* Slashes capital spending for next year by 20 pct
* Cuts 2012 average production forecast by 2 pct to 82,000
* Q3 loss/shr C$0.32 vs year ago EPS of C$0.62
* Shares fall as much as 15 pct
Nov 9 Enerplus Corp reported a
third-quarter loss as it wrote down the value of certain
exploration assets, and the Canadian oil and gas producer warned
of slower growth next year after it cut its 2013 capital
spending by about 20 percent.
Shares of the company, which targets a 2012 capital spending
of C$850 million, fell as much as 15 percent to C$12.76 on the
Toronto Stock Exchange.
"We recorded impairments of approximately C$114 million,
C$66 million of which relates to Marcellus operated leases in
West Virginia and Maryland that are expected to expire over the
next 12 months as we don't anticipate renewing them," Chief
Executive Gordon Kerr said on a conference call with analysts.
The sale of its 1,600-barrels-per-day Manitoba assets in
central Canada will also reduce growth expectations for 2013,
said the company, which also owns assets in the Bakken in North
Dakota and in the Marcellus shale in Pennsylvania.
"I am having a hard time seeing how they can cut capex by 20
percent and also have growth next year ... They have a tough job
in front of them," said analyst Dirk Lever of Altacorp Capital.
"They are trying to do the right thing by selling off
non-core assets but of the four core areas, one is holding flat,
one is declining, one is having trouble because of commodity
prices and their partners aren't putting up money. The only
thing that is going for them is the Bakken right now," Lever
Shares of the company, which had a market value of C$3.02
billion as of Thursday close, were down 14 percent at C$12.95 in
afternoon trading. The stock was one of the top percentage
losers on the exchange.
Enerplus also cut its average production forecast for 2012
by 2 percent to 82,000 barrels of oil equivalent per day.
With weak natural gas prices in 2012 and the ongoing
infrastructure challenges, drilling and tie-in activity has been
slower than expected, the company said.
Decade-low natural gas prices have forced companies such as
Chesapeake Energy Corp and Encana Corp trim
spending on dry-gas and focus on oil and natural gas liquids.
Natural gas prices fell 29 percent to average $2.85
per million British thermal unit in the July-September quarter
from a year earlier.
"We continue to expect a slower pace of wells on-stream
through the remainder of the year," the company said.
Operating costs for the current year are now expected to
average C$10.70 per barrel of oil equivalent, up from its prior
view of C$10.40.
Net loss in the third quarter was C$63.5 million ($63.6
million), or 32 Canadian cents per share, compared with a net
income of C$111.3 million, or 62 Canadian cents per share, a
Daily production in the quarter averaged 81,573 barrels of
oil equivalent per day, up 11 percent from a year earlier.
The company said natural gas volumes declined due to a lack
of capital investment in its Canadian gas assets.