|
Enerplus has a 25 year history as an independent oil and gas producer operating under the income fund structure. We believe there has been and will continue to be strong investor demand for income-generating investments and our portfolio of mature oil and gas properties meets this need. However, in order to be competitive, we must also offer a component of growth to our investors. We have begun adding early-stage growth assets into our portfolio which we expect will help improve our operating metrics and add future production and reserves. By offering a combination of growth and income to investors, we expect to provide a compelling investment opportunity within the oil and gas industry.
As a result of the Canadian federal government’s tax on trusts, we anticipate converting to a dividend paying corporation effective January 1, 2011. While our cash flows and the amount we distribute to investors will vary depending on commodity prices, production volumes, capital requirements and costs, we do not expect to adjust our monthly cash distributions as a result of our conversion to a corporation. We currently have approximately $3 billion in tax pools that can be used to provide shelter from cash taxes in Canada for three to five years beyond 2010 (depending on any acquisition and divestment activity) and expect to be taxable at an estimated rate of 10-15% following this period.
Subject to the approval of our corporate conversion plan by the Board of Directors, we expect to proceed with a Special Meeting of Unitholders in December of this year and ultimately convert to a corporation on or about January 1, 2011.
The information contained on this page as well as the links to "FAQs", "Tax Implications to Unitholders" and "Tax Pools" below contain forward-looking statements and forward-looking information within the meaning of applicable securities laws ("forward-looking information"). The use of any of the words "expect", "anticipate", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "strategy" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this page and the associated links contain forward-looking information pertaining to Enerplus' strategy, future growth and future operating results; the timing and tax treatment of Enerplus' conversion from an income trust to a corporation and the amount and tax treatment of dividends that may be paid by Enerplus thereafter; the amount, categorization and income shelter provided by Enerplus' tax pools; and future returns to our securityholders; and Enerplus' capital and debt capacity and strategy.
The forward-looking information contained in this page and the associated links reflects several material factors and expectations and assumptions of the Fund including, without limitation, the continuance of existing income tax laws; certain commodity price and other cost assumptions; the continued availability of adequate debt and/or equity financing and cash flow to fund its capital and operating requirements as needed; and the extent of its liabilities. The Fund believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking information included in this page and the associated links are not guarantees of future performance and should not be unduly relied upon. Such information and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: changes in tax laws; changes in operating results or industry conditions; and certain other risks detailed from time to time in the Fund's public disclosure documents (including, without limitation, those risks identified in the Fund's Annual Information Form for the year ended December 31, 2009 (and corresponding Form 40-F) dated March 12, 2010, a copy of which is available on our SEDAR profile at www.sedar.com and a copy of the Form 40-F is available on EDGAR at www.sec.gov.
The information contained in certain links to this webpage also includes references to and estimates of "contingent resources". For information on presentation of contingent resources, see the Fund's Annual Information Form and Form 40-F as described above. Such information also contains references to "BOE" (barrels of oil equivalent). Enerplus has adopted the standard of six thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl) when converting natural gas to BOEs. BOEs may be misleading, particularly if used in isolation. The foregoing conversion ratios are based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead.
|
