2008 – Thoughts To Ponder

IPAA Private Capital Conference

January 16, 2008

Dan Pickering

2

What’s It Going To Be?

…or Uh-Oh?

Yippee!!

3

Who Is Tudor, Pickering, Holt & Co.? Energy Specialists

Research, Investment Banking, Property A&D

~ 50 Employees

Houston/Denver Offices

Our clients are:

□ Institutional Investors

□ Companies Seeking Capital

□ Companies Buying/Selling Assets

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$40

$45

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$55

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$85

$90

$95

$100

Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08

$/b

bl

Oil strip 1/14/082008 $92.162009 $88.122010 $86.45

NYMEX Current Month Oil Price

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$40

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Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08

$/b

bl

Oil strip 1/14/082008 $92.162009 $88.122010 $86.45

What If Oil Falls by $20/bbl?

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What If It Doesn’t?

$40

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Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08

$/b

bl

Oil strip 1/14/082008 $92.162009 $88.122010 $86.45

7

What If China / India Slow?Cumulative Growth In Oil

Consumption2003 - 2006

Incremental Demand ~ 5.1 mmbbls/day

125

~2,500

~2,000

660

-160-500

0

500

1,000

1,500

2,000

2,500

3,000

US Europe Rest of OECD China/India Rest of Non-OECD

kbb

ls/d

ay

China / India

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What If China / India Accelerate?

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Does Inventory Matter?450

500

550

600

650

700

750

800

850

J an-97 J an-98 J an-99 J an-00 J an-01 J an-02 J an-03 J an-04 J an-05 J an-06 J an-07 J an-08 J an-09

Oil

& K

ey p

roduct

s in

vento

ry, m

mbbls

-10

0

10

20

30

40

50

60

70

80

90

100

WTI O

il Pri

ce, $

/bbl

Inventories (Scale Inverted) Oil Price

Scarcity Gap?

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How Scary Is The World?

Iran

Venezuela

Mexico

West Africa

Iraq

Russia

Deepwater

The Unknown

11

What If The Winter Stays Cold?

2005A $8.912006A $6.732007A $6.95

Henry Hub Realized Price

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Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07

$/m

cf

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What If Gas Trades At $9/mcf?

Source: Smith Bits, TPH

U.S. Rig Count by Operator Type

0

100

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1/5/

01

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10/5

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1/5/

08

MajorLarge Public E&PSmall Public E&PPrivate E&PUtility-Owned

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What If U.S. Drilling Holds Steady?

U.S. Onshore 43.2 44.9 46.4 +1.5

U.S. Offshore 7.5 7.0 7.0 0

LNG 1.5 2.2 3.0 +0.8

Canada Imports

7.9 7.7 6.9 -0.8

Total Supply 60.1 61.8 63.3 +1.5

+2.4% y/y*All figures in bcf/day

2006 2007 2008

2008 Gas Supply Snapshot

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0

2

4

6

8

10

12

14

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 2009

bcf

/d

RasGas II-T5; 0.6bcf/d

Eq. Guinea;0.5bcf/d

Snohvit;0.6bcf/d

Bonny T-6;0.6bcf/d

QatarGas II - T4;1bcf/d

QatarGas II - T5;1bcf/d

Yemen 0.9bcf/d;Tangguh 1.0bcf/d;

RasGas III, T-6; 1.0bcf/d;NWShelf, T-5 0.5bcf/d

RasGas III, T-7 1.0bcf/d;Camisea 0.6bcf/d;

QatarGas III 1.0bcf/d;Sakhalin II 1.3bcf/d

Is There Too Much LNG?

2008E = +5.5 bcf/day2009E = +4 bcf/day

Global Supply

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What If The Credit Crunch Lingers?E&P 2008 Free Cash Flow @ $7/mcf

($1,000,000)

($500,000)

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

EO

G

SD

SW

N

NF

X

CH

K

KW

K

RR

C

GD

P

PX

P

UP

L

CR

ZO

GM

XR

AR

D

BE

XP

PL

LL

RE

XX

CX

G

XC

O

BD

E

SG

Y

XT

O

DV

N

AP

C

AP

A

E&P Companies

Fre

e C

ash

Flo

w (

$000

)

Free Cash Flow ($000)

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What About Alternative Energy?

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Elections And Energy?

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What If We Were In Another Business?!

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Inde

xed

to 1

/1/2

006

FinancialsRetail

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Conclusions

Everything Is Intertwined

You want lower oil prices!

Gas Is Global

Risk Management

Alternatives Are Real…And Small

Energy Is Still The Best Game In Town

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Put in Final Presentation Slide Here

Tudor, Pickering & Co. Securities, Inc. is a leading institutional brokerage firm focusing on energy-sector research for institutional investors. The Company, a NASD broker-dealer, develops investment ideas for our clients by actively covering the E&P and oil

service industries, while monitoring energy subsectors such as coal, nuclear, tankers and alternative energy.

In addition to research activities, Tudor, Pickering has executed share repurchases and helped energy companies raise equity capital via co-manager and syndicate positions in numerous energy offerings including CPX, HERO, WARR, BAS, XCO.

Our research is provided to institutional clients via published reports, concise emails, and through direct interaction with our highly rated analysts and unique, specialized sales force.

Tudor Pickering has 42 employees working from our main Houston office and two satellite offices in Denver, Colorado and New Orleans, Louisiana. The firm was established in February 2004 as Pickering Energy Partners and combined with Tudor Capital in

February 2007.

Contact UsHouston: 713-333-2960Denver: 303-300-1902

New Orleans: 504-371-5563

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Disclaimer

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The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part.

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