1. JANUS PREMIER GLOBAL VALUE FUND PRANEETH RAJ SINGH, VIDYASRI VELLOO, BAYAN ISMAEEL

2. Introduction Oil & Gas Industry is NOT like other industries Subject to Global Politics and Foreign Policy Affects the fiscal health and budgets of many states (OPEC) Analysis of industry is not straightforward JANUS GLOBAL PREMIER VALUE FUND2

3. Factors to consider Saudi Arabia’s predatory strategy Breakeven pricing for traditional drilling and fracking Possibility of change in oil price exceeding 50% Iran’s entry into global markets Demand factors JANUS GLOBAL PREMIER VALUE FUND 3

4. Saudi Arabia & OPEC Saudi Arabia – most influential in production decisions and in affecting prices Has maintained production levels to force out shale oil producers in the US Costs of this strategy: a.Severely depleting Saudi’s cash reserves b.Budget deficit for 2015 and predicted deficit for 2016 c.How long can they sustain this? JANUS GLOBAL PREMIER VALUE FUND 4

5. Breakeven Breakeven Analysis is not appropriate here OPEC governments reliant on oil, US government is not Costs vary based on geology, technology and volumes Producers have shelved new expansion and development projects Therefore, better to look at lifting costs to estimate minimum operational price JANUS GLOBAL PREMIER VALUE FUND 5

6. Lifting Costs Lifting costs = Productions cots Maintenance and operation of equipment required to being oil and gas to the surface Rigs can stay operational as long as price exceeds lifting costs 1.US Shale - $15 - $25 2.US Combined - $14.80 3.Saudi Arabia Traditional - $5.40 JANUS GLOBAL PREMIER VALUE FUND 6 Source: CNN Money and Rystad Energy

7. Change in Prices for 2016 US Energy Information Administration estimates an average of $38/bbl for 2016 and $50/bbl for 2017 Goldman Sachs estimates potential low of $20/bbl for 2016 Unlikely due to strain on OPEC government budgets and tight margins on shale oil Brent futures for delivery in Dec 2016 currently priced just below $40 JANUS GLOBAL PREMIER VALUE FUND 7

8. Firm Analysis – Segment Revenue Mix JANUS GLOBAL PREMIER VALUE FUND 8

9. Firm Analysis – Strategy Evaluation Conoco Phillips Pros 1.Operations around the world – helps maintain lower total average lifting costs 2.Insulation from sudden change in policies by governments 3.Cut capital expenditure and operation costs 4.Started exporting oil from Eagle Ford shale play 5.Cut operations in Canada where lifting cost is high ($22.40/barrel) Cons 1.Paying out dividends despite declared losses in 2015 JANUS GLOBAL PREMIER VALUE FUND 9

10. Firm Analysis – Strategy Evaluation Antero Resources Pros 1.Strong hedging program 2.Good midstream transportation portfolio 3.Controls other midstream services as well Cons 1.Unfinished wells may not be useable in the future 2.Unable to diversify risk – both regional and from over reliance on Natural Gas revenues JANUS GLOBAL PREMIER VALUE FUND 10

11. Investment Attractiveness Antero Resources No room for growth given future price levels Stock is overvalued ($20.85 Book Value, $25 avg share price) Rapidly increasing debt the last 2-3 years Revenues may be stable, but does not mean capital growth JANUS GLOBAL PREMIER VALUE FUND 11

12. Investment Attractiveness ConocoPhillips Enjoys lower average lifting costs ($16.85/bbl before discontinuing Canada operations) Liquidated non-essential holdings and assets to improve cash position Less dependent on one resource for revenues New revenue stream added from US exports Share price at or below Book Value per share (Book Value $35.81, Share Price avg. $35) JANUS GLOBAL PREMIER VALUE FUND 12

13. Recommendation Invest in ConocoPhillips shares Caveats: 1.Target price: $32 - $33 2.Stop loss price: $28 - $29 3.Lock In Period: 5 years minimum 4.Invest only 5% of Fund Value 5.Monitor long term demand trends to re-evaluate during rebalancing exercises JANUS GLOBAL PREMIER VALUE FUND 13

14. Questions? JANUS PREMIER GLOBAL VALUE FUND