Plus Signs for This Driller


Gordon Pape Image Gordon Pape Editor and Publisher, The Income Investor and the Internet Wealth Builder

If you’re willing to take a little risk for a very healthy dividend, Gordon Pape of The Canada Report recommends this oil and gas producer.

Established in 1986, Enerplus (ERF) is a former income trust. Based in Calgary, it is a diversified oil and gas producer. Average daily production in the third quarter was 81,573 barrels of oil equivalent (boe), almost half of which was oil and natural gas liquids.

Enerplus converted to corporate status with the imposition of the new tax on Canadian trusts at the start of 2011. It now trades as a regular common stock with listings on the Toronto and New York stock exchanges.

There are two good reasons to like Enerplus. The first is yield. At the current payment rate of 9 cents per month, or $1.08 annually (figures in Canadian dollars), the shares yield 8.4%. The second is the company's exposure to some of the most exciting oil plays on the continent.

Enerplus owns Bakken crude oil assets in Fort Berthold, North Dakota. It increased production from this region during the third quarter of 2012 by 10%, to approximately 12,800 boe/day. In November, production increased again to 14,000 boe/day. Enerplus also has holdings in the Sleeping Giant area of the Elm Coulee field in Montana, which it plans to increase in 2013.

The company reported funds flow of just under $135 million in the third quarter of 2012, up 9.5% from the corresponding period in 2011.