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Enerplus Sells Non-Core Liquids Assets, Raises Production Guidance

Despite an agreement to sell some of its non-core liquids assets, Enerplus Corp. increased its 2013 estimates for annual average and exit production, thanks to a "strong performance" from its core assets in the Bakken and Marcellus shales.

The Calgary-based independent said Tuesday that production averaged 88,300 boe/d for the first three quarters of 2013, a figure above the company's full-year forecast of 85,000 boe/d. Production during 3Q2013 averaged 87,700 boe/d, with 48% weighted to crude oil and natural gas liquids (NGL).

Enerplus said 3Q2013 production was "down slightly from the second quarter but in line with expectations due to planned turnaround activity, lower capital spending earlier in the year and the sale of 1,300 boe/d of non-core production. We continue to see strong performance from our core areas in both Canada and the U.S. with our Bakken and Marcellus assets delivering ahead of expectations.”

According to Enerplus, production from the Fort Berthold region averaged 18,000 boe/d during the third quarter, a 19% increase from 2Q2013, which achieved the company's forecast exit rate for 2013 ahead of schedule.

"Production from the Marcellus region also continues to surpass our expectations," Enerplus said, adding that production there averaged more than 88 MMcf/d during 3Q2013, compared to the company's previous exit forecast of 75 MMcf/d. "Given this strong performance, we now expect daily production will average approximately 87,500 boe/d during 2013."

Enerplus said it has signed an agreement to sell 900 boe/d of non-core liquids production to an undisclosed buyer for approximately C$105 million, before customary conditions and adjustments. The company said the revised guidance assumes the closing of the sale during 4Q2013.

"Despite the announced divestments, we are also increasing our exit production forecast to 88,000 boe/d, which is the high end of our original guidance range," Enerplus said. "Crude oil and liquids are still expected to represent approximately 48% of the total production forecast.

"We remain on track with our original capital guidance of $685 million as well as operating and general and administrative cost guidance."

Enerplus said that based upon the updated forecast, the company expects to deliver total annual average production growth of approximately 7% in 2013, or 4% production growth per share.

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