Shallow natural gas and CBM are similar resource plays in that the key to success with each is the ability to execute large, multi-well development programs efficiently and to manage the post-drilling operations of these low pressure wells. The large aerial extent, low geologic risk and the repeatable, predictable, large-scale nature of shallow gas and coalbed methane make them bona-fide resource plays.

Shallow natural gas has been a core development area for Enerplus since the late 1990s. The shallow natural gas formations in southern Alberta and southwest Saskatchewan consist of massive, tightly packed sandstone that covers an area of over 10,000 square kilometres. These zones are typically less than 800 metres in depth and upper Cretaceous in age, with most production coming from the Milk River, Medicine Hat, and Second White Specks producing zones.

Enerplus has been investing in coalbed methane (‘‘CBM’’) assets since 2004. Alberta contains significant amounts of coal distributed throughout the southern Plains, Foothills, and Mountain regions. The major coal zones in the Plains region are found in the Scollard (or Ardley), Horseshoe Canyon, Belly River, and Mannville geological zones, or strata. Enerplus is currently focused on the Horseshoe Canyon formation in the Trochu, Bashaw and Joffre areas in Alberta’s southern Plains region, which do not have the water handling issues often associated with CBM production.

Approximately 26% of Enerplus’ average daily production volumes and approximately 26% of our estimated Proved plus Probable Reserves are comprised of shallow natural gas and CBM. Approximately 67% of this production is operated by Enerplus. Our largest shallow natural gas producing properties are Shackleton, Bantry, Hanna Garden, Verger and Medicine Hat South, all of which are located in Alberta with the exception of Shackleton, which is in southwest Saskatchewan.

For the first quarter of 2008, due to the recent strengthening in natural gas prices and the additional working interests in the Shackleton property acquired from Focus, we increased our activities in our shallow gas resource play. During the quarter, Enerplus drilled almost 150 shallow gas wells, the majority of which were in the Countess and Verger area taking the well density to 16 wells per section. At Shackleton, a total of 41 Milk River natural gas wells were drilled during the quarter and booster compression was installed in the Miry Bay area. In addition, a total of 24 existing wells were recompleted to add reserves and prduction from the Milk River interval as well.