Enerplus’ Quarterly Profit Lags Estimates Amid Lower Production

Enerplus’ fourth-quarter earnings missed analysts’ expectations as the Canadian oil and gas producer grappled with a decline in oil prices and lower production.

The company’s 4Q adjusted earnings dropped 33.3% on a year-over-year basis to C$0.10 per share, missing Street estimates of C$0.22 per share.

Enerplus’ (ERF) total production plunged 20% year-over-year to 86,244 barrels of oil equivalent (BOE) per day in the quarter. Lower capital activity both in North Dakota due to the decline in crude oil prices, and in the company’s Marcellus natural gas asset, impacted the production.

Enerplus CEO Ian C. Dundas commented, “Our announced acquisition of Bruin, expected to close in early March 2021, demonstrates our ongoing commitment to value creation for shareholders, enabling us to accelerate free cash flow growth and further support our focus on providing long term sustainable returns.”

For 2021, on the assumption of completion of the Bruin acquisition, announced this January, Enerplus projects production of 103,500 to 108,500 BOE per day, including 63,000 to 67,000 barrels per day of liquids. Capital expenditures are forecasted at $335 million to $385 million. (See Enerplus stock analysis on TipRanks)

On Feb. 5, Desjardins analyst Chris MacCulloch resumed coverage on the stock with a Buy rating and increased the price target to C$6.50 (15.7% upside potential) from C$5, “following the company’s acquisition of Bruin E&P.”

MacCulloch views “the transaction is a natural strategic fit for Enerplus.”

Enerplus shares have exploded almost 83% over the past six months, while the stock still scores a Strong Buy consensus rating based on 9 unanimous Buys. That’s alongside an average analyst price target of C$6.17, which implies upside potential of about 9.7% to current levels.

Enerplus scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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