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Jan 25, 2019

Enerplus lowers capital spend in Canada to 7.5% amid energy crisis

Canada is a terrible operating environment for energy companies: Enerplus CEO

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Enerplus Corp. (ERF.TO) plans to spend just 7.5 per cent of its 2019 capital budget across its Canadian operations in 2019, down from 10 per cent in 2018, the Calgary-based company said Friday.

The remaining 92.5 per cent of its 2019 exploration and development budget of between $565 million to $635 million will be dedicated to the United States, with 80 per cent allocated to its North Dakota Bakken light oil wells.

Its Canadian capital activity will be focused on drilling approximately four net producer wells, along with ongoing polymer injection for existing projects, as well as facilities maintenance, the company said.

Enerplus also provided guidance to produce 94,000 to 100,000 barrels of oil equivalent per day in 2019, including 52,500 to 56,000 barrels per day of liquids.

The decline in Enerplus’ capital expenditure on its home turf comes as Canada’s energy sector struggles with low oil and gas prices, and concerns over regulatory uncertainty.

'It really is a crisis': Enerplus CEO on Canada's oil and gas woes

Ian Dundas, CEO of Enerplus, tells BNN Bloomberg the Canadian energy industry is in crisis and explains why he's happy to have the company primarily south of the border.

“It’s really quite a terrible, terrible operating environment in Canada for companies who are focused in Canada and really don’t have any other opportunities to allocate their capital,” Ian Dundas, president and CEO of Enerplus, said in an interview with BNN Bloomberg’s Greg Bonnell Friday.

Dundas added that the company’s plan to focus investments on North Dakota is not reflective of the current state of Canada’s operating environment. 

“It’s important for people to understand some of that spending is just the nature of what our company looks like today,” he said.

Still, Dundas said he hopes the federal government will address the energy crisis and push for more pipeline capacity.

“It’s been almost a deafening silence when you think about the severity of the crisis upon the nation. It’s not just Alberta, it’s the nation,” Dundas said. “My hope, my belief is that in the fullness of time, infrastructure will get developed, which means pipelines.

“The federal government really will be the linchpin in this.”