Our increasing complement of technical staff helps unlock value from our assets.

ACQUISITIONS AND DIVESTMENTS

2006 was a year our disciplined approach to acquisitions resulted in limited transactions despite actively pursuing numerous opportunities. As a result, we preserved our balance sheet and avoided the high cost acquisitions within Canada driven by an aggressive energy trust sector. Within the U.S. we tempered our activities as we built our U.S. operating group and executed an expanded internal development program which achieved strong internal production and reserve gains.

Given recent weakness in commodity markets and capital market uncertainty, we see an increasing number of attractive acquisitions at potentially more favourable pricing. This increased opportunity set comes at a time when our equity value is relatively stronger than the general trust sector, our balance sheet is strong and our U.S. execution capability is now in place.

During the year, through a series of small transactions, we increased our interests in core areas, notably at Sleeping Giant in Montana and at Gleneath in Saskatchewan. We acquired minor non-operated interests in a large block of land at Copton within the greater Deep Basin which has significant upside from relatively low risk drilling for deep, sweet natural gas. These properties were acquired at an attractive cost per BOE of $14 and a higher cost on a flowing barrel metric given the significant upside we see within the properties.

In early 2006, we sold a 1% working interest in our Joslyn oil sands lease in exchange for an equity stake in Laricina Energy Ltd. a private oil sands focused company. Given the low selling price of these reserves and the modest number of acquired reserves for the year, the resulting net acquisition metrics appear unattractive. However, the chart below offers more comparable per BOE and per flowing BOE metrics by excluding the Joslyn sale.

2006 Acquisition & Divestment Summary

*   After adjustments for working capital and excluding future development capital
** Excludes sale of reserves of Joslyn for equity stake in Laricina

Acquisition of Gross Overriding Royalty Interests

On January 31, 2007, Enerplus acquired various gross overriding royalty ("GORR") interests in the state of Wyoming for total consideration of US$52 million (CDN$60 million). This acquisition represents a modest addition to our assets in the United States and establishes a new area with significant gas development potential.

The assets produce natural gas from the EnCana Corporation operated Jonah gas field in Wyoming, which is one of the largest gas fields in the U.S. with an estimated original gas in place of 14 trillion cubic feet. We have acquired approximately 540 BOE/day of daily production and approximately 2.2 million BOE of proved reserves and 2.9 million BOE of proved plus probable reserves. This represents a GORR of about 0.5% on approximately 650 producing gas wells. The proved plus probable reserve life index of the assets is 15.9 years, calculated using independent third party engineering reserve estimates and management's estimate of current production. We believe the field has a significant number of additional infill drilling locations that will provide growth potential for the future. Enerplus will not be required to expend any future development capital on the assets. We expect the net operating cash flow per BOE, net of all applicable U.S. taxes, to be significantly higher than that of our existing production due to the nature of the GORR which is not subject to deductions for operating costs and royalties.

Equity Investment Strategy

During the year, we continued to make strategic equity investments in select junior exploration and production and infrastructure companies with experienced management teams. The relationships provide us one or more of the following strategic drivers: insight into attractive developing plays and technologies, advantages on future acquisitions, potential increased future deal flow, and/or enhanced monetization of non-core assets. To date we have enjoyed success in all our prior equity investments as highlighted below:

* Enerplus purchased Ice Energy in a competitive transaction in January 2004

We have other investments including two new international equity investments, a new infrastructure investment and other investments which total approximately $50 million of initial capital. In lieu of spending significant capital to learn whether international opportunities fit our business model, we have chosen to use our equity investment strategy as a first step.

Our equity investment strategy provides us with a number of strategic benefits.