Enerplus Corporation (NYSE:ERF) Q4 2019 Earnings Conference Call - Final Transcript

Feb 21, 2020 • 11:00 am ET


Enerplus Corporation (NYSE:ERF) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and welcome to the Enerplus Q4 And Year-End 2019 Results Conference Call. At this time, all lines are in a listen-only mode. [Operator Instructions] This call is being recorded on Friday, February 21, 2020.

I'd now like to turn the conference over to Mr. Drew Mair. Please go ahead.

Drew Mair

Thank you, operator, and good morning, everyone. Thanks for joining the call. Before we get started, please take note of the advisories located at the end of today's news release our financials have been prepared in accordance with U.S. GAAP, all discussion of production volumes today are on a gross company working interest basis and all financial figures are in Canadian dollars unless otherwise specified.

I'm here this morning with Ian Dundas, our President and Chief Executive Officer; Jodi Jenson Labrie, Senior VP and Chief Financial Officer; Ray Daniels, Senior VP-Operations; Wade Hutchins, Senior VP and Chief Operating Officer; Shaina Morihira; VP, Finance; and Garth Doll, VP Marketing.

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

Ian C. Dundas

Thank you, Drew. Good morning, everyone. I'll run through our 2019 results released this morning, before moving on to our plans for 2020. The details of which, we announced in January. We had strong results across the company in 2019, which we believe demonstrate our continued track record of creating value for our shareholders.

Two of the central pillars of our strategy has been returns focused capital allocation and a conservative financial plan. The outcome of this has been an operational plan that has generated free cash flow and attractive liquids growth. We believe that our full year results screen very well relative to the strategy. We delivered 9% liquids production growth, 15% on a per share basis. We maintain capital spending discipline and generated free cash flow of $90 million and we returned over $200 million to shareholders through share repurchases and/or dividend.

This morning, we also released our 2019 year-end reserves. We replaced 139% of our 2019 production on a 2P basis at a competitive finding and development cost of approximately $13 per BOE. At an asset level, we replaced over 200% of North Dakota production. Overall, we grew our 2P reserves by 3%, which improved to 11% on a per share basis. And it's worth noting we booked less than half of our over 400 remaining identified locations in North Dakota. Inclusive of these locations, this translates into just under 10 years of drilling inventory at the current pace of development, which also doesn't include any benefit from our DJ Basin position.

In summary, 2019 was another year of differentiated execution for Enerplus. And I'd like to take a moment to thank our team for delivering these solid results. Turning to 2020, the plan looks similar to 2019 on many levels. We expect to provide high returning oil production growth under a capital-efficient operating plan. Free cash flow at oil prices above $50 per barrel WTI. Continued