ENERPLUS CORP. $13.64 (Toronto symbol ERF; Shares outstanding: 198.2 million; Market cap: $2.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 7.9%) produces an average of 85,490 barrels of oil equivalent per day (weighted 51% to gas and 49% to oil). Its properties are mainly in Alberta, Saskatchewan, B.C., North Dakota and Montana, as well as the Marcellus Shale, which passes through Pennsylvania, New York, Ohio and West Virginia.
In the three months ended December 31, 2012, Enerplus’s cash flow per share rose 16.1%, to $1.01 from $0.87 a year earlier. Gas prices fell 11.7%, but that was offset by a 10.7% production increase and lower operating costs.
The company’s shares now yield a very high 7.9%. Enerplus plans to cut its 2013 exploration and development budget by 19.7%, to $685 million from $853 million in 2012. The reduction will slow the company’s production growth, but it will help it maintain its high dividend.
Enerplus’s debt is $1.0 billion, or a manageable 37.0% of its market cap. The stock trades at 4.3 times its 2013 cash flow of $3.15 a share.
Enerplus is still a buy.
