©2002 Prebon Energy, All Rights Reserved Credit, Risk and Financial Disclosures ©2002 Prebon Energy, All Rights Reserved

©2002 Prebon Energy, All Rights Reserved David E. Rutter Chief Executive Officer of Prebon Yamane’s Global Energy Group Responsible for the day-to-day operating of Global Energy units, located in Asia, the Americas and Europe Previously Prebon Yamane’s Managing Director of the Americas with 15+ years Financial Markets experience Principle of the Prebon Yamane Group ©2002 Prebon Energy, All Rights Reserved

©2002 Prebon Energy, All Rights Reserved Subsidiary of Prebon Yamane Group PYG has locations in 27 financial centers throughout the world Brokers transactions with a value exceeding US$65 Trillion annually $500 million in global revenues and 1,750 in staff Prebon Energy is the largest global energy broker. Product coverage includes Power, Gas, Oil, Emissions and Coal markets Energy centers located in New York, London, Amsterdam, Singapore, Sydney and Tokyo. Emissions in Houston and Salt Lake City ©2002 Prebon Energy, All Rights Reserved

©2002 Prebon Energy, All Rights Reserved Market Downturn ©2002 Prebon Energy, All Rights Reserved

©2002 Prebon Energy, All Rights Reserved How did we get here? Rapidly growing markets in adolescent stage Non-financial market participants geared towards trading Low barriers to entry Enron effect: Market sentiment shift .com confusion: The rush to the billion dollar platform Participants desire to capitalize on equity investments creates confusion and conflicts Platforms should exist for efficiency Lack of Industry Standards Poor documentation and no clearing No common credit and clearing valuation methodologies Lack of reliable indices The trading platform myth In traditional financial markets, significant resources are spent on Risk Management, Capital Allocation and Credit Issues - most market players are non-traditional players ©2002 Prebon Energy, All Rights Reserved

©2002 Prebon Energy, All Rights Reserved How do we get out? Strong Medicine: Market forces already at work Punishing loss of market capitalization; credit downgrades, senior executive ousted Energy Trading Companies now very focus on capital allocation, risk management and credit Clearing Solution evolving in the next 12 - 24 months Energyclear, LCH, NYMEX, OM and Bank of Hanover Market Indices emerging Daily ICE Index LPX Financial Institutions becoming involved UBS, Barclays, BOA and others Long term outlook: Bullish In traditional financial markets, significant resources are spent on Risk Management, Capital Allocation and Credit Issues - most market players are non-traditional players ©2002 Prebon Energy, All Rights Reserved