BAKKEN OIL DEVELOPMENT

The Sleeping Giant oil project is located within the Williston Basin in Richland County in northeast Montana and produces light, sweet crude oil, associated gas and negligible water from the Middle Bakken formation.

As our single largest producing property, the Sleeping Giant project represents approximately 13% of our production and 9% of our proved plus probable reserves. During 2006 we invested $117 million to drill 41 gross wells (26.5 net) to add 7,800 BOE/day of incremental production at an attractive on-stream cost of $15,000/BOE/day. As part of our 2006 activities, we initiated an increased density drilling program by drilling 6 gross wells (4 net) at 3 wells per section. Based upon results to date, 10 additional increased density wells have been planned for 2007. Continued success may lead to additional increased density wells.

Enerplus has enjoyed tremendous development success since acquiring the property in two separate transactions in the latter part of 2005. To date, we have drilled 56 development wells with a 100% success rate and executed a successful re-fracture program resulting in production growth from 8,700 BOE/day upon acquisition to over 11,500 BOE/day at year-end 2006. These results are far better than we anticipated at the time of the acquisitions.

In 2007, we plan to invest $70 million to drill 26 gross (17 net) oil wells and re-fracture stimulate 12 gross (8 net) wells. This year's development activity will complete the second well per section program in the primary Bakken field area and focus on identifying and proving up new opportunities in the general area. We own 114,000 net acres of undeveloped land in Montana and North Dakota, portions of which we plan to test in 2007. The primary target on the undeveloped lands is the Bakken formation, however the lands are also prospective for the Ratcliffe, Mission Canyon, Birdbear, Duperow and Red River geological formations. Key focus areas for us include:

• expanding the existing primary Bakken field boundaries including drilling a trendline Bakken exploration well on our lands in North Dakota and evaluating/testing the Glacier area northwest of our current primary field area
• proving up additional increased density drilling opportunities
• accelerating our successful re-fracturing program
• exploring the Bakken and other formations in Montana and North Dakota including completing a seismic program over a portion of our Montana lands with the intent to drill Red River exploration wells, and
• evaluating longer term potential which may include improved recovery via potential waterflood or gas injection.