CME Group Henry Hub June 12, 2014

CME GROUP INTRODUCTION ENERGY AT CME NATURAL GAS HENRY HUB Agenda CME GROUP INTRODUCTION ENERGY AT CME NATURAL GAS HENRY HUB Overview History Contract Specs Location About the Contract Henry Hub Product Slate

CME GROUP OVERVIEW The worlds largest and most diverse marketplace 3 Billion 6 Pioneers of Financial Futures Contracts Traded Annually Major Product Classes 24 160 Industry-Leading Market Liquidity Hour Access Years of Industry Expertise 2

ENERGY AT CME NYMEX ENERGY PRODUCTS – TRULY GLOBAL 2

WHY TRADE. WHAT DRIVES ENERGY PRICES WHY TRADE? WHAT DRIVES ENERGY PRICES? Physical energy products are subject to myriad fundamental price drivers, and derivatives help hedge against future price volatility. GLOBAL DEMAND OPEC TAXES ENVIRONMENTAL POLICIES LOGISTICS AND INFRASTRUCTURE GEOPOLITICAL CONFLICTS CURRENCY FLUCTUATIONS CHANGING SUPPLY LANDSCAPE PRODUCTION TECHNOLOGY SEASONALITY 2

NATURAL GAS Natural Gas has accounted for about one third of the total energy volume traded at CME NYMEX 2

Natural Gas is moved by pipelines from producing fields to consumers 305,000 miles of transmission pipelines 11,000 delivery points 5,000 receipt points 1,400 interconnection points The North American Natural Gas market is robust with many dynamic trading points, with Henry Hub as the foundation.

HENRY HUB All about Henry Hub - Overview Henry Hub launched in 1989 It is the third largest physical commodity futures contract in the world by volume Widely used as a national benchmark price for natural gas, which continues to grow as a global energy source Located near Louisiana's Gulf Coast, the hub connects to four intrastate and nine interstate pipelines The entire hub can transport 1.8 billion cubic feet per day (Bcf/d). 2

HENRY HUB History The "Henry" hub is so named for its location in the Henry hamlet of Erath, which was named after the Henry High School that stood there until recently. This school was named for its benefactor, William Henry, who originally immigrated from Germany. There are Henry descendants in the area to this day. The Henry price is used to compute location ‘basis’ at all other natural gas trading points in North America and thus is the reference price for tens-of-thousands of derivative instruments and other commercial contracts. 2

Daily Volume for NG is averaging over 390,000 contracts in 2013 HENRY HUB (HH) Contract at a glance Daily Volume for NG is averaging over 390,000 contracts in 2013 2

Henry Hub is key location in US Nat Gas Supply Chain Contract Specs 10,000 mmBtus Physically deliverable at Erath, LA if not offset prior to expiration Listed monthly for next 10 years Henry Hub – key delivery point Basis points Transport and storage implications North American Natural Gas Pricing and Trading ‘Hubs’ Chicago +.905 AECO - .6358 SoCal + .174 PG&E Citygate + .35 NWP - .035 Waha - .12 HSC - .084 Henry Hub $5.214 Legend Hub Name Price / Typical Differential from HH

HENRY HUB (HH) Things to know about contract Natural gas futures prices are based on delivery at the Henry Hub in Louisiana Traded via open outcry, electronically on CME Globex and off-exchange for clearing only as an EFS, EFP or block trade through CME ClearPort. Located near Louisiana's Gulf Coast, the hub connects to four intrastate and nine interstate pipelines 2

HENRY HUB Henry Hub Natural Gas Futures Product Slate Our benchmark Henry Hub Natural Gas Futures (NG) contract – the most liquid natural gas contract in the world The Henry Hub Natural Gas Look-a Like Last Day Financial Futures (HH) contract – the same size as our NG contract and making it easy for you to trade out of NG into HH if you want to hold onto your position in the market Our Henry Hub Natural Gas Last Day Financial Futures (NN) contract – allows you to hedge your basis risk and is highly correlated to our NG contract 2

Gas Trading and Seasonality Gas trades monthly, quarterly, yearly and in seasonal strips April – October            Injection Season  (Summer) Nov – March               Withdrawal Season (Winter) Because of the changeover between seasons, the March/April spread is interesting…and volatile March- April Spread High Low Settle Trading Range 30-Jan 0.891 0.561 0.653 0.33 31-Jan 0.531 0.386 0.489 0.145 3-Feb 0.422 0.363 0.398 0.059 4-Feb 0.729 0.412 0.71 0.317 5-Feb 0.975 0.478 0.484 0.497 6-Feb 0.706 0.352 0.369 0.354 7-Feb 0.431 0.284 0.259 0.147

CONTACT US Learn more about Clearing Membership Options at cmegroup.com/clearingmemberships and Non-Clearing Membership Options at cmegroup.com/nonclearingmemberships For more information on energy or how to access our market, please contact Energy@cmegroup.com 2

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