ENERPLUS CORP. $15.55 - Toronto symbol ERF

ENERPLUS CORP. $15.55 (Toronto symbol ERF; Shares outstanding: 199.7 million; Market cap: $3.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 7.0%) produces an average of 87,183 barrels of oil equivalent per day (52% gas and 48% oil).

The company’s 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 March 31, 2013 Enerplus’s cash flow per share rose 1.2%, to $0.87 from $0.86 a year earlier. Oil prices fell 8.6%, but that was offset by a 10.1% overall production increase and 36.5% higher gas prices.

Enerplus has cut its 2013 exploration and development budget by 19.7%, to $685 million from $853 million in 2012. This was expected to slow the company’s production growth, but drilling success at Marcellus has instead pushed output higher. Production at Marcellus jumped to 79 million cubic feet per day in the latest quarter, up 38.6% from 57 million cubic feet in the fourth quarter of 2012.

The company’s debt is $1.1 billion, or a manageable 35.5% of its market cap. The stock trades at 4.2 times Enerplus’s 2013 cash flow of $3.70 a share.

Enerplus is still a buy.

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