1. Overview of the A & D Market IPAA Oil & Gas Investment Symposium April 19-21, 2004 New York, New York Kenneth R. Olive, Jr. Chief Executive Officer Petroleum Place Energy Advisors The Oil & Gas Asset Clearinghouse

2. Specializing in the Customized Marketing of Upstream Oil & Gas Assets Corporate Structure

3. Divestment Alternatives Auction Properties Geographically diverse Operated & non-operated working interests Premiums for royalties & minerals Individual property values $0-10 MM Primarily PDP Reserve (70%+) Negotiated Transactions Geographically consolidated packages PDP and/or with substantial reserve upside > $20 MM property packages or companies Technically or operationally complex Mid-Value Negotiated Transactions $3-20 MM with material reserve upside Operated & non-operated working interests

4. Auctions, Negotiated Sales & MVNs Calendar Year Gross Sales M Total Sales

5. 2003 A&D Review  Total MA&D Volume = +$14 Billion  Merger Activity Relatively Quiet –Exceptions: Devon/Ocean & Plains/3Tec  Average Prices for Reserves: – US prices = $6.90/boe (PDP) or $1.00-$1.35/mcfe –Canada = C$9.33 (US $6.99) for “Established Reserves” (Total Proved + ½ probables, before royalty)  Limited Number of Sizable Buying Opportunities  Debt Loads are Down, War Chests are Full

6. 2003 Review - Sellers  Majors & Public Independents –Focused on shareholder value rather than rate & reserves –Used high prices as opportunity to high-grade portfolio –First real portfolio management since mega-merger days  Private Independents –Viewed 2003 as best time to sell since 2001 –Aggregated enough assets to be significant & attractive –Financial backers are encouraging exit  Small Independents –Can’t buy, so why not sell at lower capital gains tax rates

7. 2003 Review - Buyers  Public Independents:  Were Most Aggressive Buyers in 2003 –Tend to incorporate hedging strategies –Use forward strip pricing as far out as possible –Are well capitalized & have adequate production base to fully support an aggressive hedging strategy –Markets are still rewarding growth –Turning a blind eye to debt (leverage = high returns) There is a difference between Bidders & Buyers

8. 2003 Review - Buyers  Private Independents: –Having difficulty competing as a buyer –Merchant fund & private equity return hurdles are challenging –Limited production base to support hedging strategies –Tend to view current market as a selling opportunity –Start again with new investors under better terms If you can’t buy anything, then why not sell?

9. Valuation Considerations  Value Drivers that Impact Bids –Operations & control –PDP/Upside ratio –Confidence in upside potential –Reserve life and location of property –Technical/Mechanical risks –Strategic implications –Cost of capital Beauty is in the Eye of the Beholder

10. 2003 - How to Buy  Technical Advantage – real or perceived  Use Strip Price Deck as Far Out as Possible  Lower Return Hurdles for Strategic Acquisitions  Identify Upside & Pay Aggressively For It  Have a Cost Reduction or Production Enhancement Plan & be Prepared to Implement  Hustle (know the market & build a reputation) Question: How are they doing it?

11. NYMEX Historical Pricing Source: NYMEX.com

12. NYMEX Gas Price Decks NYMEX/Bank Blend (Forecast) Henry Hub Posted

13. NYMEX Oil Price Decks NYMEX/Bank Blend (Forecast) Koch Oil WTI Posted

14. Comparison 2003 Results $$/BOE$/BOEPD $14.2 Billion$7.16$33,001 *includes P2EA deals & publicly released deals Negotiated Transactions* $$/BOE$/BOEPD $266 Million*$7.65$28,543 *WI sales only on minimum bid properties Auction (total sales of $455 Million in 2003)

15. Petroleum Place Energy Advisors Negotiated Transactions Asset & Stock Sales 2003 Results

16. Overton Field, E. Texas Cotton Valley Assets sale pending Crutcher-Tufts Resources, LP Belridge Field, San Joaquin Basin California visit www.p2ea.com for details Oklahoma CBM Package Cherokee Basin sale pending E. Texas & N. Louisiana offers received March 9th Gulf Coast Assets available late April Moran Resources Company Liberty County, Texas offers due April 29 th Current Transactions Oklahoma sale pending Kansas Properties offers due April 29 th Rockies, Kansas & E. Texas available early May Rocky Mountain Assets available early May

17. TOTAL PROVED $/BOE (6:01) CF MULT (MOS) $/BOEPD (10:1) TOTAL SALES ($MM) PERMIAN$5.5252$29,210$1,290.2 OFFSHORE$7.9011$12,327$1,634.0 MID-CONT$7.0570$34,777$1,334.3 GULF COAST$7.85--$51,732$482.1 E TX / N LA$7.8354$45,141$340.2 ROCKIES$5.5428$25,800$301.0 S TEXAS$9.1873$21,841$608.2 SAN JUAN$4.2573$39,027$304.5 OTHER$7.4555$50,996$7,896.3 *Includes P2EA deals and publicly released deals 2003 Negotiated Results*

18. The Oil & Gas Asset Clearinghouse Auction Transactions 2003-2004 Results

19. Average Live Auction Fiscal Year SALE SIZE ($MM)

20. Average Auction Lot Price ($000)

21. Auction Results – Minimum Bids OIL GAS NON-OP OP RI WI TOTAL 11 9 10 12 4 11 10 NPV (BFIT) (%) 6.82 9.44 7.90 7.37 16.14 7.65 8.34 PDP $/BOE (6:01) 46 54 49 47 77 48 51 CF MULT (MOS) 20,789 43,191 31,113 25,899 72,979 28,528 31,542 $/BOEPD (10:1) 107,668 206,466 145,651 119,208 49,275 264,859 314,134 TOTAL SALES ($M) 2003

22. Basin Results – Minimum Bids NPV (BFIT) (%) PDP $/BOE (6:01) CF MULT (MOS) $/BOEPD (10:1) TOTAL SALES ($M) PERMIAN126.675225,17577,730 OFFSHORE524.942728,8842,750 MID-CONT79.496442,74499,724 GULF COAST179.123124,38836,187 E TEXAS69.456340,94542,696 ROCKIES78.146330,50630,802 S TEXAS1310.353430,2049,018 SAN JUAN146.315439,4063,450 OTHER166.903622,60011,779 2003

23. What to Expect in 2004  Continued Strong Commodity Prices –Companies enjoying cash flow –Marginal properties are currently economic  Significant Capital Available for Acquisitions  Buy First Then Sell  Right Opportunities are Scarce & Competitive  Private Companies are Cashing In  New Divestiture Lists are Being Developed

24. Houston Region Kevin Townsend – Client Relations Manager Denna Arias – Client Relations Representative Phone: 281-873-4600 Fax: 281-873-0055 Oklahoma Region Bob Dawson – Client Relations Manager Phone: 405-728-2353 Fax: 405-728-2398 Denver Region John Klee – Client Relations Manager Phone: 303-263-1946 Fax: 303-744-8220 Dallas Region Kirk Pogoloff – Client Relations Manager Phone: 214-696-6400 Fax: 214-696-6470 Houston Headquarters Kenneth R. Olive, Jr. - CEO Rob Bilger – President Dane Isenhower - VP & General Manager Steve Fitzgerald – VP Business Development Phone: 281-873-4603 Fax: 832-601-7668 Houston Headquarters Kenneth R. Olive, Jr. – President & CEO Dan Sodersten – Sr. VP - Technical Resources Ron Barnes – Sr. VP - Business Development Phone: 281-873-4600 Fax: 281-873-0055 Contact Us