Energy Inc. Forging Growth in an Uncertain World New York Society of Financial Analysts Annual Update Fall 1998

Energy Inc. is... A diversified global energy concern Assets of $23.5 billion Total revenues of $21.0 billion Operating income of $1.8 billion Crude oil production, refining, marketing Natural gas production, gathering, processing, transportation Power production Gas, power, liquids marketing NYSE Symbol “EI”

…a Worldwide... Growth Targets Worldwide HQ: Houston NORTH AMERICA Oil and gas E&P, R&M; pipelines; power generation and marketing; environmental services Growth Targets INDONESIA Oil and gas exploration and production Argentina Gas E&P; pipelines; power generation and marketing UNITED KINGDOM Power generation, marketing; natural gas marketing

...Emerging Leader... In 1997 Return on Capital Employed (ROCE), Energy Inc. moved ahead of other competitors and is in the rank of world performers. Note: ROCE computed w/o minority interest

…in Value Chain Development... Major Divisions Natural Gas and Power Marketing Gathering, Processing Power Generation Gas Stream Pipelines Oil and Gas Exploration and Production Energy Pipe, N.A. Energy Asia Energy del Sur Energy Inc. Power EastCan Power (Canada) Energy, U.K. Energy del Sur Challenge Partners Challenge Partners Europe Energy Inc. N.A. Success Exploration Bold Oil & Gas Energy Asia (Indonesia) Energy del Sur (Argentina) Environmental Services EcoServices, LLC Marginal Refining, N.A. Energy Asia Challenge Partners Refined Products, Natural Gas Liquids Marketing Oil Stream Refining

...Organized for Entrepreneurship...

..to Meet Energy Needs in the 21st Century... Worldwide production in mb/d (oil, refining throughput and LPG); mmcf/d (natural gas); and megawatts (electric power).

…and Create Value for Shareholders. Energy Inc. demonstrated one of the best performances in 1997 for Net Income per Share of Common Stock. Our 432,000 shareholders and 16,100 employee-owners hold $25.59 per share of equity.

We Care about the World of Energy... Our philosophy-- Support market development Maintain the highest environmental standards Maintain strict corporate governance and ethical standards Operate profitably!

...and the World of People. Our international community associations-- Habitat for Humanity Doctors Without Borders Nature Conservancy International An Energy Inc. initiative-- Estudios de Energía, integrated masters program in commercial practices for emerging professionals, Rio de Janeiro

Our Long-Term Business Strategies Achieve reserves replacement through key frontier investments Consolidate our natural gas businesses and focus on the gas value chain Expand our electric power operations to add value Grow our liquids businesses in intermediate markets Establish a corporate-wide environmental audit Initiate a long-term energy business transition plan for a sustainable future

Our Long-Term People Strategies Energy Inc. has achieved our 1997 performance while increasing our labor force by 3.5 percent Our goals-- Continue to build our human capital Encourage creativity and innovation Foster diversity and intellectual enrichment Have fun!