1. Energy Capital: Will Wall Street Be There For Energy Financings Next Year? Raymond James Energy Group Energy Capital: Will Wall Street Be There For Energy Financings Next Year? Raymond James Energy Group Marshall Adkins Marshall.Adkins@RaymondJames.com Raymond James Oilservice Group (800) 945-6275 June 2004

2. Will “The Street” Be There?  2003 was the biggest equity offering year in two decades  The equity window is still open  M&A activity (mostly sales by majors) is driving capital demand  Oil & gas prices will dictate future capital availability 2

3. E&P High Yield Offerings Driven by Rates 3

4. 2003 Record For E&P Equity Offerings 4

5. 2003 E&P Equity Offering Performance Has Been Excellent 5

6. E&P Equity Capital Raised vs. Average Natural Gas Prices 6

7. E&P Equity Capital Raised vs. Average Oil Prices 7

8. Energy Prices Will Drive Wall Street Capital Availability  Long-term secular up-trend is intact  Look for a late summer gas price squeeze  Oil fundamentals are solid –More upside than downside  Is this a 1970’s re-run? 8

9. We Are In A Long-Term Secular Upswing (Higher Highs, Higher Lows) 9

10. U.S. Rig Fleet Size Shows Long-Term Secular Moves 10

11. Drilling Success Rates Are Up 11

12. New Drilling Techniques Are Here To Stay 12

13. New Areas Are Now Accessible 13

14. But, We Are Drilling Deeper 14

15. Searching For Smaller Reserves 15

16. Which is Driving Decline Rates Higher 16

17. How Will More Rigs Affect Production? 17

18. Today’s U.S. Gas Production Is Replay Of 1970’s Oil Production 18

19. Q1 Natural Gas Production Still Down 19

20. The Gas Market Is Working! (Approaching 4 Bcf/day less gas vs. last year) 20

21. What Happens This Summer? 2003 Injections 2,450 Bcf - Supply Down 2% (1 Bcf/day) - 215 Bcf - Economy/Ind. Demand (1 Bcf/day) - 215 Bcf - Weather* ??? (Normal) 0 Bcf - Fuel Switching ??? 0 Bcf - Electric Consumption ??? 0 Bcf 2004 Injections 2,020 Bcf April Beginning Storage 1,000 Bcf October Ending Storage 3,020 Bcf * Weather impact: +/- 1/2 Bcf/day per 1% change in temperature 21

22. U.S. Gas Conclusion 22  Falling supply will continue to drive prices higher  Look for a mid-summer squeeze  Oil prices will set gas price range –Divide oil price by 5 ½ for the midpoint –Gas prices should fluctuate $1/Mcf around the midpoint  RJ estimate: 2004 ~ $5.92/Mcf 2005 ~ $6.00/Mcf  These estimates will probably prove too low

23. Oil Market Continues To Tighten, Big Wildcards 23  Oil Inventories suggest low $30 oil prices  Nigeria/Venezuela/OPEC/Middle East wild cards  Missing Barrels: Part 2 –Larger oil demand (China, Global Economy) –Smaller oil supply (Venezuela, Russia)  Dollar weakening is having an impact  OPEC resolve is stronger at sub $30 oil

24. Our Oil Model Suggests Low $30 Oil Prices 24

25. Chinese Oil Demand Is Going Insane! 25

26. Russian Oil Production Growth Slows 26

27. OPEC Excess Capacity Is Tightening! 27

28. No Room For Error 28

29. Oil Conclusion  IEA miss-calculations have confused the market  Implied oil demand growth is huge!  Russian supply growth should slow in 2005  Oil markets should tighten in late 2004  When will we hit the wall?  OPEC wants $30+ oil prices  RJ estimates: 2004 ~ $34.36/Bbl2005 ~ $33.00/Bbl 29

30. Conclusion 30  2003 was an outstanding year for energy equity offerings  “Window” is open for energy equity deals  Strong oil and gas fundamentals should allow energy access to Wall Street’s capital

31. Disclaimer  Important Investor Disclosures.  Stock Ratings: Within our four-tiered rating system, Strong Buy means that the stock is expected to appreciate and produce a total return of at least 15% and outperform the S&P 500 over the next six months; Outperform means the stock is expected to appreciate and outperform the S&P 500 over the next 12 months; Market Perform means the stock is expected to perform generally in line with the S&P 500 over the next 12 months and is potentially a source of funds for more highly rated securities; and Underperform means the stock is expected to underperform the S&P 500 or its sector over the next six to 12 months and should be sold.  Out of approximately 519 stocks in the Raymond James coverage universe, 52% have Strong Buy or Outperform ratings, 35% are rated Market Perform and 12% are rated Underperform. Within those rating categories, 25% of the Strong Buy- or Outperform-rated companies either currently are or have been Raymond James Investment Banking clients within the past three years; 17% of the Market Perform-rated companies are or have been clients and 9% of the Underperform-rated companies are or have been clients.  Analyst Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination including the analyst’s success in rating stocks versus an industry index, support effectiveness to the retail and institutional sales forces, traders, and investment bankers, institutional research votes, as well as overall productivity and revenue generated in covered stocks.  Raymond James Relationships: Raymond James & Associates may make a market in stocks mentioned in this report and may have managed/co-managed a public/follow-on offering of these shares or otherwise provided investment banking services to companies mentioned in this report in the past three years.  RJA or its officers, employees, or affiliates may (1) currently own shares, options, rights or warrants and/or (2) execute transactions in the securities mentioned in this report that may or may not be consistent with this report's conclusions.  Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available at www.rjcapitalmarkets.com/SearchForDisclosures_main.asp. Copies of research can be obtained by contacting any Raymond James & Associates or Raymond James Financial Services office (please see www.rjf.com for office locations) or by sending a written request to the Equity Research Library, Raymond James & Associates, Inc., Tower 3, 6th Floor, 880 Carillon Parkway, St. Petersburg, FL 33716.  Additional information is available on request.This document may not be reprinted without permission. 31