; continued low commodity prices environment or further volatility in commodity prices; changes in realized prices of Enerplus' products; changes in the demand for or supply of our products; failure to realize the anticipated benefits of the Hess asset and Bruin acquisitions; unanticipated operating results, results from our capital spending activities or production declines; the legal proceedings in connection with DAPL; 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 facility and 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 and certain other risks detailed from time to time in our public disclosure documents (including, without limitation, those risks and contingencies described under 'Risk Factors and Risk Management' in Enerplus' 2020 MD&A and in our other public filings).
The forward-looking information contained in this press release speaks only as of the date of this press release, and we do not assume any obligation to publicly update or revise such forward-looking information to reflect new events or circumstances, except as may be required pursuant to applicable laws.
NON-GAAP MEASURES
In this news release, Enerplus uses the terms 'adjusted funds flow', 'adjusted net income', 'free cash flow' and 'net debt to adjusted funds flow ratio' measures to analyze operating performance, leverage and liquidity. 'Adjusted 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. 'Adjusted net income' is calculated as net income adjusted for unrealized derivative instrument gain/loss, asset impairment, gain on divestment of assets, unrealized foreign exchange gain/loss, and the tax effect of these items. 'Free cash flow' is calculated as adjusted funds flow minus capital spending. 'Net debt to adjusted funds flow' is calculated as total debt net of cash, including restricted cash, divided by adjusted funds flow.
Enerplus believes that, in addition to cash flow from operating activities, net earnings and other measures prescribed by U.S. GAAP, the terms 'adjusted funds flow', 'adjusted net income', 'free cash flow' and 'net debt to adjusted funds flow' are useful supplemental measures as they provide an indication of the results generated by Enerplus' principal business activities. However, these measures are not measures recognized by U.S. GAAP and do not have a standardized meaning prescribed by U.S. GAAP. Therefore, these measures, as defined by Enerplus, may not be comparable to similar measures presented by other issuers.
Electronic copies of Enerplus Corporation's First Quarter 2021 MD&A and Financial Statements, along with other public information including investor presentations, are available on its website at www.enerplus.com. Shareholders may, upon request, receive a printed copy of the Company's audited financial statements at any time.
Contact:
Tel: 1-800-319-6462
Email: investorrelations@enerplus.com
ENERPLUS CORPORATION 
