Enerplus Announces Increase in Contingent Resource Estimate, Future Drilling
Inventory and Improved Well Economics at Fort Berthold
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
CALGARY, June 18, 2014 /CNW/ - Enerplus Corporation ("Enerplus") (TSX: ERF)
(NYSE: ERF) is pleased to announce that as a result of our operational
performance and continued technical assessment, including a detailed analysis
of well data within the region, the future outlook of the Fort Berthold Bakken
and Three Forks core area has significantly improved.
Highlights of our assessment include:
-- Increase in Contingent Resource: Our internal best estimate of
economic contingent resources, as independently audited by
McDaniel & Associates Consultants Ltd., has increased by 250%,
from 39 MMBOE at December 31, 2013, to 136 MMBOE at June 1,
2014. This is largely due to a 50% increase in our estimate of
original oil in place which includes contribution from the
Bakken formation and the first bench of the Three Forks
formation across our entire acreage position and the second
bench of the Three Forks formation on a portion of our acreage.
-- Increase in Drilling Inventory: As a result of the revised
contingent resource assessment, our estimate of future drilling
locations has risen by over 125%. We now estimate
approximately 330 future net drilling locations, up from 145
previously, with long horizontal wells representing 60% of
these locations. This assumes an average well density of seven
wells per drilling spacing unit. In addition, Enerplus
continues to see further upside potential through additional
down spacing, higher recovery rates and continued evolution of
our well completions.
-- Improved Economics: The changes in our completion design over
the past 12 months have resulted in a 50% improvement in
capital efficiencies within this play. With the increase in
well productivity, the net present value and internal rates of
return of this play have improved meaningfully.
An in-depth presentation detailing our analysis is available on our website.
In addition, we plan to hold a webcast to provide further details on our
assessment today, June 18(th) at 10:00 AM MST (12:00 PM EST).
To register for the webcast, please click here:
Electronic copies of the presentation, along with other public information,
are available on our website at www.enerplus.com.
Follow @EnerplusCorp on Twitter at https://twitter.com/EnerplusCorp.
INFORMATION REGARDING RESOURCES AND OPERATIONAL INFORMATION
Barrels of Oil Equivalent
This news release also contains references to "BOE" (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.
BOEs 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. "MBOE" and "MMBOE" mean "thousand barrels of oil equivalent" and
"million barrels of oil equivalent", respectively.
Contingent Resource Estimates
This news release contains estimates of "contingent resources". "Contingent
resources" are not, and should not be confused with, oil and gas reserves.
"Contingent resources" are defined in the Canadian Oil and Gas Evaluation
Handbook (the "COGE Handbook") as "those quantities of petroleum estimated, as
of a given date, to be potentially recoverable from known accumulations using
established technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or more
contingencies. Contingencies may include factors such as economics, legal,
environmental, political and regulatory matters or a lack of markets. It is
also appropriate to classify as "contingent resources" the estimated
discovered recoverable quantities associated with a project in the early
evaluation stage. All of our contingent resource estimates are economic using
established technologies and under current commodity price assumptions used by
our independent reserve evaluators. Enerplus expects to develop these
contingent resources in the coming years however it is too early in their
development for these resources to be classified as reserves at this time.
There is no certainty that it will be commercially viable or that we will
produce any portion of the volumes currently classified as "contingent
resources". The "contingent resource" estimates contained herein are presented
as the "best estimate" of the quantity that will actually be recovered,
effective as of June 1, 2014. A "best estimate" of contingent resources means
that it is equally likely that the actual remaining quantities recovered will
be greater or less than the best estimate, and if probabilistic methods are
used, there should be at least a 50% probability that the quantities actually
recovered will equal or exceed the best estimate.
For additional information regarding the primary contingencies which currently
prevent the classification of our disclosed "contingent resources" associated
with our Fort Berthold properties as reserves and the positive and negative
factors relevant to the "contingent resource" estimates, see page 19 of our
Annual Information Form dated February 21, 2014, a copy of which is available
under our SEDAR profile at www.sedar.com, and our Form 40-F, a copy of which
is available under our EDGAR profile at www.sec.gov.
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", "objective", "ongoing", "may", "will", "project",
"should", "believe", "plans", "intends", "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: Enerplus' quantities
of contingent resources and original oil-in-place in the Fort Berthold Bakken
and Three Forks area; future development and drilling locations and the types
of wells to be drilled; and the future value and rates of return on certain
wells drilled in the area.
The forward-looking information contained in this news release reflects
several material factors and expectations and assumptions of Enerplus
including, without limitation: that Enerplus will conduct its operations and
achieve results of operations as anticipated; that Enerplus' development plans
will achieve the expected results; the general continuance of current or,
where applicable, assumed industry conditions; the continuation of assumed
tax, royalty and regulatory regimes; the accuracy of the estimates of
Enerplus' reserve, resource and oil-in-place volumes; ability and willingness
to spend the required capital; and commodity price and cost assumptions.
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
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:
changes in commodity prices; changes in realized prices for Enerplus'
products; changes in the demand for or supply of Enerplus' products;
unanticipated operating results, results from development plans or production
declines; changes in tax or environmental laws, royalty rates or other
regulatory matters; changes in development plans by Enerplus or by third party
operators of Enerplus' properties; reallocation or an inability to finance the
required capital expenditures; inaccurate estimation of Enerplus' oil and gas
reserves, resources and oil-in-place volumes; limited, unfavourable or a lack
of access to capital markets; increased costs; reliance on industry partners;
and certain other risks detailed from time to time in Enerplus' public
disclosure documents (including, without limitation, those risks identified in
our AIF and Form 40-F described above).
Ian C. Dundas
President & Chief Executive Officer
SOURCE Enerplus Corporation
please contact Investor Relations at 1-800-319-6462 or
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