1. Recommendation: Buy Chevron and Occidental Petroleum (CVX & OXY)

2. Integrated: Chevron 2 nd largest US traded oil company by market cap. $198B in 2010 revenue, $19B net income 2.763B in net oil equivalent production 58,000 employees and 4,000 service station employees

3. Chevron: Strong Financials Ticker Mkt. Cap. Div. Yield 5Yr. Div. Growth FCF Yield WACC ROIC P/BP/E 3Yr Avg ROE FCF Mgn 3Yr Avg Total Debt/Total Equity Sum (Lower is better) XOM360B4 th 1 st 7 th 6 th 1 st 2 nd 30 CVX190B2 nd 3 rd 2 nd 6 th 2 nd 1 st 23 COP88B1 st 2 nd 5 th 4 th 6 th 3 rd 8 th 34 HES18B6 th 7 th 6 th 7 th 1 st 3 rd 5 th 6 th 47

4. Chevron: Strong Financials MeasureCVXTop 4 Mkt. Cap. Avg. Dividend Yield3.38%2.73% 5Yr Net Div. Growth9.11%7.41% FCF Yield7.11%4.48% WACC ROIC14.64%10.34% P/B1.621.53 P/E8.248.87 P/E 5yr Avg. minus Current P/E 1.092.20 3Yr Avg. ROE19.53%13.73% FCF Mgn. 3Yr Avg.3.272.74 Total Debt/Total Equity9.89%20.56%

5. CVX: Dividend History

6. CVX: Replacement Ratio

7. CVX SWOT Analysis Strengths  Very large, well established  Moderate Beta of 0.98  Strong financials; good track record in most aspects Weaknesses  2010 Replacement ratio < 1, but 10 year avg. = 1.01  Price correlated to Brent while Brent-WTI spread at highs Opportunities  Reserve growth through acreage acquisitions  Oil consumption increases abroad Threats  Tax increases  Environmental concerns  Global economic weakness

8. Prev Close:94.66 1y Target Est:108 52wk Range:80.41 - 109.94 Avg Vol (3m):10,954,200 Market Cap:189.6B P/E (ttm):8.33 EPS (ttm):11.45 Div & Yield:3.12 (3.38%) Forward P/E: 7.24 CVX Investment Information

9. E & P: Occidental Petroleum Largest US traded E&P by market cap: 61.57B, nearly 2x as large as next largest Anadarko at 32.8B Highest dividend yield (2.45%) in top 6 US E&P, 2 nd in top 16 3.36B barrels of oil equivalent (BOE) proven reserves as of 2010 end. 19B in 2010 net sales, 4.53B net income Has outperformed S&P last 12 years (though currently trailing S&P YTD)

10. Occidental: Strong Financials MeasureOXYTop 4 Mkt. Cap. Avg. Dividend Yield2.45%1.24% 5Yr Net Div. Growth18.299.15 FCF Yield2.52%0.00% WACC ROIC12.63%9% P/B1.751.39 P/E10.4914.14 P/E 5yr Avg. minus Current P/E 4.987.45 3Yr Avg. ROE15.11%7.49% FCF Mgn. 3Yr Avg.23.478.54 Total Debt/Total Equity12.08%34.43%

11. Occidental: Reserve Growth

12. Occidental: Dividend Growth

13. Occidental: Sales Growth

14. Occidental: Correlation to Oil (Timing)

15. SWOT Analysis Strengths  Largest US E&P  Strong reserve, sales, and dividend growth  Strong financials compared to peers Weaknesses  New CEO in 2011 (unproven but promoted from COO) Opportunities  May be currently underpriced  Continuing oil shale acquisitions and international plays Threats  Tax increases  Environmental concerns  Global economic weakness

16. Prev Close:75.72 1y Target Est:113 52wk Range:66.36 - 117.89 Avg Vol (3m):5,976,330 Market Cap:61.54B P/E (ttm):10.49 EPS (ttm):7.08 Div & Yield:1.84 (2.60%) Forward P/E: 8.47 OXY Investment Information

17. Investment Theses Chevron is a large cap integrated financially outperforming its peers. A respectable dividend with a history of growth protects against the downside while a moderate beta and solid correlation to oil prices should cause it to also do well in an up market. Occidental Petroleum is a large cap E&P with international production diversification and is a financial standout among its peers. A beta slightly over one paired with an acceptable dividend give it an upside and downside protection. Now appears to be a good time to buy considering the tight correlation to oil and the discount to said correlation.

18. Portfolio Placement / Recommendation $/SH.SH. #TOTAL $WT.BETA WT. BETA STD. DEV. WT. STD. TTM DIV. $ DIV. YIELD WT. YIELD DESCRIPTION AMLP 15.335053550.12760.800.100.020.0030.990.060.01 Pipeline ETF CVX 94.6110094610.22540.770.170.060.0133.000.030.01 Oil Integrated FEN 26.1620052320.12470.920.110.050.0061.850.070.01 Pipeline CEF OXY 78.5610078560.18721.020.190.110.0211.760.020.00 Oil E&P PXJ 17.4740069880.16651.340.220.100.0160.080.00 Oil Services Fund VPU 70.7410070740.16860.610.100.030.0052.690.040.01 US Utility Fund TOTAL $41,966 $10.36 WT. AVG. BETA0.91 STD. DEV. 0.064 YIELD3.56%

19.  BUY 100 shares of CVX at Limit Price of $95.00 ($9,500, 2% of portfolio)  Holding Period/Exit Strategy: 2+ years; reassess thesis at least every three months.  BUY 100 shares of OXY at Limit Price of $80.00 ($8,000, 1.75% of portfolio)  Holding Period/Exit Strategy: 2+ years; reassess thesis at least every three months. Portfolio Placement / Recommendation

20.  Sector : Energy  Projected Holdings: AMLP, FEN, CVX, PXJ, OXY  Target Sector Allocation: 8.54%, ~$38,860  Projected Sector Allocation: 7.62%, ~$34,660  Remaining Allocation: 1.92%, $4,200 Portfolio Placement / Recommendation