Prospects for Deepwater Production in the Gulf of Mexico Jack Moore, President & CEO Cameron NOIA Fall Meeting October 9, 2009 Colorado Springs, CO

Prospects for Deepwater Production in the Gulf of Mexico AGENDA Historical: U.S. GOM vs. Other Deepwater Provinces Past Deepwater Activity Focus: Who have been the largest players? Current Trends in GOM Exploration Activity & Implications for Future Activity Levels Challenges for Both Operators and Service Companies in the GOM

Relative Size and Growth of Deepwater Development by Region The Gulf of Mexico contributed nearly a third of deepwater wells five years ago but only about 10% today. GOM Capex is also lower than West Africa and Brazil Source: PFC Energy

Where has deepwater drilling and production been focused in the Gulf of Mexico? Deepwater exploration and drilling was overwhelmingly concentrated in the Miocene formations in the Garden Banks, Mississippi Canyon and Green Canyon areas in the 1990’s and from 2000-2008. However, Jack St. Malo, Kaskida and now Tiber are located in a new zone, the Lower Tertiary Play, principally in the Keathley Canyon and Walker Ridge areas. Other potential new prospects in the Lower Tertiary include Julia (Walker Ridge 627; ExxonMobil-Statoil) 31,100 FT total depth and Stones (Walker Ridge 508; Shell/Marathon/Petrobras/ENI) 9,576 FT water, total depth unknown.

Gulf of Mexico Exploration & Production Areas New Focus Historical Focus

What is different about the Lower Tertiary Plays? Much deeper – Tiber is the deepest offshore well drilled, with TVD of 35,055 FT and 4,123 foot water depth. Much hotter & much more pressure – HPHT. Lower Tertiary wells will cost more than Miocene deepwater wells – on average, 25 to 50% more. Production volumes are less proven, but are generally much larger than the Miocene plays, generally double to triple Miocene formations. e.g., Kaskida is thought to hold 2-4 billion in barrels of recoverable reserves vs. about 1 billion for Thunder Horse. Accordingly, these discoveries may quickly restore GOM production growth and eventually motivate a new wave of exploration and drilling.

BP has been a clear leader in the GOM followed by Chevron, BHP and Shell (2009)

BP and Shell have spent the most. (2009 Active Projects)

Thunder Horse, Mars & Atlantis have been the largest producers to date -- all located in Miocene structures

CAPEX The Miocene Plays have been expensive, but the Lower Tertiary Plays may be much more prolific -- and require much more CAPEX

Potential Technology Challenges in the Lower Tertiary Plays Drilling related challenges to measure and complete plus production challenges such as: Due to water depth and total depth, flow assurance and hydrates Possible solutions: Subsea boosting & processing, all electric production systems, improved insulation systems Due to high pressures and temperatures, equipment performance and maintenance issues Possible solutions: HPHT seals, HIPPS systems, 20,000 psi drilling systems, and 15,000 psi production systems Conclusions Lower Tertiary plays have lots of upside, but will be difficult to drill and produce, and will challenge drillers, service companies and operators technically. These new plays, such as BP Tiber, may revive large scale deepwater drilling programs in the GOM over the next decade which have been eclipsed recently by programs in West Africa and Brazil.