1. Date: February 5, 2014 Casey Whelan Natural Gas: A Star Performer in the Past, Great Potential for the Future

2. Natural Gas: Physical Overview

3. Natural Gas: Financial Overview

4. Lower Natural Gas Prices have Stimulated Demand Industrial – i.e. Fertilizer industry which left the country over last twenty years is returning (over $10B in new investment) Electric Generation -- Retired electric generators replaced with natural gas generation (headwinds: renewables and low load growth) Export Markets – Three LNG projects approved … plus Mexico

5. Future Demand - Industrial As of 2013 –170 New Gas Consuming Projects Online –0.7 Bcf/d of demand capacity By 2020 –400 New projects proposed or scheduled –6 Bcf/d of demand capacity 4.2 Bcf/d is petro-chemical –Gas to Liquids (GTL) –Methanol –Fertilizer –Not all capacity is expected to materialize –Best estimate is ~ 2 Bcf/d growth by 2018

6. Future Demand - Power

7. Future Demand - Exports Capacity expanding from 5.4 Bcf/d at present to 9.6 Bcf/d by 2018 –3.2 Bcf/d of expansion will come from Texas Conservative estimate of Mexican demand growth is 2.7 Bcf/d –17 MW of new power demand accounts for 1.4 Bcf/d of this estimate Source: Bentek

8. Wide spread between natural gas and liquid fuel prices creates opportunities CNG fueling for on-road trucks –5x growth in engine production in 2014 LNG fueling for on-road trucks, off-road trucks (mining), rail and marine –Drilling Rigs increasingly have dual fuel capability GTL opportunities with natural gas feedstock –Lots of talk ….

9. CNG and LNG will displace liquid fuels. Fuel choices will be driven by economics and environmental considerations. LNG/CNG Demand Growth

10. Quantifying Structural Demand Growth Demand Source Industrial Power Generation Exports 2015 1.5 Bcf/d2 Bcf/d3 Bcf 2018 2.25 Bcf/d3.5 Bcf/d6-10 Bcf/d

13. Historical and Future Prices Average Settlements –2000-2008: $6.07 –2009-2013: $3.82 –2014-2018: $4.12

14. Natural Gas Drilling Economics

15. Natural Gas: Feeding the Beast Driver Increasing Decline Rates Increasing Production Production in non typical locations Consequence More drilling required to replace production More investment required in drilling and mid/down stream activities New mid/down stream investment required

16. Summary/Observations Supply has expanded dramatically, driving prices down Demand has and will continue to respond “low” prices and “high” spreads Prices remain low and stable in the future. Expectation is that future demand can be met with available resources Supply side will need large and increasing investments to replace declines and meet increasing demands It’s a good time to be in the Natural Gas business