1. Projection of Future Property Tax Revenues from Barnett Shale Activity P RITCHARD & A BBOTT, INC. VALUATION CONSULTANTS P RITCHARD & A BBOTT, INC. VALUATION CONSULTANTS City of Fort Worth, Texas! Presentation to City Council Pre-Council Meeting, Tuesday, March 10, 2009

2. Goal: Predict property tax revenues for the City of Fort Worth from Barnett Shale activity* for the next twenty (20) tax years (2009-2028). *Mineral interests associated with active leases as of January 1 of each future tax year. Does not include land, drilling or service rigs, compressor stations, pipelines, personal property, etc.

3. Results of Pritchard & Abbott Study* Tax Year Fair Market Value Ad Valorem Taxes 2009$1,519,372,052$12,990,631 2010$1,694,685,071$14,489,557 2011$1,872,464,913$16,009,575 2012$2,101,363,385$17,966,657 2013$2,375,361,226$20,309,338 *First five years only. See full report for additional years’ forecasted results. Subtotal, 1 st 5 years: $81,765,758 Grand Total, all 20 years: $429,289,831

4. Background

5. TOP TEN TEXAS OIL AND GAS PRODUCING COUNTIES RANKED BY PRELIMINARY PRODUCTION (DECEMBER 2008)* COUNTYCRUDE OIL (BBLS)COUNTYTOTAL GAS (MCF) 1. GAINES2,109,5891. TARRANT34,983,723 2. ANDREWS2,070,6752. JOHNSON32,637,346 3. YOAKUM1,978,4083. ZAPATA23,125,149 4. ECTOR1,593,3244. PECOS23,096,438 5. HOCKLEY1,439,3465. PANOLA22,922,316 6. UPTON1,389,4306. FREESTONE22,789,664 7. SCURRY1,247,9407. ROBERTSON21,518,004 8. PECOS974,4078. DENTON17,126,348 9. MIDLAND941,4079. WISE16,645,344 10. MARTIN819,05410. WEBB15,411,258 *Per “Texas Monthly Oil and Gas Statistics” news release of February 25, 2009 by Texas Railroad Commission: www.rrc.state.tx.us/pressreleases/2009.

6. Barnett Shale Activity in Tarrant CAD *Figures for 2008 include supplemental appraisals. Beginning 2008, CAD total does not include any property outside Tarrant County. However, all points for City of Fort Worth on this plot do include areas in Denton and Wise counties.

7. Pritchard & Abbott Study

9.  $12,990,631 taxes  $14,489,557 taxes  $16,009,575 taxes  $17,966,657 taxes  $20,309,338 taxes

10. Executive Summary Projection of Future Ad Valorem Tax Revenues from Barnett Shale Activity City of Fort Worth, Texas (YEARS 1-10) Tax Year Sum of Forecasted Production Volumes (mcf) Sum of Forecasted WI Net Revenue Sum of Forecasted RI Net Revenue Total Fair Market Value Total Ad Valorem Taxes 1 2009803,427,683$2,417,894,146$1,121,571,496$1,519,372,052$12,990,631 2 2010884,696,975$2,697,199,802$1,311,413,695$1,694,685,071$14,489,557 3 2011988,495,756$2,963,693,031$1,498,115,691$1,872,464,913$16,009,575 4 20121,111,344,536$3,300,370,992$1,720,087,565$2,101,363,385$17,966,657 5 20131,250,413,420$3,702,886,066$1,975,124,303$2,375,361,226$20,309,338 6 20141,388,791,040$4,121,482,892$2,238,197,762$2,658,553,782$22,730,635 7 20151,507,222,204$4,495,066,525$2,478,075,211$2,910,641,978$24,885,989 8 20161,588,108,121$4,789,376,520$2,662,832,636$3,107,540,866$26,569,474 9 20171,616,334,378$4,920,090,723$2,764,559,277$3,194,156,897$27,310,041 10 20181,597,863,119$4,899,583,132$2,787,923,015$3,183,616,093$27,219,918

11. Executive Summary Projection of Future Ad Valorem Tax Revenues from Barnett Shale Activity City of Fort Worth, Texas (YEARS 11-20) Tax Year Sum of Forecasted Production Volumes (mcf) Sum of Forecasted WI Net Revenue Sum of Forecasted RI Net Revenue Total Fair Market Value Total Ad Valorem Taxes 11 20191,560,663,470$4,823,516,954$2,777,550,230$3,135,770,538$26,810,838 12 20201,504,175,599$4,682,253,869$2,730,640,004$3,044,628,767$26,031,576 13 20211,432,618,093$4,484,335,029$2,652,911,065$2,916,406,943$24,935,279 14 20221,352,619,780$4,247,039,520$2,555,216,101$2,762,353,423$23,618,122 15 20231,278,422,876$4,032,346,582$2,463,007,916$2,625,408,347$22,447,241 16 20241,204,864,261$3,814,459,582$2,367,758,744$2,481,622,588$21,217,873 17 20251,134,443,076$3,614,236,637$2,273,962,866$2,344,703,067$20,047,211 18 20261,066,845,013$3,429,564,134$2,181,221,936$2,214,307,084$18,932,326 19 20271,002,015,932$3,259,813,786$2,089,663,549$2,090,590,632$17,874,550 20 2028940,429,498$3,107,500,007$2,000,491,220$1,975,792,672$16,893,027

12. Conclusions

13. Due to recent price crash, pace of drilling in short term (2009-10) will be slower than originally thought. High initial decline rates almost ensure that overall value (and associated property taxes) will only increase if new wells are continuously being drilled. It is unlikely that 100% of the acreage in the City will ever be exploited (reach of drill bit, lack of lease, etc.). Well count and future drilling, completion, and production techniques will be dependent on price (as is typical), but the City’s urban environment will present unique challenges to all parties.

14. Analysis and charts prepared by: Rodney K. Kret, RPA Director of Mineral Appraisals P RITCHARD & A BBOTT, INC. VALUATION CONSULTANTS 4900 Overton Commons Ct. Fort Worth, Texas 76132-3687 817.926.7861 (main) 817.927.5314 (fax) www.pandai.com NOTE: All forecasts and conclusions herein are solely the opinion of Pritchard & Abbott, Inc. (P&A), based on all reasonably ascertainable non- proprietary data. Absolutely no guarantee of any kind is given or implied by P&A as to the actual occurrence of any future events or values.

15. Tarrant County Production Summary False declines for recent months due to late reporting. 2008 Cat. G1 Value for Tarrant CAD: $2,731,804,830

16. Barnett Shale Activity in Tarrant CAD *Figures for 2008 include supplemental appraisals.