Enerplus Corporation Case Study

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Enerplus Corporation- Continued weakness in the commodity market has hurt the entire oil and gas sector with almost all the companies reporting net loss of late. Not surprisingly, Enerplus Corporation (NYSE: ERF) too had an unforgettable year with shares plummeting approximately 65% during the course. In fact, it shares took further beating in 2016 with year-to-date drop of 23%, due to oil carnage and weak fourth-quarter and full year results for 2015. Let us have a look. The oil & natural gas company for the fourth-quarter reported a net loss of $625 million or losses of $1.63 per share on the revenue of $148.8 million, down significantly from the prior year period. For the full year, its net loss came in at $1.52 billion in 2015 as compared …show more content…

It has revised its dividend to $0.01 per share, which will be effective from the first-quarter of 2016. This cut in its dividend will allow the company to save approximately $95 million in 2016 from its dividend level in 2015, eventually improving its liquidity position. Improving debt profile through sale of non-core assets ERF’s capital efficiency initiatives have been directed towards competitive assets and removal of non-core assets. And, as part of these initiatives the company has divested its non-core assets during this disorder in oil & gas price disorder to further strengthen its balance sheet. For instance, the oil & gas company divested approximately $286.6 million of its non-core assets across the United States and Canada. This includes sale of its Pembina waterflood assets in Canada and non-operated North Dakota properties in the U.S. The company plans to use these proceeds from the sale of non-core assets to pay its outstanding debt of $1.2 billion, which has slightly increased over $1.13 billion in 2014. In fact, Enerplus during the fourth-quarter repaid $103.2 million of its senior notes and thereby increased the amount drawn on its bank facility to $800 million that should support its liquidity in

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