Enerplus Corp (NYSE:ERF) Q1 2022 Earnings Conference Call May 6, 2022 11:00 AM ET

Company Participants

Drew Mair - Manager, Investor Relations

Ian Dundas - President & CEO

Wade Hutchings - SVP & COO

Jodi Jenson Labrie - SVP & Chief Financial Officer

Conference Call Participants

Patrick O'Rourke - ATB Capital Markets

Eric Nuttall - Ninepoint Partners

Operator

Good morning, ladies and gentlemen, and welcome to the Enerplus Q1 2022 results conference call. At this time, all lines are in a listen-only mode. [Operator Instructions] This call is being recorded on May 6, 2022. I would now like to turn the conference over to Mr. Drew Mair, manager of investor relations. Please go ahead.

Drew Mair

Thank you, operator, and good morning, everyone. Thank you for joining the call. Before we get started, please take note that the advisory is located at the end of our first quarter news release. Our financials have been prepared in accordance with U.S.

GAAP. Our production volumes are reported on a net after deduction of royalty basis, and our financial figures are in U.S. dollars unless otherwise specified. I'm here this morning with Ian Dundas, our president and chief executive officer; Wade Hutchings, senior VP and chief operating officer; Jodi Jenson Labrie, senior VP and chief financial officer; Shaina Morihira, VP finance; and Garth Doll, VP marketing.

Following our discussion, we will open up the call for questions. With that, I'll turn it over to Ian.

Ian Dundas

Thank you, Drew. Good morning and thank you for joining us today. I'll start with the key takeaways from our first quarter release. We remain well positioned relative to our 2022 plan to deliver robust free cash flow growth and meaningful cash returns to shareholders. We expect to generate approximately $675 million in annual free cash flow in 2022, assuming rest-of-year prices of $85 West Texas and $5 NYMEX. Based on current strip prices, our free cash flow estimate increases to approximately $900 million. Consistent with our multi-year track record, we plan to allocate a substantial portion of free cash flow to shareholder returns. We have committed to returning a minimum of $350 million or 50% of annual 2022 free cash flow, whichever is greater through dividends and share repurchases.

In connection with this plan, our board has approved a 30% increase to our quarterly dividend, effective with the June payment, and an increase to our share repurchase program. Based on current market conditions, we expect to repurchase the remaining authorization under our normal course issuer bid by the end of July and renew the NCIB in August for another 10% of shares outstanding. Our framework for share repurchases continues to be based on our evaluation of the company's intrinsic value, using our midcycle price view compared to our trading value. Using this approach, we continue to see compelling value in our business, which we believe is not being reflected in the market value of our equity.