Energy Sector Stock Presentation Dan Geisler Olga Boder(Firdman) Fall 2009

Agenda S&P 500 Energy Sector SIM energy holdings % of index top market cap top performers Top Movers industries within sector SIM energy holdings what companies and industries percent of portfolio performance Sector/industry outlook Oil supply/demand Oil price forecast Regression against stocks/sector Valuation Industries in SIM sector as a whole potential attractive industries Recommendation

S&P Sector Breakdown

S&P 500 Top Market Cap No Stock % Weight in the Index Um % 1 1   ExxonMobil 3.77 2   Microsoft 2.36 6.13 3   Procter & Gamble 1.86 7.99 4   Apple 1.85 9.84 5   JPMorgan Chase 1.80 11.64 6   Johnson & Johnson 1.78 13.42 7   IBM 1.73 15.15 8   Chevron 1.68 16.84 9   General Electric 1.66 18.50 10   AT&T 20.16

S&P 500 Top Performers Ticker Name Sector YTD Return % S&P 500 Best Returns YTD 2009 (NYSE:THC) TENET HEALTHCARE CORP Health 373.04% (NYSE:XL) XL CAPITAL LTD Financials 363.78% (NYSE:GNW) GENWORTH FINANCIAL INC A 319.44% (NYSE:F)  FORD MOTOR CO Consumer Durable 218.34% (NYSE:WDC) WESTERN DIGITAL CORP Technology 207.34% (NYSE:MU)  MICRON TECHNOLOGY INC 206.82% (NASDAQ:WFMI)  WHOLE FOODS MARKET INC Consumer Services 204.77% (NASDAQ:EXPE)  EXPEDIA INC Transportation 184.83% (NYSE:FCX) FREEPORT-MCMORAN C & G Basic Material 172.87% (NYSE:AMD)  ADVANCED MICRO DEVICES 169.91%

Energy and S&P 500

S&P 500 Energy Sector As of November 2 2009 Close : 424.18 Net Change: 1.96 % Change: 0.46 Year to_Date: 9.79

Top Movers Gainers (% price change) Last Trade Change Mkt Cap Encore Acquisition Co. EAC 44.67 +7.60 (20.50%) 2.36B Harvest Natural Resources HNR 5.73 +0.24 (4.37%) 190.07M Stone Energy Corporation SGY 15.95 +0.62 (4.04%) 766.14M Comstock Resources, Inc. CRK 42.72 +1.63 (3.97%) 1.99B Intl. Coal Group, Inc. ICO 4.25 +0.16 (3.91%) 655.15M

Top Movers Losers (% price change) Last Trade Change Mkt Cap Denbury Resources Inc. DNR 13.09 -1.51 (-10.34%) 3.27B Global Partners LP GLP 22.2 -2.01 (-8.31%) 295.28M Rosetta Resources Inc. ROSE 12.65 -0.88 (-6.50%) 662.30M Bronco Drilling Co., Inc. BRNC 5.91 -0.41 (-6.49%) 160.86M Hercules Offshore, Inc. HERO 4.8 -0.33 (-6.43%) 544.00M

Top Movers Most Actives (dollar volume) Last Trade Change Mkt Cap Exxon Mobil Corporation XOM 72.15 +0.48 (0.67%) 342.50B Chevron Corporation CVX 76.64 +0.10 (0.13%) 153.70B Petroleo Brasileiro SA PBR 46.71 +0.49 (1.06%) 204.92B Occidental Petroleum Corp OXY 76.82 +0.94 (1.24%) 62.28B ConocoPhillips COP 49.98 -0.20 (-0.40%) 74.12B

S& P 500 Industries Within Energy Sector   Index Value % of 500 or Sector Price Changes (%) 5-Year 1 Wk. YTD 2008 5-Yr CAGR Beta Std. Dev. Coal & Consumable Fuels 89.52 1.93% 3.30% 85.20% -64.20% N/A Integrated Oil & Gas 424.69 59.02% 5.10% 0.30% -23.50% 8.80% 0.7 20.7 Oil & Gas Drilling 531.17 1.96% 75.00% -62.00% 10.50% 1.3 33.8 Oil & Gas Equipment & Services 445.8 14.61% 7.80% 67.30% -59.50% 11.70% 1.4 35.3 Oil & Gas Exploration & Production 482.39 18.32% 3.50% 42.10% -35.00% 18.30% 1.1 31 Oil & Gas Refining & Marketing 189.55 1.43% 4.30% -10.70% -64.70% -4.80% 1.2 39 Oil & Gas Storage & Transportation 107.94 2.73% 3.90% 34.90% -51.60% Energy Sector 446.72 12.35% 3.80% 15.60% -35.90% 9.90% 0.9 23.3

SIM and S&P 500

SIM Companies and Industries Quantity Security Ticker Industry 14,700 BP plc. - ADR BP Major Integrated Oil & Gas 12,300 ConocoPhillips Co. COP 10,200 Transocean Ltd. RIG Oil & Gas Drilling & Exploration

SIM Percent of Portfolio

Industry Current Prices: Oil: $79.50 BP: $57.55 COP: $50.75 RIG: $85.91

Crude Oil vs. Sector Performance

Regression Analysis

Valuation Ratios COP Absolute High Low Median Current P/Trailing E 13.6 3.5 7.6 P/Forward E 11.3 5.3 8.0 8.9 P/B 2.3 0.8 1.5 1.3 Overvalued by >20% P/S 0.9 0.2 0.6 Inline within 20% P/CF 8.2 5.2 5.1 Undervalued by >20% BP Absolute 16.0 4.5 10.7 13.4 13.8 4.7 10.3 10.5 3.3 1.4 2.6 1.8 1.1 0.3 9.7 7.1 RIG Absolute 160.8 3.4 25.2 6.4 49.0 3.1 12.1 2.8 9.4 6.8 2.2 33.8 18.4

Valuation Ratios (cont.) Energy Absolute High Low Median Current P/Trailing E 14.9 6.1 11.7 12.1 P/Forward E 16.2 7.8 11.5 15.4 P/B 3.8 1.4 3.0 2.1 Overvalued by >20% P/S 0.5 1.1 1.0 Inline within 20% P/CF 9.4 4.1 7.3 5.4 Undervalued by >20%   Energy Relative to S&P 500 0.88 0.53 0.70 0.68 1.20 0.57 0.74 0.91 1.40 0.80 1.10 1.00 Overvalued by >10% 0.60 0.9 Inline within 10% 0.90 0.50 Undervalued by >10% Oil Drilling Relative to S&P 500 3.70 0.28 0.98 0.41 2.00 0.79 1.70 4.30 2.90 1.80 0.40

Valuation Ratios (cont.) Oil Integrated Relative to S&P 500 High Low Median Current P/Trailing E 0.79 0.51 0.61 0.64 P/Forward E 1.20 0.46 0.68 0.78 P/B 1.40 0.90 1.00 Overvalued by >10% P/S 0.80 0.50 0.60 Inline within 10% P/CF Undervalued by >10% Oil Exploration Relative to S&P 500 1.10 0.55 0.70 1.90 0.73 1.30 3.50 1.50 2.20 2.50 0.40 Oil Equipment Relative to S&P 500 0.58 0.77 1.70 2.80 2.00 1.80 1.60

Valuation Ratios (cont.) Oil Refining Relative to S&P 500 High Low Median Current P/Trailing E 1.00 0.23 0.50 0.31 P/Forward E 3.90 0.39 0.55 P/B 1.30 0.30 0.80 Overvalued by >10% P/S 0.10 0.20 Inline within 10% P/CF 0.70 Undervalued by >10% Coal Relative to S&P 500 23.30 1.40 0.74 2.10 0.95 1.20 1.90 1.10 4.00 0.90 Price/Oil Energy Sector 10.1 4.1 6.3 5.9 BP (BP) 1.3 0.5 1.1 0.8 Overvalued by >20% ConocoPhillips (COP) 1.4 0.6 1.0 0.7 Inline within 20% Transocean (RIG) 1.6 1.2 Undervalued by >20%

Recommendation Hold the overall % for the sector. Hold Transocean Ltd. since it’s a buy right now. Reduce the % of BP plc. – ADR and ConocoPhillips Co. Diversify our energy sector by purchasing a stock with an exposure to a non-oil energy type, like natural gas companies. Possible purchases: Chesapeake Energy the largest producers of natural gas in the nation. Chesapeake Energy the largest producers of natural gas in the nation and the most active driller of new wells in the U.S.  Headquartered in Oklahoma City, their strategy is focused on discovering, acquiring and developing conventional and unconventional natural gas reserves onshore in the U.S., primarily in the "Big 4" natural gas shale plays: the Barnett Shale of north-central Texas, the Haynesville Shale of East Texas and northwestern Louisiana, the Fayetteville Shale of central Arkansas and the Marcellus Shale of the northern Appalachian Basin. They have substantial operations in various other plays, both conventional and unconventional in the Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and East Texas regions of the U.S.

Questions?