Chalker Energy Partners, LP 2007 IPAA Private Capital Conference Houston, Texas January 2007

Background on Chalker?  Chalker I Formed in December 2003  Built an East Texas Focused Company  Exceptional Operational & Geological Team  Total Equity Commitment of $25MM from QEP II  Sold to Forest Oil for $225MM, Closed 3/31/06  Chalker II Up and Running

The Chalker I Team Alan SmithPresident & CEO Tom CampbellEVP & COO Gary HallVP – Geoscience Larry TollesonVP – Operations Janie IsbellSr. Engineering Tech Gayla MasseySr. Executive Assistant

Chalker I Strategy  Initially an Acquire/Exploit Approach in Tight Gas Sand Basins  Evolved into Drilling Strategy in East Texas  Focus in Cotton Valley Sands  Utilize Relationships & Local Knowledge to Access Opportunities  Leverage Engineering, Operational & Geological Strengths  Creative Deal Structures

Why Tight Gas Basins & Multiple Pays?  Longer Life Assets with Predictable Reserves  Higher Margin Assets – Lower Operating Costs  Few Dry Holes Drilled – Basin Centered Gas, Stacked Pays  East Texas Stratigraphy - Rodessa- Cotton Valley A-D Sands - Pettet- Bossier - Travis Peak- Cotton Valley Lime  Technology has Enhanced Reserve Recoveries

Focus Areas South Texas East Texas Panhandle 4 County Drilling Area

Chalker I Results  Made 17 Producing Property Acquisitions - $17MM  Acquired 16,000 Net Acres in Cotton Valley - $6MM  Gained Access to Three Drilling Rigs  Drilled 42 Wells, 30 Operated, All Successful  Spent $46MM Through the Drill Bit, Avg F&D $1.40/Mcfe

Lease Position East Texas

Production – Base + Uplift Actual Results 1 Rig 3 Rigs

Reserves & Production Summary ProductionProved Reserves 2005 YE Bcfe, 90% Gas 2004 YE 15.7 Bcfe, 58% Gas

Chalker I Sale  Proved Up Acreage Thru the Drill Bit  Excellent Market Fundamentals  Simmons & Griffis Ran a Formal Process  Forest Preempted with Signed PSA on 2/9/06  Sales Price - $225MM  Reserve Cost - $2.32/Mcfe (Announced)  Production Multiple - $19,900/Mcfed (Announced)  Outstanding Results  ROI – 7.4X  IRR – 331%

Lessons Learned  We can Make Money in Up or Down Cycle – Must Adjust Acquisitions & Drilling Allocations  In Drilling Mode, Land Function Highly Critical  Deal Creativity is Very Important  Geographically Focused Asset Base Adds Significant Premium at Exit  Equity Partner Can & Did Add Value in Managing Leverage, Risk Management, Exit Deal Structure & As a Technical Sounding Board

Chalker II Formation & Strategy  Smith is Chairman of Chalker II, Full-Time at Quantum  Doug Krenek Joined Chalker Team, April 1, 2006 as President & CEO  Equity Commitment of $50MM from QEP III, $7MM from Management and Other Investors  Continued Focus in East Texas & Other Tight Gas Basins in Texas  Leverage Off of Technical Knowledge in Focus Areas  Be Opportunistic!

The Chalker II Team Alan SmithChairman Doug KrenekPresident & CEO Gary HallVP – Geoscience Larry TollesonVP – Operations Bill DukesVP - Land Janie IsbellSr. Engineering Technician

Chalker II Update  Closed Two Acquisitions - $50MM $45MM Acquisition in Rusk County $5MM Acquisition in North Texas  Total Net Acerage – 35,000 Acres East Texas – 13,000 Acres Houston County – 14,000 Acres North Texas – 8,000 Acres  Current Production – 4.5 Mmcfed  Four Rigs Running in East Texas  2007 Drilling Capex - $60MM