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Focus

We are focused on resource plays that are typically large, aerially extensive accumulations of discovered oil and natural gas. They are characterized by:

• Relatively low geologic risk. The presence of hydrocarbons is known and the challenge is economically and efficiently extracting the reserves versus finding them.

• Potential for large scale development. Resource plays typically cover large geographic areas which require many wells to develop the play over time.

• Attractive long-term declines and RLI. Due to the permeability of the formations, production profiles tend to exhibit rapid declines initially but flatten out resulting in lower, long-term declines.

• Optimization opportunities. Given the large number of wells drilled into these plays, the stage is set for repeatability and improved results as increased knowledge and advancements in technology are applied.

• Predictable results. With a large number of wells generating a relatively predictable profile, the timing, cost, production rates and reserve additions associated with the play can be more accurately anticipated.

• Compatibility with the trust model. Given all the positive attributes noted above, these plays support stable cash flow over the long-term with relatively low risk.

Classic examples of this type of play include shallow gas, Bakken oil, oil sands and coalbed methane. In addition, waterfloods are similar to resource plays in that the oil in place is a relatively known quantity and the challenge is how to best extract the oil and maximize recovery.

Long Life

Enerplus enjoys one of the longest reserve life indices in the sector. This long life offers a number of advantages including:

• Lower base decline . The amount of development capital needed to sustain production at current levels is minimized.

• Supports selective acquisitions . Since we can sustain production with internally generated projects for a period of time, we are positioned to be more selective in our acquisition efforts.

• Reduces impact of commodity price drops . Given that a relatively limited amount of total reserves are produced in a given time period, the effects of a commodity price drop are reduced.

• Encourages patient investment. A longer RLI reduces the urgency and need to invest in an effort to maintain production and allows us to be more selective in our capital program.

Execution Capabilities

The ability to efficiently execute our development strategy is highly dependent upon access to people, services and supplies. Enerplus enjoys a number of advantages that support our execution capabilities:

• Size and purchasing power. We are the 18th largest oil and gas producer and the 11th most active driller in Canada. This provides significant leverage and purchasing power for a wide variety of services and supplies.
• Partner orientation. We have developed relationships with core suppliers in order to access services in the current robust market. As a result of these relationships, we did not suffer delays in executing our capital program in 2005 due to rig availability.
• Strong project management skills. In a recent industry study, Enerplus was highlighted as a 'best in class' shallow gas driller based on a cost-per-metre-drilled analysis. These results were achieved through a number of project management and execution improvements.
• Experienced technical staff. Enerplus recognizes the need for strong technical staff to achieve the desired results. We have an active recruiting program which has increased the number of technical staff within the Fund significantly over the last three years.

• Predictable base declines. Given our large portfolio and the fact that no one property comprises more than 12% of our production, we are able to predict our base decline production levels with a high degree of confidence when planning for the future.
• Valuable insights across the industry. Our diverse property base provides a window into a significant number of oil and gas activities in western Canada and the northern United States. This allows us to identify trends and new plays early and capitalize on these through select acquisition and development opportunities.
• Expanded opportunity set. We own both operated and non-operated properties because it exposes us to a wider range of opportunities. Our operated properties are concentrated in areas where we enjoy a competitive advantage and our non-operated properties are in areas where third party operators enjoy a competitive advantage.
• Balanced commodity mix. Given that natural gas, natural gas liquids and crude oil prices do not always move in unison, we maintain exposure to all commodities.