Enerplus Corporation

Reported Q3 adjusted funds flow was $264 million and free cash flow was $142 million, with capital spending of $121 million. North Dakota production was just under 78,000 BOE/d, up 13% sequentially, and liquids production was up 14% sequentially. Operating expenses were $10.17 per BOE in the quarter. Full-year 2023 guidance was raised for total production by 2,000 BOE/d and liquids production by 1,000 bbl/d at the midpoint; Q4 liquids production guidance is 60,500 to 64,500 bbl/d. Capital spending guidance was narrowed to $520 million to $540 million, and operating expense guidance was revised to $10.75 to $11.00 per BOE. Management said it expects to return approximately $300 million of 2023 cash flow, with about $100 million estimated in Q4 including the dividend, and about 70% of 2024 free cash flow through share purchases and dividends.

Ian Dundas emphasized that Enerplus is outperforming its plan through strong Bakken well productivity, which is lifting both production and free cash flow. He said the company is comfortable leaning into buybacks because it believes the stock trades below intrinsic value, while still expecting the dividend to rise gradually over time as share count declines. His tone was confident and constructive, framing the quarter as evidence that the company is executing ahead of its multi-year plan.

Jodi Jenson Labrie highlighted that Bakken realized oil differentials were $0.20 per barrel above WTI in Q3, though the company now expects full-year 2023 Bakken differentials of $0.25 per barrel below WTI and Marcellus gas differentials of $0.85 per Mcf below NYMEX. She said Q3 operating expenses were $10.17 per BOE and full-year OpEx guidance was tightened to $10.75 to $11.00 per BOE from $10.75 to $11.50 per BOE. She also pointed to $264 million of adjusted funds flow, $121 million of capital spending, and $142 million of free cash flow, saying Q4 should be another strong free-cash-flow period as capex tapers.

Analysts focused on next year’s drilling plan, the potential for about 5% lower well costs, and how the company is thinking about dividend growth versus buybacks. Management said 2024 activity should look broadly similar to this year, balanced between Fort Berthold and Little Knife, and noted that key inputs like rigs, pressure pumping, and sand are already secured, while OCTG and diesel remain the main swing factors. On capital returns, management reiterated that buybacks are currently the most attractive lever because the stock appears undervalued, while the dividend should grow in the normal course as the share count comes down.