1. Dave Pursell dpursell@TPHco.com 713-333-2962 *Disclosures begin on page 43 2016 Crude Oil Outlook – “Strong, like Bull” September 2015

2. Re-affirm our $80+/bbl oil price in 2H16 □ US supply growth moderates in 2015 and declines in 2016 □ Global Demand: only needs to be OK…but currently better than OK! OPEC □ Wildcard □ Current supply increasing from Saudi and Iraq □ Iran remains uncertain Long Term to 2025 □ Rest of non-OPEC? □ Well Spacing / Inventory depth? □ Terminal decline rates? 2 Crude Oil Market

3. 3 But the NYMEX Futures Say…….!!!! “ I can hardly remember how I built my bankroll, but I can't stop thinking of how I lost it” Mike McDermott, Rounders Source: Bloomberg, TPH & Co.

4. 4 Oil S/D Model “Are you suggesting coconuts migrate?” Monty Python and the Holy Grail Source: IEA, TPH & Co.

5. 5 OECD Inventories NAM Non-NAM Source: IEA, TPH & Co.

6. 6 OECD Inventories Source: IEA, TPH & Co.

7. 7 US Rig Count Decline is Fast and Furious… Source: RigData

8. 8 Change in Rig Count by Operator Since Q4 Peak Source: RigData, TPH & Co. Note: Private Operators -523 rigs (-65%) since Q4 peak

9. 9 US Oil Production Annual Growth Source: DrillingInfo, Company Filings, TPH Research US production declines are coming

10. 10 TPH Oil Supply Model Source: DrillingInfo, Company Filings, TPH Research US production growth is required in 2017+

11. 11 Rig Assumptions by Basin Source: TPH & Co.

12. 12 US Oil Production – Declines are Happening Less volatile onshore oil production declined in April, May and June’15…an average of 83kbopd per month Source: EIA, TPH & Co.

13. 13 US Oil Production – Declines are Happening Less volatile onshore oil production declined in April, May and June’15…an average of 83kbopd per month Source: EIA, TPH & Co.

14. 14 US Oil Production – Forecast Thru 2016 The recent decline rate results in almost 850kbopd y/y decline. Source: EIA, TPH & Co.

15. 15 US Oil Production – Forecast Thru 2016 The recent decline rate results in almost 850kbopd y/y decline. Source: EIA, TPH & Co.

16. 16 US Oil Production – Forecast Thru 2016 The recent decline rate results in almost 850kbopd y/y decline. Source: EIA, TPH & Co.

17. 17 US Oil Production – Forecast Thru 2016 The recent decline rate results in almost 850kbopd y/y decline. Source: EIA, TPH & Co.

18. 18 US Crude Production and Oil-Directed Rig Count Source: BHI, EIA, TPH & Co. Recent weekly/monthly data suggests growth may be slowing

19. 19 Non-OPEC Oil Production Growth – Ain’t Happening Source: IEA, TPH & Co.

20. 20 US Caused This Problem… U.S. Will Fix It U.S. is offender for global supply growth and needs to throttle back production Source: IEA, TPH & Co.

21. 21 Demand- A Tale of 2 Cities Source: IEA, TPH & Co.

22. 22 Global Demand – Wait What? Source: IEA, TPH & Co.

23. Asia Demand “That's mathematics, son! You can argue with me, but you can't argue with figures!” Foghorn Leghorn Source: Infield, TPH & Co.

24. Europe and Asia Crack Spreads “I'm just here for the gasoline.” Max…Mad Max Source: Bloomberg, TPH & Co.

25. 25 OPEC Production History “I can hardly remember how I built my bankroll, but I can't stop thinking of how I lost it.” Mike McDermott….Rounders Source: IEA, TPH & Co.

26. 26 Iran: Production History and Outlook Forecasting pre-sanctions production declines to the present, Iran should have 3.3mmbopd total productive capacity…an incremental 500kbopd higher than current 2.8mmbopd Source: IEA, TPH & Co.

27. 27 Saudi Arabia: Production History and Outlook Saudi scenarios: They signaled a decline once internal summer demand wanes. Saudi could certainly keep ramping but we doubt they would go above 11mmbpd as they want to keep 1.5mmbpd excess capacity to fill a global supply disruption. 1.Saudi increased supply to 9.2mmbpd in mid-08 and decreased to 7.8mmbopd in early ’09 2.Supply increased in early ’11 due to tightening markets and then the onset of Arab Spring 3.Saudi recently increased supply to 10.3+mmbpd. Source: IEA, TPH & Co.

28. Cumulative OPEC Excess Capacity In The Early 80s! 28 0 5 10 15 20 198019811982198319841985 Excess Capacity, mmbpd Excess Capacity Components During Early1980's Excess Capacity Non-OPEC Growth Demand Contraction 1985-more than half of excess capacity was driven by non-OPEC supply growth... 1985 – more than half of excess capacity was driven by non-OPEC supply growth… Source: IEA, TPH & Co.

29. Sweet Spots –Drilling Inventory in Tier 1? □ Drainage Area  Wall Street Math vs. Reality?  Well spacing = potential interference = higher terminal decline rates Steeper Terminal Decline Rate □ Does not impact NPV but does impact  reserves/DD&A and  long term production outlook Fracture Optimization □ Are we in the 4 th or 8 th Inning? □ Have we reached the practical limits to lateral length and sand volumes? □ Re-Frac’s – How big is the opportunity? Service Costs □ Should re-inflate in 2016+ Non-OPEC □ Cuts to exploration capex should materially affect deepwater growth in the long term. 29 Things That Makes Us Say…Huh?

30. It’s Happening Now! 30 January 2015 February 2015 March 2015

31. Appendix 31

32. Dry gas rig count drop to accelerate declines in legacy basins. Since Aug. 2014, rig count down from 101 to 63 and may drop further over the coming months. 1000 rigs dropping out of the associated gas market to drive volume declines by Q3’15. Northeast going ex-growth for the majority of 2015 and we see downside bias to production estimates on shut-in volumes. NGL collapse may cause cash flow shortfall, further pressuring rig count in the Marcellus and Utica. Canadian E&Ps have significantly cut back growth capex (TPHe -40% y/y). On reduced capital plans, plays like the Montney may struggle to offset conventional declines, meaning less gas being sent south. Coal to Gas switching (TPHe 3Bcf/d at $2.75/mcf) to provide a floor for commodity near term as fundamentals correct over the year. Structural demand changes kicking in, with over 2Bcf/d of potential growth in 2015 driven by industrial demand, coal fleet retirement, Mexican gas exports and LNG facility start-ups late in the year. Why Are We Bullish Natural Gas into 2016? Source: Drillinginfo, Company Filings, TPH & Co. 32

33. 33 Nat Gas Market ~Balanced YTD 2015 Source: EIA, TPH & Co.

34. 34 Gas Demand OK….Supply THE Outstanding Question EIA, LCI Energy, TPH & Co Which is Right?

35. 35 TPH Gas Production Forecast > 2016 Ex-Growth Response to 2012 gas prices plus GOM declines Back to the races, though Northeast growth May be limited by associated gas production Associated gas masked all but 500mmcfd of “other” declines 2012- 2014 allowing NE growth to standout Associated gas goes ex- growth…NE production growth needed to offset declines Source: EIA, DrillingInfo, TPH & Co.

36. 36 Leading Edge Data Suggests Gas Production Declining Source: EIA, LCI Energy, TPH & Co.

37. 37 In the Background Coal Prices Moving Down Coal prices down ~25% YTD…moves a $3.75/mmbtu gas break-even to >$3/mmbtu

38. 38 Onshore Natural Gas Production Growth (EIA-914) Source: EIA, TPH & Co.

39. 39 Natural Gas Production (EIA-914) Source: EIA, TPH & Co.

40. 40 TPH Gas Supply Model Source: Drillinginfo, Company Filings, TPH & Co.

41. LPG Exports? Liquids rich drilling has driven >400 MBPD of propane production growth over the last 4 years Supply growth has steadily outpaced demand driving pricing erosion with C 3 cut by a third as a percent of WTI 41

42. Distance, Economics have cut off NE & Canada from Belvieu 42 Source: Company Presentations, Public Filings, TPH Estimates, EIA

43. 43