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Will Enerplus' Dividend Be Safe in 2013?

Can this oil player keep its capital expenditures and its dividend in balance?

By Joel South and Taylor Muckerman – Dec 13, 2012 at 12:00PM EST

In the video below, Motley Fool energy analysts Taylor Muckerman and Joel South discuss Enerplus (ERF +0.00%). In 2013 the company is looking to cut its capital expenditures by 20%. Instead of going after a lot of natural gas plays like before, Enerplus is focusing 85% of capex on oils and liquids, and 75% of that directly at crude. This is going to give a higher rate of return -- over 25%. It is important for Enerplus to generate growth while keeping its dividend. If everything moves forward with this company, then as it increases its payments on debt its adjusted payout ratio can go down from 190% at year's end to 130% at the end of 2013. Enerplus is definitely moving in the right direction.

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About the Author

Joel is a University of Washington graduate and covers energy and materials for The Motley Fool. Be sure to follow The Motley Fool's energy and materials Twitter for all your energy and materials coverage. Follow @tmfenergy

XMFTheWhisperer

Stocks Mentioned

Devon Energy

NYSE: DVN

$43.53

(-1.08%)-$0.48

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