CALGARY - Enerplus Corp. (TSX:ERF) cited a big non-cash impairment charge on its Canadian natural gas operations Friday for hampering 2011 earnings that included a fourth-quarter loss of almost $300 million.
The Calgary-based oil and gas producer said its net loss in the three months ended Dec. 31 was $299.4 million or $1.66 per share.
That compared with net earnings of $64.5 million or 37 cents per share in the same 2010 period.
The company booked a non-cash charge of $334 million on the declining value of its gas assets in northeastern B.C. and Alberta because of falling prices in the industry.
Enerplus produces natural gas, liquids and light oil in Western Canada and in the Marcellus shale region of the northeastern United States so the company is vulnerable to swings in natural gas prices.
Those prices have dropped over the last year or two in North America — mainly because of an oversupply caused by expanded output from shale deposits in the United States and Canada.
Cash flow from operations rose to $242.2 million from $142 million.
For the full year, Enerplus reported net income of $109.4 million or 61 cents per share on cash flow from operations of $623.4 million, compared with a loss of $179.3 million or $1.02 per share on cash flow from operations of $696.2 million.
"As a result of lower natural gas prices, we recorded a $334 million non-cash impairment on our Canadian natural gas operations in 2011," the company said in a release.
It said cash flow from operating activities were down for the year because stronger oil prices were offset by lower natural gas prices as well as lower average production levels following the sale of U.S. assets in 2010.
It also faced $60 million of taxes related to gains on the dispositions assets in its U.S. subsidiary, Enerplus said.
On the Toronto Stock Exchange, Enerplus shares were down 82 cents at $23.77 in trading near midday Friday.
There are no comments yet