Enerplus’ portfolio of assets offer considerable low-risk development potential which help us to replace our annual decline and maintain our production volumes. 

Enerplus develops our properties through lower risk development projects which include infill drilling, step-out drilling, joint venture arrangements, farmouts, waterflood implementation and other activities. Our development investments currently focus on crude oil waterfloods, shallow natural gas, deep tight natural gas, coalbed methane and bitumen in western Canada and Bakken oil development in Montana and North Dakota. We also invest in the development of other conventional oil and gas properties in Canada.

On higher risk opportunities, Enerplus generally enters into farmout arrangements under which an exploration-oriented company would pursue the opportunities on Enerplus’ behalf, generally at no cost to Enerplus, in exchange for a portion of Enerplus’ interests. Enerplus may pursue some higher risk opportunities on its own if the risk/return aspects justify the risk to Enerplus. Enerplus typically looks for projects of sufficient size which, if proven, could materially add to the value of the Fund going forward.

We typically experience approximately 99% drilling success by avoiding certain higher risk exploration type drilling. Enerplus also tends to take smaller working interests in higher risk play types to limit exposure in any one well without sacrificing the ability to participate in attractive areas such as the Deep Basin or the Foothills areas of Alberta. Generally we allocate approximately 15% to 20% of our annual capital expenditures to longer-term opportunities in oil sands, land, seismic and higher risk drilling activities.

Our development capital program for the first quarter 2008, was one of the most active in our history with total spending of approximately $126 million and 256 gross wells drilled. Over 50% of our development capital was invested in oil properties, however, the majority of the wells drilled were in our shallow natural gas resource play which offers a significant number of low risk infill drilling locations. Our Canadian drilling program employed as many as 17 drilling rigs and 20 service rigs in our operations including those dedicated to our Kirby delineation program throughout the quarter. Our U.S. operations also had two drilling rigs and 6 - 7 service rigs in use through the quarter. while modest savings were realized on day rates for drilling rigs, labour, steel and service costs have not abated.

2008 Production and Capital Spending
as at March 31, 2008