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Attractive reserve additions
from our U.S. properties, oil sands and conventional Canadian operations were
partially offset by unexpected capital inflation and negative revisions (mainly
in the probable category) in our Canadian conventional areas. Enerplus achieved
overall proved plus probable finding, development and acquisition costs
including future development capital of $23.19/BOE in 2006 ($20.45/BOE
excluding FDC) and a three-year average FD&A cost of $14.90/BOE ($11.51/BOE
excluding FDC).
Other key points in our
reserve assessment include:
- Reserve life index increased to 14
years in line with our historical performance.
- We replaced 82% of our produced
reserves production without the benefit of any significant acquisitions. Over
the last five years, we have averaged almost 200% reserve replacement inclusive
of acquisition and divestment activity.
- Our U.S. operations added 7.3
million BOE at a one-year proved plus probable F&D cost of $13.78/BOE including
FDC reflecting a 20% increase in reserves at December 31, 2005 as a result of
our strong operational and development performance in the U.S.
- 6.9 million BOE were added to our
oil sands reserves at a one-year proved plus probable F&D cost of
$10.54/BOE ($5.67/BOE excluding FDC) reflecting another successful year of core
hole drilling and analysis.
- No changes were made to the
allocation of reserves associated with the SAGD portion of the Joslyn lease
versus the mining portion. Total and Enerplus are in discussions on a potential
change to the lease development plan which could impact the reserve allocation
between the mine and SAGD portions of the lease and the timing of reserve
bookings.
- There are no proved or probable mining
reserves included in our year-end reserve summary. The current North Mine
project continues to progress and there is the potential to book probable reserves
associated with this project at year-end 2007.
- Canadian conventional development
added over 19 million BOE, excluding negative revisions, at a one-year proved
plus probable F&D cost of $20.63/BOE ($17.17/BOE without FDC). This
reflects the strong conventional drilling results we achieved in Canada which were partially offset by the negative revisions tied to existing Canadian
operations.
- Proved and probable negative
revisions of 7.5 MMBOE were predominantly from the "probable" reserves category
which has less certainty than "proved" reserves. These revisions represent less
than 2% of our total year-end reserves and were mainly due to performance and
economic factors in a few of our older Canadian conventional properties.
- No changes to the after-tax calculations
have been included for our Canadian assets in connection with the proposed
changes on taxability for trusts in the Canadian market. Should the proposed
legislation be enacted, Enerplus would provide an updated analysis which would
include the effect of any enacted tax legislation.
- Acquisition and divestment activity
resulted in no significant change to our reserves. Minor acquisitions were
offset by the sale of a 1% working interest in our Joslyn lease.
For a full description of our
reserves and the associated reserve reporting determination and methodologies,
please see the reserve section.
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