Enerplus (ERF) 4 Nov 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen and welcome to Enerplus Q3 2022 Results Conference Call. [Operator Instructions] This call is being recorded on Friday, November 4th, 2022. I would now like to turn the call over to Drew Mair, Manager of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. the joining for you call. Thank

started, Before advisories release. note the take at we the news get located quarter end of third please of our

financials GAAP. with in been Our U.S. have prepared accordance

net Jodi Hutchings, Our are Chief our Officer; and financial Chief this Labrie, specified. are production figures President morning Senior Executive VP Senior and otherwise of U.S. Operating unless am reported a and our dollars volumes in VP I Senior royalty and after Jenson Financial Morihira, on with basis Wade and Officer; deduction Officer; VP, here Dundas, Ian Finance. Chief Shaina

Following turn the call it our for will Ian. open to I that, discussion, we over will questions. up With

for Thank morning, Well, us good you joining today. everyone.

the quarter Total from Our up XX% liquids were with third quarter. outperforming continued positive continued operating momentum our second volumes up -- production XX%, this forecast. through year

through including strong and per XXX,XXX Canadian the day, to account are production day. barrels the of in fourth This guidance to production per quarter. expect to QX guiding year takes the We end of into liquids to XX,XXX volumes continue divested of XX,XXX we the BOE production XXX,XXX the

while total QX the growth, QX production in This forecast production increase annual there have our per looks production broadly we increased at This underlying the day guidance flat X,XXX XXXX the an barrels which midpoint. guidance. taken is to some divestment at liquids offsetting to annual our in midpoint, is update impacts. so has And production outperformance by higher points and

business year. helped impacts strategic to and efforts approach procurement, we to to have this experience our continue drive our our inflationary inflation, the to dampen efficiencies Although to cost workflow

capital we previously stated result, spending within the a continue operate As guidance. to XXXX

and $XXX flow $XXX The oil our set spending control capital prices to is driving free of range previous have cash we profile. We robust of a and realizing combination production $XXX strong million gas cost are million from outperformance, million. at our XXXX

our capital months reduce with of debt cash a over return nine yesterday, announced the reduction almost repurchased through forecast the we And cash approximately buybacks first X.X have outstanding November of compelling increased the of to for for quarter, fourth million almost by the of have we year to This end the are shareholders million our net effective $XXX generated initiatives share flow XX% return our September repurchases dividend and through cost Between bringing million, $XXX as by on-track. XXXX, September. of end For us the Xnd, we and dividends X% XX% flow. of free debt allowed $XX profile of total to our free has And and December share million the shares. payment. our and with in

through assets million, certain we million, of closing prior adjustments. the this remaining Wednesday again our the closed to in Canadian week, of consideration for closing we Moving total a week, assets to announced this to adjustments. announced on sale Earlier of for sale on Canada divestments. previously prior of CADXXX CADXXX And

will to and be over now with assets managing for consideration million I a process current leave operational for adjustments. concluded before and thank to such Canadian of Wade these With an call safe, commitment want in there operations. these turn for staff divestment former transactions, our update. professionalism their and responsible to it I'll total for our CADXXX efficient the

and were per production performance about exceeded our everyone. well by XX,XXX good were per production our base barrels and driven by wells. the during Volumes has an day, just Total morning, day expectations. oil including Ian, These grew in XXX,XXX strong program Thanks, and second robust completions supported quarters further active performance that third quarterly to liquids. of of barrels volumes quarter under equivalent third

quarter. rates of course across with last production occurring program. production locations have eight driven this we the year's the of those completions across North solid third our optimization XX in wells quality quarters, the in Dakota, wells gross five brought High two pads on and Over ongoing

wells well XX on per Our approximately have peak BOE X,XXX per basis. averaged day XXXX day consecutive a

are year's These this. been areas, would We quality, pads well-established above XX% which are this in very we and pleased with they've consider average XX% to exceeding performance. our

these time However, we're these curves and changing performance forward are still assuming performance. program. results encouraging production in they or strong this XXXX are and type driving not But somewhat therefore results our are sustains very early

wells along anticipate of terms in we In some completions quarter, X the activity. for operated online year, the non-operated bringing with activity remaining fourth Dakota in North

forecasting Moving experience costs to the on of XXXX, well primarily program. pressure, we cost our to and inflation, $X.X Previously, in been million completions have in total continued inclusive and Dakota upward system. North first we for drilling in facilities lift capital have

that average will this projection per Our is year. latest we $X.X million well

by XX% followed leading As steel and consumables, expect costs we our then costs higher increase the we with items to look other costs. well anticipated significant and labor into most and another to ahead to other sand see service XXXX, being

solid well. XX of day rates to on peak feet cubic XX%. during brought consecutive performance turning interest quarter Marcellus production which with XX production non-operated position. Lastly, the per over our day Well with working an of million wells We participated XX in continues to per average were be

coming expect in I'll us terms quarter. of We there, for in call the Marcellus growth pass to and gas online quarter natural is fourth production wells leave it the active in fourth position, to projected Jodi. an now drive our which

continues above for sales to the premium significant WTI. barrel oil excess we per quarter. In prices have per Thanks, in capacity our price at strongly Wade. Bakken, start barrel. realized and strengthened Bakken by our oil guidance to XXXX bid and with to crude premium continuing Gulf a WTI, I'll to pricing the is strong prices With of region Coast. Bakken the to U.S. delivered differential realized Bakken $X.XX trade to oil during be we crude $X.XX supported prices the pipeline WTI price premium third the

our from than track corporate a quarter. XXXX our which the the For Marcellus as was costs cooler recently quarter. natural guidance quarter, trend prior partly average. production in are transition per the quarter costs below planned increase closed liquids will Operating an largely higher third anticipate BOE service activity Canadian the of attributable per of and third asset to Mcf operating quarter, our an the operating were costs had $XX.XX quarter, lower weather in price fourth as result $X.XX higher increased the NYMEX NYMEX meet $X.XX divestment, well the per weighting We in fourth to we realized still Mcf in into winter below and we gas, during on

of of As under continue guidance quarter a recorded taxes $X third $XX per environment, XXXX based in the before expect unchanged adjusted left the BOE million funds our result, have we to we cash We X% tax on current price our full of expense . X% current and year commodity tax. to just at flow

million $XXX ended our flow buybacks. continue adjusted return by previously framework of will to the shares or dividends, to and close allocated announced repurchased. the year, of total, net and of debt XX% which quarter of was the $XXX $XXX capital shares expected We in which dividend net flow plans and the week, dividend. capital have million. accelerate third from sale which through X.X additional deleveraging was cash plan continue our part have to a $XXX of for to announced debt net funds XX% includes buying free in remaining was shareholders return share million cash least $XXX our is including under This from With at generated robust free least to million focus We returned We of third The of spending $XXX December Canadian plan our share us Earlier dividends XX% November million we shareholders. position million, adjusted returning and million towards giving capital September returned $XXX free sheet proceeds debt our flow of million. cash early this and this with income back in we over to Our million announced $XX.X the in Bakken. quarter quarter, quarter, assets, support portfolio quarter and on reduced through December. we million $XXX year. the repurchases through balance our remainder current in we to our the In at the January of divestment on flow in flexibility to this strategic XXXX, of plans and

new third the profile at flow entered the winter collars call questions. by over the quarter, costless hedges by costless summer support for added asset. of $XX to it collars during there our into approximately it per $X XXXX Leave natural Marcellus We've strong we the $X.XX cash free Lastly, and $X and and MCF. up operator we'll per approximately turn MCF at to open gas

Greg comes of Pardy RBC question Markets. Instructions] [Operator First Capital from

The on mean questions I operations the had are financial side. mostly look great. the I

or balance substantial the either a given issuer be this of bid the deleveraging, Just the and sheet year? strength which appetite for pace at next the what would later you're year

XXXX. of to We've that mentioned, flow to And kit bid a our to returning would flexibility in we're is actually the normal we opportunities, us we tool shares. gives Thanks, and Yes. Greg. tool a substantial stated It's consider committed issuer Right our cash continue XX% as previously least of course this. Jodi. through the the now, lot buyback at bid issuer free

tool we we So use. it's can won't I comment on timing, but definitely that think potential a

question then the is second technical. And just more

understand year. this I the position cash So tax

FFO In in of of your terms XX% in that of you're take -- give of percentage pretax in a is next we as range maybe cash tax ‘XX? year, XX% an for or still thinking terms still sort

point, as little prices. are that that this shaking as basing at out commodity bit well prices be I'm high I'd might So year this say just on current how a strip

year. think that at use point, X% I for this probably it's you to range pricing next X% strip So if in

Great. for me. And question last

TI You and in-basin -- just the mentioned the $X? differentials to or $X Where in are were quarter. the currently, Bakken they what

-- maybe Clearbrook. that that be might No,

take off for of So you a have bucks couple that to transport.

$X in the right it's basin So now. probably $X I would plus say, $X to

The Jeoffrey Lambujon question next Pickering. ahead. Instructions] of Please from Tudor, comes [Operator go

looking areas morning, terms are of if My at taking solid compare your to but activity in you quarter-to-quarter or prior might front. growth your other particularly my you And apologize productivity seeing program just in I terms talk be delivered you I in about first of how earlier on missed wondering the the components Thanks everyone. bit you the liquids productivity recently call, the how just timing? a might expectations, questions. versus evolve of comparison the active whether was is in in both strong for how all QX been Good on there was one if allocated this If year, how you I have core? can performance to of into next share are there and terms any comments where developing on

This QX Thanks Wade. has Yes. drivers is key been total and Jeoffrey. driver liquids volume the The for performance. question, biggest the performance, for well really recent the

we the in QX performing that brought but and online came perform that throughout wells that we And this strongly QX continued on So quarter, a also into fairly few are quarter strongly. then to highlighted large fractured last wells in second QX. new

biggest that's So the driver.

well. We uptime helped a our quarter volumes that as us base business, really saw in also and in performance good the with

In year, thinking overall into on the then One performance next and two would comment translate components. of be would of mix just how wells. terms that about I'll

these quarter, last noted third quality brought that morning, And the have these and we been our year we average, exceeded pad. on than quarter have online as our noted we second pads even again this higher average expectations. in So wells this

be but to expectations. our exceeded even so And them strong, expected they've we

upcoming or We of to we we forward baking that type did those. optimization going continue into our year's to the are same on not the methods that are on use curves forward program performance, kind

like least wouldn't in So guide we that. we to really opportunity we improve production short-term But that year, do have initial for feel kind we to people continue haven't next performance. baked at of still an to again,

year we of mix important of locations will next more terms diverse in be be bringing it online. year's an we shifting a program, will us, for to that that is In

year, next have pads from we'll several the County So Dunn area.

the program then We Fort will eastern bring on program in of Berthold us may wells that see even and side Williams a core of core County. still our in you have

operations we program. back have more landing in a And the pad come and will but year, spacing, let of So next very our feel we a to to completion than optimization be we strong operates really operate lot producers we like we time bit well can around we've on will production maybe that's still optimize this approach that this how existing terms that paying at tweaks just bring a every and spent the attention it a year and a having teams looking then to diverse us design, every every as impact so else question. the be And well on? someone subservice that got We me of in offset a to customized zone, think particularly positive performance. or well

to detail. fantastic my we as And That's we all providers will for this are asset next in about all relative about budget you a on year expectations for on you basis? year, to next this also Great. Thanks proforma point? volumes dynamic at And found refresh then overall year related how thinking environment pricing moving the just and about success thoughts work that. as on the think on volume given year with follow-up, service side pieces then next how any and year-to-year service impact the that contracts that you as unlocking know given sales, this inflation

Jeff, X% think growth No divestment to change XX.XX how just we're basis. might our liquids, on the do Drew. production to on there it's the an about from the jump growth, but I X% adjusted question. in thinking we about that Hey,

a need year really XXXX reset day off it, BOE expectations. to we this you sold So and call back that then

you to of take capital X% question. growth going on What look talked adjusted to going are was that, X% I'm to capital now. about. it's divestment to similar directionally, So Wade? blanking And very yes, that it’s that, -- number Sorry, Jeoffrey? But more the an we

to with Just any service if work wait the should contracts there's you earnings locking February that? wanted till pricing, new to expect as on color providers year-to-year in if just more next on on year-end to and thoughts we budget see get year,

we the of year. today. certainly Certainly, we're the we'll color, give comment what you seeing start little on more a But can bit

our seeing relative the prepared to XX% a As on bit we we'll driven in on comments. costs costs do a up noted make I'll well couple for And capital of just maybe of XXXX. anticipate component comments, next year, where we order average

since already next services deliver in year's securing of year, those feel well very given and XXXX, The we'll critical actually terms got environment contract that priced that two In positioned. we on the to point. we've the that run we're at next program, rigs we've were like had pricing we

of into secured, bit what XXXX. two the up, adjusted that year's good a essentially way used in inflationary pre-bought And crews. the one and little bit a terms end since drivers of about program those but those, one and very already for the Now prices cost costs next rigs continued just year. Steel labor be company feel ‘XX. one purchase same with benefited was at kind performance key lot we've But on a in we've having good having this current vendor the the it saw of that component use it the quarter-by-quarter up we'll by over have we a XXXX, secured. escalate. will contract next the inflation feel in about been other half two of pretty components, signed used Two those conditions. both also year, of the steel. at pricing. we casing this that likely is Again, XXXX steel contracts frac mode, well we've of we the services to year in of we've like in those reflect conditions. that key reflect to added the our components like been has to is XXXX But We crew we attractive to are we'll given almost well-functioning as year It's then is roll The bigger of

even they we've And X% rollover. We'll moderate baked what we so year will is to we're see that's think we're for and terms a year component that at next just increase of today. then transported and of key in well positioned of because certainly, but -- what of next where all But that in we prices sand of happens steel a And sand, for in in, year feel like we're well. be on sand the we -in-basin got mix steel need sand as secured seeing for side. it'll next on the and

The next National Travis Bank question comes from Wood, Financial.

I'll have two.

back First kind you unit showcased completions into on think results last of the into of terms and improved on back ideally you've should continuing I into over since laying ‘XX But good you a the numbers think terms the a kind as I that basis improvement equation in you're think how kind push technology drilling seeing compression if in big of out then? of advantage are we side, the data year done you pretty why window, of doing spring, And guys you different and of operation a design Bakken through job anything side scale of to lot in completions different and sequentially. you're cost expect and of that to XXXX type of well? drilling five per ‘XX then highlighted

for Travis. the Thanks question, Yes.

approach be In point. terms might relative would continual been that on a Investor I the of Day say, evolution what to from our just it's development, to different

online really position. core noted in we've high in strong to of and addition As year this quality drilling bringing areas our pads

optimize and the have continued pad well to We configuration. development or individual perfect

aren't these own the we're developing our in operators. either taking of some there's islands, the have the a wells existing already look offsetting units So or or most I existing pad these at then wells other the what there. in units do we're unit of that developing because mean by producing is course, wells And that

surface far that the be? calibrated and original unit? each simulation design the with producing How many then are we the And should around of from vary place for the on in for oil optimal in How actually then should those Forks. So and design away into those Three that How they from spaced Bakken, how then fairly and be? based a to wells each sub all conditions. Middle wells account other gas new they of many wells taken we well model put want we've each far

a we of that see we've we like good that back really And done then timing went how optimize design to that. a the just job with continued impacts we flow first so we from how if wells design. and we standard any feel And depletion the also and has would avoiding of more artificial lift the

And so bit we been have is we that to think all contributing seeing. the a performance of that certainly well

We that we some to be we to year's to anticipate beyond, into able as we that will find optimizations. do next continue would continue move and program will

that bigger Basin. think bringing dynamic I is, will wells new of XXXX much online the part across for the beyond and the be we Williston

Our Fort I overtime, have past several in exclusively in Dunn County County. we position. some Berthold in will almost year’s somewhere and And history noted, wells next core will has Williams been as we year, have

those technology say, the the got several I new -- of been terms application, who've last In technology be efficiencies would wrong there for won't years. any have

confident So I'm finding those. we'll keep pretty

management being are costs are able displace are by excited package a the leveraging in a things one able have source operations. pack leverage to our think to where we ESG a got amount of about the battery I of our we have engines, CNG we rigs upgraded diesel fuel we those on fair and actually most as have today we power the

for kind you activity see will that think continue I us. of

that into expand can. more we and of operations more where our We will

be in-basin to technology from the the use this as helpful I potentially and think is logistics going of perspective well. even sand

question over for color. going then that great second That's again. Thanks. Thanks Jodi for here. Okay. probably And

the kind of You with commented NCIB the on SIB. balancing

a we play, kind guys the of come dividends if If of buyback variable given of on language you’re intrinsic of you at there using dividends see or think start expand the into kind and how the to that least side? special 'XX, that value XX%, is stock value in through case

Yes. Thanks, Travis.

open capital continue to given allocation this remain see at to value. time, the as choice between us if or we a for our value and of in returning our stock would other the intrinsic minded discount view point buybacks alternatives open sure, you mechanisms, for or we maybe and using capital less there we as minded buyback the a special to For intrinsic point But where divs today, working, disconnect shares mentioned. best see as such and comes we this with variable keeps as we be

Thank from question you. Please comes The go Jamie of Kubik CIBC. ahead. next

taking year shape in questions drilling we've historically mean or in Yes. around just and the question. to look going continue how to the to exit. Enerplus designs of Are has it Good we expect Maybe the my similar of look affect the the you should of to a morning, there any start thanks and for been seen the volumes to Bakken, quite well just on bit to that I areas the should XXXX are what to shape Thanks. past? versus

there be into is nature of there. two it, January be just similar, and the start bumping February. of a bit we’ll frac or window window the months It'll of will end so and towards little Yes, a This Jamie.

So there be dip. will a

obviously about think know, a little in how the that the little shareholders, Jodi a a And should total we amount on to dividend? but bucket the bit bit, just talk can that maybe you're How more fairly I at return the in small about just bucket. thinking commented Okay. buybacks? component the about of then return you dividend versus that

the growing solid I few the it's A important I of company's think of the profile oil important part business. cap part comments. guess most working these an rock a is stable days. don't dividend

defensible to wanted you times. can commodity in that be can we see volatile You because

see we've attention market to We'll have think that we'll responsive to flows about cash guess these get a we'll and differential really market now, going we where we stock. we as capitalize conditions, right upon powerful really pay again, on. going lot our the we of that, And that. be Overtime, the evolve, to anchoring with I it depend now, on it's think stock. Jody And effect and don't structures and of and any differently. we're will We continuing. said, of might. growth compounding see And valuation ways. we're attention a the can couple so pay mathematics. Obviously, with so Right in And to more about of we if it and the approached dealing opportunity a

think other lots any are behavior people under I our Again, things than see trends we're now. of stock these see now. don't discernible about seems like value thinking it right this lot and we of we being a rewarded right for

continue. attention sitting it's to to use SIBs, clearly, shelf that’s we'll So going this. it to Questions the around the and we if need on use to keep ready

you. are continue. questions further no Please Thank at time. this There

day, reporting Very Thank the weekend. that Thank week. Appreciate you, reporting time everyone busy you. busy everyone. your Bye. today. Hope enjoys

your Ladies the lines. and please participation, your conference disconnect does and this today. that conclude gentlemen, call ask We you for you for thank