(Reuters) - Canadian oil and gas producer Enerplus Corp (ERF.TO) reported a quarterly profit that beat estimates on Friday as the company’s strategy to focus on oil assets paid off.
Shares of the company, which has historically produced more natural gas than oil, were up as much as 4.5 percent.
Enerplus, which has significant operations in the United States, recently entered the Denver-Julesburg Basin in Colorado and has said it expects oil to account for 55 percent of its overall production this year.
Production in the fourth quarter came in at 88,590 barrels of oil equivalent per day (boe/pd), beating the company’s own estimate of 86,000 BOE to 88,000 boe/pd, primarily driven by its oil and gas reserves in Bakken oilfield in North Dakota and the Marcellus gas basin in the Appalachian region.
Enerplus said its recently completed well in the DJ Basin produced 46,920 barrels of oil in 156 days. The company plans to drill up to three wells in the region in 2018.
“Strong results over the past several quarters have been driven by Enerplus’ solid Bakken execution which we expect to continue,” AltaCorp Capital analyst Patrick O’Rourke said.
“The initial DJ Basin result was very intriguing to us, with the potential to add a second core oily play and the additional inventory that investors have been looking for,” he added.
North American energy companies have ramped up production, in tandem with OPEC’s efforts to cut global output, to take advantage of rising prices.
Calgary-based Enerplus stood by its capital expenditure forecast of C$535 to C$585 million in 2018, saying it would spend 75 percent of that amount to develop its North Dakota assets.
Enerplus said the average selling price for crude oil jumped 22.2 percent to C$65.91 in the fourth quarter ended Dec 31. Natural gas prices rose 4.8 percent.
Total average daily production marginally fell to 88,590 boe from 88,960 boe.
Excluding items, Enerplus earned 27 Canadian per share, beating the average analyst estimate of 17 Canadian cents, according to Thomson Reuters I/B/E/S.
Reporting by Akshara P in Bengaluru; Editing by Saumyadeb Chakrabarty