Enerplus Corporation First Quarter 2023 Results

FIRST QUARTER SUMMARY

Production in the first quarter of 2023 was 97,652 BOE per day, an increase of 6% compared to the same period a year ago, and 9% lower than the prior quarter. Crude oil and natural gas liquids production in the first quarter of 2023 was 56,734 barrels per day, in line with the same period a year ago, and 13% lower than the prior quarter. The higher production compared to the same period in 2022 was driven by the Company's 2022 development plan and strong well performance in North Dakota and the Marcellus. The lower production compared to the prior quarter was due to the planned sequencing of the Company's completions program in North Dakota with no operated wells brought online between mid-October 2022 and mid-February 2023. The sale of substantially all of Enerplus' Canadian assets in the fourth quarter of 2022 with associated production of 6,400 BOE per day (78% liquids) also contributed to the lower production in the first quarter of 2023 compared to the prior quarter.

Enerplus reported first quarter 2023 net income of $137.5 million, or $0.63 per share (basic), compared to net income of $33.2 million, or $0.14 per share (basic), in the same period in 2022. Excluding certain non-cash or non-recurring items, adjusted net income⁽¹⁾ for the first quarter of 2023 was $140.7 million, or $0.65 per share (basic), compared to $145.8 million, or $0.60 per share (basic), during the same period in 2022. First quarter 2023 net income was higher than the prior year period primarily due to a gain in commodity derivative instruments compared to a commodity derivative instrument loss in the prior year quarter.

Enerplus' first quarter 2023 realized Bakken oil price differential was $0.06 per barrel above WTI, compared to $0.35 per barrel below WTI in the first quarter of 2022. Enerplus is revising its 2023 Bakken crude oil price differential guidance to $0.50 per barrel above WTI, from $0.75 per barrel above WTI previously, reflecting the slightly weaker than expected pricing in the first quarter.

The Company's realized Marcellus natural gas price differential was $0.64 per Mcf below NYMEX during the first quarter of 2023, compared to $0.01 per Mcf above NYMEX in the first quarter of 2022. Enerplus expects its Marcellus differential to remain supported during spring and into summer due to a flat outlook on natural gas supply growth and weaker NYMEX pricing. As a result, Enerplus is maintaining its annual Marcellus differential guidance of $0.75 per Mcf below NYMEX.

Operating expenses were $10.56 per BOE in the first quarter of 2023, compared to $10.03 per BOE during the first quarter of 2022. The increase in per unit operating expenses compared to the prior year period was due to inflation adjusted contract pricing, increased gas processing volumes due to improved capture rates, and higher planned well service activity.

Current tax expense was $11.0 million in the first quarter.

Capital spending totaled $138.6 million in the first quarter of 2023. The Company paid $12.0 million in dividends in the quarter and repurchased approximately 3.5 million shares at an average price of $15.37 per share, for total consideration of $54.6 million. Subsequent to March 31, 2023, and up to and including May 3, 2023, Enerplus repurchased 1.1 million shares at an average price of $14.81 per share, for total consideration of $16.0 million.

Enerplus ended the first quarter of 2023 with total debt of $203.2 million and cash of $52.6 million. Enerplus was undrawn on its $1.3 billion credit facilities.

OPERATIONS

North Dakota production averaged 66,656 BOE per day during the first quarter of 2023, an increase of 16% compared to the same period a year ago. North Dakota production was 8% lower than the prior quarter due to the planned sequencing of the Company's completions program. During the first quarter, Enerplus drilled 14 gross operated wells (86% average working interest) and brought four gross operated wells (75% working interest) on production in North Dakota. In the second quarter, Enerplus expects to bring approximately 19 - 22 net operated wells on production in North Dakota, including 3 - 5 net refracs. The Company is continuing to operate two drilling rigs throughout 2023.

Marcellus production averaged 180 MMcf per day during the first quarter of 2023, approximately 11% higher than the same period in 2022 and approximately flat to the prior quarter.

RETURN OF CAPITAL TO SHAREHOLDERS

Enerplus remains committed to returning at least 60% of free cash flow generated in 2023 to shareholders through dividends and share repurchases. Based on current market conditions, the Company expects to continue to prioritize share repurchases for the majority of its return of capital plan and intends to complete share repurchases under its remaining normal course issuer bid ("NCIB") by the end of July 2023. Enerplus expects to renew its NCIB in August 2023 for another 10% of the public float (within the meaning under the TSX rules).

As at May 3, 2023, Enerplus had 3.3 million shares remaining under its NCIB.

Enerplus announced a quarterly cash dividend of $0.055 per share payable on June 15, 2023 to shareholders of record on May 31, 2023.

2023 UPDATED GUIDANCE

Enerplus' current 2023 guidance is summarized below. The Company has updated guidance for its Bakken oil price differential to $0.50 per barrel above WTI (from $0.75 per barrel above WTI), production tax of 7% to 8% (from 7%), and transportation expense to $4.20 per BOE (from $4.35 per BOE). All other guidance remains unchanged.