Enerplus: Monthly Dividends And Growth Potential From High-Quality Oil And Gas Assets

As an oil and gas producer, Enerplus Corporation (ERF) suffered from the downturn in commodity prices from 2014-2016.

On the plus side, it is up 33% in the past one year, thanks to a recovery in oil and gas prices.

Enerplus benefits from a strong asset base, which fuels its steady monthly dividends.

The stock has a 1.1% dividend yield, which is roughly half the average dividend yield of the S&P 500 Index.

One advantage for Enerplus is that it pays its dividend each month, rather than on a quarterly or semi-annual basis. Monthly dividends give investors the ability to compound dividends even faster.

Enerplus is one of just 21 stocks that pay monthly dividends.

This article will discuss Enerplus’ business model, and whether it is an attractive option for income investors.

Business Overview

Enerplus was established in 1986. It is a producer of crude oil and natural gas assets in Canada and the U.S. It is a small-cap stock, with a market capitalization of $1.9 billion.

Enerplus has high-quality assets, with operations in some of the premier oil and gas fields in North America, such as the Bakken/Three Forks resource play in North Dakota.

Another major area of production is the Williston Basin, where Enerplus produced 32,888 barrels of oil equivalents per day.

ERP Williston


Source: May 2017 Investor Presentation, page 10

Its natural gas assets are primarily located in the high-quality Marcellus shale, one of the most economically-sound natural gas fields in North America.

The company has a fairly balanced production mix. Approximately 52% of estimated 2017 production will be from natural gas, with 48% from oil and gas liquids.

Roughly three-quarters of Enerplus’ production is from the U.S., with the remaining 25% from Canada.

Total production fell by 12% in 2016, to 93,000 barrels per day. The decline was entirely due to divestments. Last year, Enerplus divested assets with crude oil and natural gas production of approximately 13,500 barrels per day.

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