CALGARY, Jan. 16, 2018 /CNW/ – Enerplus Corporation (“Enerplus” or the “Company”) (TSX & NYSE: ERF) today announced that production for the fourth quarter of 2017 was approximately 88,600 BOE per day, above its fourth quarter guidance range of 86,000 to 88,000 BOE per day, and an increase of 12% from the third quarter of 2017. The Company's crude oil and natural gas liquids production averaged approximately 46,750 barrels per day in the fourth quarter, also above its fourth quarter guidance range of 45,000 to 46,000 barrels per day of crude oil and natural gas liquids, and an increase of 20% from the third quarter of 2017.
The production outperformance in the fourth quarter was driven in part by higher than forecasted North Dakota volumes which averaged approximately 35,500 BOE per day, representing a 70% increase from the first quarter of 2017. Strong unrestricted Marcellus production in November and December in response to improved realized natural gas prices also helped support fourth quarter volumes. Marcellus production averaged approximately 193 MMcf per day in the fourth quarter, which takes into account 35 MMcf per day of price related production curtailments during the month of October.
Further information regarding the fourth quarter 2017 results will be provided on February 23, 2018, when the Company releases its fourth quarter and full-year 2017 results.
Expected Cash Refund and Other Impacts of U.S. Tax Changes
On December 22, 2017, the United States (U.S.) enacted the Tax Cuts and Jobs Act (“Tax Legislation”), significantly revising the U.S. federal income tax law affecting Enerplus' U.S. subsidiary, Enerplus Resources (USA) Corporation. With approximately 80% of Enerplus' current production originating from its U.S. assets, the Company expects that these changes will positively impact its future after-tax earnings, primarily due to the lower federal statutory tax rate (now 21%). The Tax Legislation also repealed the corporate Alternative Minimum Tax (“AMT”) for tax years beginning January 1, 2018, and provides that existing AMT credit carryovers are refundable beginning in 2018. Enerplus expects to realize a refund of approximately US$85 million between 2018 and 2021 related to its current AMT credit carryovers. Furthermore, Enerplus Resources (USA) Corporation does not have any foreign subsidiaries and therefore the one-time repatriation of accumulated foreign earnings under the Tax Legislation does not apply.
The majority of the Tax Legislation changes are effective January 1, 2018; however, the Company is required to recognize the effect of certain changes to its income tax expense in the period the Tax Legislation was enacted. Accordingly, Enerplus currently anticipates the impact of these changes will result in an increase to its income tax expense (reported on its Consolidated Statements of Income/(Loss) and Other Comprehensive Income/(Loss)) of between C$40 to C$60 million, with a corresponding decrease to its deferred income tax asset (reported on its Consolidated Balance Sheets) for the quarter ended December 31, 2017.
The ultimate impact of the Tax Legislation may differ from these estimates, due to, among other things, changes in interpretations or assumptions Enerplus has made or the announcement of any additional regulations or guidance relating to this legislation. Enerplus expects to provide an update regarding the impact of the Tax Legislation when it releases its fourth quarter and full-year 2017 results.
Enerplus Corporation is a responsible developer of high quality crude oil and natural gas assets in Canada and the United States committed to creating value for its shareholders through a disciplined capital investment strategy.