Our long reserve life index continues to be one of our key competitive advantages.

OUR STRATEGY

At Enerplus, we are focused on being a top-tier oil and gas producer. To achieve this, we have built a technically driven organization marked by highly qualified staff, strategic long-life assets, consistent execution and delivery of key operating results, a robust set of future opportunities and clear competitive advantages. These efforts will serve us well regardless of our organizational structure.

This focus delivered strong results in 2006:

• Annual average daily production and exit rate volumes in line with our forecast
• Production growth from internal development
• Record capital development with attractive efficiencies of under $23,000/BOE/day
• Positive reserve additions from our U.S. assets contributed to replacing 82% of our production without the benefit of any significant acquisitions
• One-year proved plus probable FD&A costs of $23.19/BOE reflecting inflationary pressures on our development program. Our three-year FD&A costs are $14.90/BOE ($11.51/BOE excluding future development capital)
• A significant increase in our future opportunity set to $2 billion in attractive conventional capital projects and $1 billion in oil sands projects excluding any upgrading options

Within the oil and gas industry, we compete for people, land, services, supplies, and new ideas. To operate successfully, we have developed the following competitive advantages:

• Resource-play focus. Approximately 50% of our conventional asset base consists of resource plays which are marked by relatively predictable decline rates with low geologic risk. They offer significant development potential with improving economics as a result of technology and experience.
• Long life, low decline reserves. Our proved plus probable reserve life index of 14 years is one of the longest in the sector. That translates into lower base declines and allows us to be selective with our capital investments and acquisitions.
• Diverse assets. Exposure to a variety of oil and gas assets reduces the risk associated with any one property and provides valuable insights across the industry, allowing us to capitalize on other new opportunities. Our balanced commodity mix also provides exposure to both crude oil and natural gas, reducing our risk to lower prices in any one commodity.
• Size and execution capabilities. Our size gives us the capability to execute large programs while leveraging our purchasing power. Establishing partner-oriented relationships with our suppliers helps ensure efficient execution of our activities.
• Robust future opportunity set. Our five-year inventory of conventional projects and the diversity of these projects positions us to maintain and grow production without relying on acquisitions. It also provides flexibility to manage through varying commodity price cycles.
• Our team. Enerplus has a strong team with demonstrated effectiveness on operations, conventional development and M&A. In 2006 we built a U.S. team that delivered superior results on the acquisitions from 2005 and an oil sands team that includes personnel with experience on most major oil sands projects in Alberta.