December 17, 2010 / 11:41 AM / 8 years ago

UPDATE 2-Enerplus sees production rise up to 15 pct in 2 yrs

* Expects 2011 capital spending to be up 25 pct

* To spend 85 pct on Bakken, Waterflood, Marcellus plays * Not to sell producing non-core properties in 2011

* Says cash flow likely to grow 15 pct by 2012 (Adds details)

Dec 17 (Reuters) - Canada’s Enerplus Resources Fund ERF_u.TO said it expects production to grow 10-15 percent over the next two years, driven by the development of its Bakken light oil and the Marcellus gas plays. In 2011, annual production is expected to average 78,000- 80,000 barrels of oil equivalent per day (boed), which is likely to go up to 80,000-84,000 boed by year end, the company said in a statement.

The No. 4 Canadian oil and gas trust had forecast fiscal 2010 production to average 83,000-84,000 boed.

Enerplus has been developing its unconventional oil and gas holdings, including the massive Marcellus shales of Pennsylvania and the Bakken oil region in Saskatchewan, Montana and North Dakota.

Enerplus, which does not have any specific plans to “package and sell any significant producing non-core properties” in the next fiscal, said 2011 capital spending is likely to be up 25 percent at C$650 million.

The company, with a market value of about C$5.12 billion, expects to spend about 85 percent of that on Bakken, Waterflood and Marcellus resource plays.

Most of the Bakken activity will be focused at Fort Berthold, North Dakota, where the company holds over 70,000 net acres of undeveloped land.

“Natural gas volumes are expected to remain essentially flat throughout the year. However, we anticipate shallow gas production will decline and be replaced by more profitable natural gas from the Marcellus,” the company said.

Enerplus expects crude oil volumes to rise more than 20 percent over the next two years.

“Up to 40 percent of the production associated with our 2011 drilling program will not come on stream until the remaining completion and tie-in capital is expended in 2012,” the company said.

Cash flow, an indicator of the company’s ability to fund growth plans, is likely to grow by about 15 percent by 2012 partly due to higher production and crude oil prices.

The trust’s units closed at C$28.51 on Thursday on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Jarshad Kakkrakandy, Unnikrishnan Nair)

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