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Energy Summary for Dec. 18, 2014

2014-12-18 19:10 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery lost $2.36 to $54.11 on the New York Merc, while Brent for February lost $1.91 to $59.27 (all figures in this para U.S.). Western Canadian Select traded at a discount of $16 to WTI ($38.11), unchanged. Natural gas for January lost six cents to $3.64. The TSX energy index added 2.63 points to close at 218.67.

Enerplus Corp. (ERF) added 56 cents to $11.56 on 7.93 million shares, after setting a 2015 budget of $635-million (down from $830-million in 2014) and keeping its dividend at nine cents a month. Investors were pleased. At 9.8 per cent of as of yesterday's close, Enerplus's yield is the second highest of all oil companies on the S&P/TSX 60 Index, after Crescent Point Energy Corp. (CPG: $27.06) (with a yield of 10.4 per cent as of yesterday's close). The former top yielder, Penn West Petroleum Ltd. (PWT: $2.61), gave in and slashed its dividend yesterday. Enerplus could have gone the same way. It is no stranger to cutting its dividend because of weak commodity prices. In 2012, it halved the dividend to nine cents from 18 cents, and throughout its history, the dividend has come down from its high of 40 cents. Enerplus says it will cut its current dividend if the downturn persists. For now, it is protected by hedges and a "defensive" 2015 budget. "Defensive" means that the company is hunkering down in Fort Berthold in North Dakota, where it expects to spend $320-million drilling Bakken/Three Forks oil wells. The second-highest spending area, the U.S. Marcellus gas play, will see just $90-million of activity, a nearly 50-per-cent decrease over last year because of low gas prices. The Canadian gas assets in the Alberta Wilrich and Duvernay plays are more or less being ignored. They got 10 per cent of the budget of in 2014, but in 2015, the Wilrich will get just 3 per cent and Duvernay will get next to nothing.

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