OTHER CONVENTIONAL OIL AND GAS

We also have a diversified portfolio of other conventional opportunities in western Canada. These properties are diversified by commodity (67% natural gas, 33% liquids) and are mixed between operated (46%) and non-operated (54%). Key opportunities include oil developments at Bantry North in southern Alberta and in southeast Saskatchewan while natural gas developments include the Deep Basin and Foothills areas of western Alberta and northeast British Columbia.

Conventional oil and gas represents approximately 51% of our production and 32% of our proved plus probable reserves. In 2006, we invested approximately $175 million in other conventional oil and gas development activities including the drilling of 275 gross wells (53.5 net).

In 2007, we plan to invest $192 million in development activities at other conventional oil and gas properties including drilling approximately 200 gross wells (70 net). Actual capital may vary depending on the activity levels from industry partners on non-operated properties in which we participate.

Enerplus targets the acquisition of properties with future development potential. The Bantry North property is a typical example of how we acquire underdeveloped properties and add significant value through full-scale development. Oil production at Bantry North is from the Sunburst formation and is pressure supported by a natural water drive. The following historical production plot illustrates the incremental production from infill drilling and well/facility optimization activities since Enerplus became operator.

Since acquiring a 100% working interest in the Bantry North oil property as part of the ChevronTexaco acquisition in mid-2004, we have drilled 11 wells and constructed production facilities which added up to 2,000 BOE/day of incremental production over and above natural production declines. The property represents a significant investment opportunity with OOIP of 51 million BOE and only 10.4% recovery to date. In 2006, we spent $8.3 million, drilling 3 more wells in the Sunburst zone along with investment in facilities and optimization activities. We have a similar budget planned for 2007 and expect to drill another 5 wells.

Southeast Saskatchewan

Our crude oil development program in southeast Saskatchewan continued in 2006. Key properties in this region include Tatagwa, Colgate, Heward, Neptune in southeast Saskatchewan and Routledge in Manitoba. Since we began developing this area in 2004, we have taken production from less than 800 BOE/day to approximately 1,800 BOE/day at year-end 2006. Rising crude oil prices and the application of horizontal drilling technology have supported the development work we've done in this area. During 2006, we invested $29.8 million to drill 13 gross wells (11.9 net) and add 1,200 BOE/day of incremental production at an on-stream cost of $24,800/BOE/day. In 2007, we expect to drill 29 gross oil wells (21.9 net) to further develop this region with a budget of $38 million.

Deep Basin/Foothills

Development in the Deep Basin/Foothills typically involves the drilling of high impact, deep (up to 4,500 metres) natural gas wells. Given the expense of these wells, we have pursued a strategy of aligning ourselves with top-tier operators through small working interest positions that mitigate risk and enable us to leverage from external technical expertise. The following historical production plot illustrates how development activities have maintained production levels over natural production declines. During 2006 we invested $34 million in the Deep Basin/Foothills, including the participation in 76 gross wells (6.0 net), to add 1,700 BOE/day of incremental production at an on-stream cost of $20,000/BOE/day. In 2007 we expect to spend $36 million to participate in the drilling of 88 gross gas wells (10 net).

Ownership in a variety of properties offers valuable insights across the industry.