We assess the recoverability of our deferred income tax assets each period to determine whether it is more likely than not all or a portion of our deferred income tax assets will not be realized. We have considered available positive and negative evidence including future taxable income and reversing existing temporary differences in making this assessment. This assessment is primarily the result of projecting future taxable income using total proved and probable forecast average prices and costs. There is risk of a valuation allowance in future periods if commodity prices weaken or other evidence indicates that some of our deferred income tax assets will not be realized. See “Risk Factors and Risk Management – Risk of Impairment of Oil and Gas Properties and Deferred Tax Assets” in the Annual MD&A. A full valuation allowance has been recorded against our deferred income tax assets related to capital items. Our overall net deferred income tax asset is $593.3 million as at March 31, 2021 (December 31, 2020 - $607 million).
LIQUIDITY AND CAPITAL RESOURCES
There are numerous factors that influence how we assess liquidity and leverage, including commodity price cycles, capital spending levels, acquisition and divestment plans, hedging, share repurchases and dividend levels. We also assess our leverage relative to our most restrictive debt covenant under our bank facility, term loan and senior notes, which is a maximum senior debt to earnings before interest, taxes, depreciation, amortization, impairment and other non-cash charges (“adjusted EBITDA”) ratio of 3.5x for a period of up to six months, after which it drops to 3.0x. At March 31, 2021, our senior debt to adjusted EBITDA ratio was 1.8x and our net debt to adjusted funds flow ratio was 2.1x, which does not include the trailing adjusted funds flow associated with the Bruin Acquisition. Although it is not included in our debt covenants, the net debt to adjusted funds flow ratio is often used by investors and analysts to evaluate liquidity. Refer to the definitions and footnotes below.
Total debt net of cash at March 31, 2021 increased to $794.2 million, compared to $376.0 million at December 31, 2020. Total debt was comprised of $983.2 million in senior notes and the term loan less $189.0 million in cash. The increase was due to funding a portion of the Bruin Acquisition using a US$400 million term loan entered into on March 10, 2021. Our next scheduled senior note repayments of US$59.6 million and US$22.0 million are due in May and June 2021, respectively, with remaining maturities extending to 2026. At March 31, 2021, we were undrawn on our bank facility.
Our adjusted payout ratio, which is calculated as cash dividends plus capital, office expenditures and line fill divided by adjusted funds flow, was 57% for the three months ended March 31, 2021, compared to 152% for the same period in 2020.
Subsequent to the quarter, the Board of Directors approved a 10% increase to the dividend to $0.033 per share paid quarterly, from $0.01 per share paid monthly previously. We expect to fund the increase though the incremental free cash flow generated by the business.
Our working capital deficiency, excluding cash and current derivative financial assets and liabilities, decreased to $195.0 million at March 31, 2021 from $257.8 million at December 31, 2020. Our working capital varies due to the timing of the cash realization of our current assets and current liabilities, and the current level of business activity, including our capital spending program, along with commodity price volatility. At March 31, 2021 our accrued revenue receivable increased by $64.2 million as a result of higher commodity prices and production compared to December 31, 2020. We expect to finance our working capital deficit and ongoing working capital requirements through cash, adjusted funds flow and our bank facility. We have sufficient liquidity to meet our financial commitments for the near term.
During the first quarter of 2021, Enerplus acquired all the outstanding equity interests of Bruin for total cash consideration of approximately US$418 million, subject to final purchase price adjustments. Enerplus did not assume any debt of Bruin as a part of the Bruin Acquisition.
A portion of the purchase price of the Bruin Acquisition was funded with a new three-year, senior unsecured US$400 million term loan. The term loan includes financial and other covenants and pricing consistent with Enerplus' bank facility. Following the announcement of the Bruin Acquisition, Enerplus completed a bought deal equity financing, issuing 33.1 million common shares at a price of $4.00 per share for gross proceeds of $132.3 million ($127.2 million, net of issuance costs less tax). A portion of the net proceeds were used to fund the remainder of the Bruin Acquisition.
On April 8, 2021, Enerplus announced that it has entered into an agreement to acquire certain assets from Hess for total consideration of US$312 million, subject to customary purchase price adjustments. The Hess Acquisition closed on April 30, 2021 and was funded using cash and by drawing on our bank facility.
Subsequent to the quarter, we increased and extended our senior, unsecured, covenant-based bank credit facility to US$900 million from US$600 million with a maturity of October 31, 2025. As part of the extension, the company transitioned the facility to a sustainability-linked credit facility incorporating environmental, social and governance (“ESG”)-linked incentive pricing terms which reduce or increase the borrowing costs by up to 5 basis points as Enerplus’ sustainability performance targets (“SPT”) are exceeded or missed. The SPTs are based on the following ESG goals of the company:
