Confidential - Property of Contango Capital Management 1 NEW ENERGY OPPORTUNITIES IN THE GLOBAL ARENA 2004

Confidential - Property of Contango Capital ManageConfidential - Property of Contango Capital Managementment

11

NEW ENERGY NEW ENERGY OPPORTUNITIES IN THE OPPORTUNITIES IN THE

GLOBAL ARENAGLOBAL ARENA

NEW ENERGY NEW ENERGY OPPORTUNITIES IN THE OPPORTUNITIES IN THE

GLOBAL ARENAGLOBAL ARENA20042004

Confidential - Property of Contango Capital ManagementConfidential - Property of Contango Capital Management 22

The Energy Industry Is at a Major The Energy Industry Is at a Major Inflection Point TodayInflection Point Today

Change Change Occurring Occurring in Energy in Energy IndustryIndustry

Change Change Occurring Occurring in Energy in Energy IndustryIndustry

Environmental and

Regulatory Issues

Environmental and

Regulatory Issues

ConventionaConventional Energy l Energy

Supply and Supply and Demand Demand SituationSituation

Source: Contango Analysis

Three Three Major Major

Investment Investment ThemesThemes

Three Additional Pressures

Power Power Reliability Reliability and and Quality Quality DemandsDemands

Portable Portable Power Power

RequirementRequirementss

Industry Innovation

in Short Supply

Industry Innovation

in Short Supply

Security ConcernsSecurity

Concerns


Conventional Energy Supplies Are Peaking and Conventional Energy Supplies Are Peaking and Developing Country Energy Demand Is SoaringDeveloping Country Energy Demand Is Soaring BP estimates that at the current global growth BP estimates that at the current global growth

rate, we will need: rate, we will need:

An additional 7.25 mm bpd to meet demand in An additional 7.25 mm bpd to meet demand in 20072007

39mm bpd by 2010 with current 4.8% depletion 39mm bpd by 2010 with current 4.8% depletion raterate

Increasing gap in cost driversIncreasing gap in cost drivers

Productivity is declining rapidly in the Productivity is declining rapidly in the development and production of oil development and production of oil

Operating costs are rising faster than inflationOperating costs are rising faster than inflation

China and India alone will needChina and India alone will need

An additional 13mm bpd by 2010 at 15% per year An additional 13mm bpd by 2010 at 15% per year demand increase (Rate that Japanese demand demand increase (Rate that Japanese demand grew between 1965 and 1973) grew between 1965 and 1973)

If China and India: If China and India:

Increase their per-capita consumption to the Increase their per-capita consumption to the level of South Korea (only 60% of U.S.)level of South Korea (only 60% of U.S.)

Demand in these two countries alone reaches Demand in these two countries alone reaches 119 mm bpd of oil (50% increase over current 119 mm bpd of oil (50% increase over current global production of 80 mm bpd)global production of 80 mm bpd)

Global energy consumption profile shows Global energy consumption profile shows rapid migration to electricityrapid migration to electricity

BP estimates that at the current global growth BP estimates that at the current global growth rate, we will need: rate, we will need:

An additional 7.25 mm bpd to meet demand in An additional 7.25 mm bpd to meet demand in 20072007

39mm bpd by 2010 with current 4.8% depletion 39mm bpd by 2010 with current 4.8% depletion raterate

Increasing gap in cost driversIncreasing gap in cost drivers

Productivity is declining rapidly in the Productivity is declining rapidly in the development and production of oil development and production of oil

Operating costs are rising faster than inflationOperating costs are rising faster than inflation

China and India alone will needChina and India alone will need

An additional 13mm bpd by 2010 at 15% per year An additional 13mm bpd by 2010 at 15% per year demand increase (Rate that Japanese demand demand increase (Rate that Japanese demand grew between 1965 and 1973) grew between 1965 and 1973)

If China and India: If China and India:

Increase their per-capita consumption to the Increase their per-capita consumption to the level of South Korea (only 60% of U.S.)level of South Korea (only 60% of U.S.)

Demand in these two countries alone reaches Demand in these two countries alone reaches 119 mm bpd of oil (50% increase over current 119 mm bpd of oil (50% increase over current global production of 80 mm bpd)global production of 80 mm bpd)

Global energy consumption profile shows Global energy consumption profile shows rapid migration to electricityrapid migration to electricity

Crude Oil Refiner Acquisition Cost – EIA Graph & Data

Estimated World Oil Demand and Current Supply

35.0

45.0

55.0

65.0

75.0

85.0

95.0

105.0

YearM

illio

ns o

f Bar

rels

of O

il P

er

Day

US/OECD IEA trend rate1.7% per year with 5%error

Current Supply Decliningat Current Depletion Rateof 4.8% Per Annum

Estimated World Oil Demand and Current Supply

35.0

45.0

55.0

65.0

75.0

85.0

95.0

105.0

YearM

illio

ns o

f Bar

rels

of O

il P

er

Day

US/OECD IEA trend rate1.7% per year with 5%error

Current Supply Decliningat Current Depletion Rateof 4.8% Per Annum

By 2014 By 2014 Production Gap Production Gap is approx 50mm is approx 50mm

bpdbpd

Source: Barron’s and British Petroleum

44

The World is Dependent on aThe World is Dependent on aSmall Number of Oil Fields andSmall Number of Oil Fields and

Those Fields Are Peaking in ProductionThose Fields Are Peaking in Production

13,900(20%)

14 Fields In Excess Of 500,000 B/D

4,100(6%)

12 Fields Between300,000 – 500,000 B/D

6,400(9%)

29 Fields Between 200,000 – 300,000 B/D

7,900(12%)

61 Fields Between 100,000 – 200,000 B/D

36,200(53%)

4,000 +Other Fields

000 Bbls/Day(% Of

World Total)

Sources: Simmons & Company International & Hubbert’s Peak

Dr. King Hubbert predicted in 1956 that U.S. oil Dr. King Hubbert predicted in 1956 that U.S. oil production would peak in about 1970 and production would peak in about 1970 and decline thereafterdecline thereafter

U.S. peaked in 1972 at 11, 185, 000 bpdU.S. peaked in 1972 at 11, 185, 000 bpd

Geologists using same methods estimate Geologists using same methods estimate world production peak between 2000 and 2012world production peak between 2000 and 2012

Dr. King Hubbert predicted in 1956 that U.S. oil Dr. King Hubbert predicted in 1956 that U.S. oil production would peak in about 1970 and production would peak in about 1970 and decline thereafterdecline thereafter

U.S. peaked in 1972 at 11, 185, 000 bpdU.S. peaked in 1972 at 11, 185, 000 bpd

Geologists using same methods estimate Geologists using same methods estimate world production peak between 2000 and 2012world production peak between 2000 and 2012


Business is moving toward an electronic mediumBusiness is moving toward an electronic medium

Consumers around the world are demanding a Consumers around the world are demanding a higher level of reliability as a part of a higher higher level of reliability as a part of a higher standard of livingstandard of living

Business is moving toward an electronic mediumBusiness is moving toward an electronic medium

Consumers around the world are demanding a Consumers around the world are demanding a higher level of reliability as a part of a higher higher level of reliability as a part of a higher standard of livingstandard of living

Energy Is OxygenEnergy Is OxygenFor the Digital EconomyFor the Digital Economy

Power Density in the “Digital Power Density in the “Digital Economy” is as much as 12X of that of Economy” is as much as 12X of that of the Industrial Equipment Economythe Industrial Equipment Economy

Damage from Power Surges estimated Damage from Power Surges estimated to be over $100B across all “Digital to be over $100B across all “Digital Economy Sectors”Economy Sectors”

Power Density in the “Digital Power Density in the “Digital Economy” is as much as 12X of that of Economy” is as much as 12X of that of the Industrial Equipment Economythe Industrial Equipment Economy

Damage from Power Surges estimated Damage from Power Surges estimated to be over $100B across all “Digital to be over $100B across all “Digital Economy Sectors”Economy Sectors” 0 50 100 150 200 250

Semiconductor C leanroom

Semiconductor Fabs

Web Hosting

E-Tailers

Online Brokers

Search Engines

ISP 's

Internet Data Centers

"Digital Economy" Power Density (W/sq.ft)

0 50 100 150 200 250

Semiconductor C leanroom

Semiconductor Fabs

Web Hosting

E-Tailers

Online Brokers

Search Engines

ISP 's

Internet Data Centers

"Digital Economy" Power Density (W/sq.ft)

Software Glitches

23%

I/C & Card Failure

15%

Power Outages

16%

Cabling3%

Heat9%

Operator Error7%

Router Failure12%

Disk Drive Failure15%

Software Glitches

23%

I/C & Card Failure

15%

Power Outages

16%

Cabling3%

Heat9%

Operator Error7%

Router Failure12%

Disk Drive Failure15%

Source: Strategic Research Corporation

Causes of Network DowntimeCauses of Network DowntimeCauses of Network DowntimeCauses of Network Downtime

Source: EPRI, Stephens Inc.; Jupiter Research


Lack of Investment Is ChokingLack of Investment Is ChokingElectric Distribution SystemElectric Distribution System

Investment of $56 Billion in Investment of $56 Billion in Transmission Assets needed between Transmission Assets needed between 2000 – 2010 in order to keep the Grid in 2000 – 2010 in order to keep the Grid in current conditioncurrent condition

In 1999 U.S. Utilities spent over $3 billion In 1999 U.S. Utilities spent over $3 billion to operate and maintain transmission to operate and maintain transmission lineslines

Transmission Bottlenecks cost Transmission Bottlenecks cost consumers at least $500 million per consumers at least $500 million per summer, according to the FERCsummer, according to the FERC

Bottom Line – Electric Utilities have and Bottom Line – Electric Utilities have and will continue to under-invest in Electric will continue to under-invest in Electric Grid InfrastructureGrid Infrastructure

Investment of $56 Billion in Investment of $56 Billion in Transmission Assets needed between Transmission Assets needed between 2000 – 2010 in order to keep the Grid in 2000 – 2010 in order to keep the Grid in current conditioncurrent condition

In 1999 U.S. Utilities spent over $3 billion In 1999 U.S. Utilities spent over $3 billion to operate and maintain transmission to operate and maintain transmission lineslines

Transmission Bottlenecks cost Transmission Bottlenecks cost consumers at least $500 million per consumers at least $500 million per summer, according to the FERCsummer, according to the FERC

Bottom Line – Electric Utilities have and Bottom Line – Electric Utilities have and will continue to under-invest in Electric will continue to under-invest in Electric Grid InfrastructureGrid Infrastructure

Source: Eric Hirst, PhD, EEI

Average Annual Growth Rates in US Transmission Capacityand Summer Peak Demand for 1979-1999

and Projections for 1999 - 2009

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

1979 - 1989 1989 - 1999 1999 - 2009

Time Period

Gro

wth

Ra

te (

%/y

ea

r)

Transmission(GW-miles)

Summer Peak(GW)

Average Annual Growth Rates in US Transmission Capacityand Summer Peak Demand for 1979-1999

and Projections for 1999 - 2009

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

1979 - 1989 1989 - 1999 1999 - 2009

Time Period

Gro

wth

Ra

te (

%/y

ea

r)

Transmission(GW-miles)

Summer Peak(GW)


Portable Electronics GrowthPortable Electronics GrowthIs Threatened byIs Threatened by

Inadequate Power SourcesInadequate Power Sources

“True Polymer”“True Polymer”

1950 1980 1990 2000 2007Year Introduced

Ene

rgy

Den

sity

Saf

ety

Issu

es

Ope

ratin

g R

ange

Breakthrough technologyBreakthrough technology

NiCd: wide operating range but limited energy densityNiCd: wide operating range but limited energy density

NiMH: enhanced energy density but less operating rangeNiMH: enhanced energy density but less operating range

Li-Ion: excellent performance but complex safetyLi-Ion: excellent performance but complex safety

Li-Ion Polymer: thinness & cost (?)Li-Ion Polymer: thinness & cost (?)

Li Metal Li Metal

Zn-Air Zn-Air

Fuel Cells ? ?

Increasing Energy Density

Evolved technologyEvolved technology

“True Polymer”“True Polymer”

1950 1980 1990 2000 2007Year Introduced

Ene

rgy

Den

sity

Saf

ety

Issu

es

Ope

ratin

g R

ange

Breakthrough technologyBreakthrough technology

NiCd: wide operating range but limited energy densityNiCd: wide operating range but limited energy density

NiMH: enhanced energy density but less operating rangeNiMH: enhanced energy density but less operating range

Li-Ion: excellent performance but complex safetyLi-Ion: excellent performance but complex safety

Li-Ion Polymer: thinness & cost (?)Li-Ion Polymer: thinness & cost (?)

Li Metal Li Metal

Zn-Air Zn-Air

Fuel Cells ? ?

Increasing Energy Density

Evolved technologyEvolved technology

• Energy density requirements for powering portable electronic devices are not being metEnergy density requirements for powering portable electronic devices are not being met

• Lithium Ion is being challenged due to safety issuesLithium Ion is being challenged due to safety issues

• Technology is advancing at 5% or less in energy density improvementTechnology is advancing at 5% or less in energy density improvement

• Huge breakthrough in battery technology has not occurred for over 10 yearsHuge breakthrough in battery technology has not occurred for over 10 years

• Lack of long runtime, light, and sizable power source is limiting portable electronic Lack of long runtime, light, and sizable power source is limiting portable electronic innovation (Intel’s investment in fuel cells is an example of attempt to solve problem) innovation (Intel’s investment in fuel cells is an example of attempt to solve problem)

• Energy density requirements for powering portable electronic devices are not being metEnergy density requirements for powering portable electronic devices are not being met

• Lithium Ion is being challenged due to safety issuesLithium Ion is being challenged due to safety issues

• Technology is advancing at 5% or less in energy density improvementTechnology is advancing at 5% or less in energy density improvement

• Huge breakthrough in battery technology has not occurred for over 10 yearsHuge breakthrough in battery technology has not occurred for over 10 years

• Lack of long runtime, light, and sizable power source is limiting portable electronic Lack of long runtime, light, and sizable power source is limiting portable electronic innovation (Intel’s investment in fuel cells is an example of attempt to solve problem) innovation (Intel’s investment in fuel cells is an example of attempt to solve problem)

History of Portable Power Sources

Source: Motorola

Growth in Portable Devices


Geopolitical Security Concerns Are Geopolitical Security Concerns Are Squeezing Energy PricesSqueezing Energy Prices

The volatile Middle East will garner an The volatile Middle East will garner an increasing share of the global hydrocarbon increasing share of the global hydrocarbon market since OPEC controls 77% of the market since OPEC controls 77% of the global oil reserves and currently global oil reserves and currently comprises only 32% of global productioncomprises only 32% of global production

The nature of interdependency and lack of The nature of interdependency and lack of investment in both the U.S. and Western investment in both the U.S. and Western European electric and natural gas European electric and natural gas infrastructure raise considerable system infrastructure raise considerable system failure risksfailure risks

Modern militaries require reliable power Modern militaries require reliable power sources for weaponry, computers, and sources for weaponry, computers, and other equipment, especially when crossing other equipment, especially when crossing large, sparsely populated distances at high large, sparsely populated distances at high speeds (a la the run-up to Baghdad in speeds (a la the run-up to Baghdad in 2003)2003)

Internal political strife in Saudi ArabiaInternal political strife in Saudi Arabia

Arafat’s death Arafat’s death

The volatile Middle East will garner an The volatile Middle East will garner an increasing share of the global hydrocarbon increasing share of the global hydrocarbon market since OPEC controls 77% of the market since OPEC controls 77% of the global oil reserves and currently global oil reserves and currently comprises only 32% of global productioncomprises only 32% of global production

The nature of interdependency and lack of The nature of interdependency and lack of investment in both the U.S. and Western investment in both the U.S. and Western European electric and natural gas European electric and natural gas infrastructure raise considerable system infrastructure raise considerable system failure risksfailure risks

Modern militaries require reliable power Modern militaries require reliable power sources for weaponry, computers, and sources for weaponry, computers, and other equipment, especially when crossing other equipment, especially when crossing large, sparsely populated distances at high large, sparsely populated distances at high speeds (a la the run-up to Baghdad in speeds (a la the run-up to Baghdad in 2003)2003)

Internal political strife in Saudi ArabiaInternal political strife in Saudi Arabia

Arafat’s death Arafat’s death

Sources: EIA & World Sites Map Collection website


Environmental and Other Regulatory Issues Environmental and Other Regulatory Issues Are Creating Pressures and OpportunitiesAre Creating Pressures and Opportunities

In the Global Energy Markets In the Global Energy Markets

Air and water quality are major issues with Air and water quality are major issues with increasingly global importanceincreasingly global importance

The pressure from U.S. and Global The pressure from U.S. and Global environmentalists continues to escalateenvironmentalists continues to escalate

Concern over global warming is more Concern over global warming is more likely to continue over the next 10 yearslikely to continue over the next 10 years

Declines of oil and natural gas reserves Declines of oil and natural gas reserves place greater emphasis on dirtier fuels to place greater emphasis on dirtier fuels to meet demand (i.e. coal)meet demand (i.e. coal)

Any U.S. energy legislation will have an Any U.S. energy legislation will have an impact on the current capital structure in impact on the current capital structure in the energy marketthe energy market

Re-election of Bush portends passage of Re-election of Bush portends passage of an Energy Bill in 2005an Energy Bill in 2005

Air and water quality are major issues with Air and water quality are major issues with increasingly global importanceincreasingly global importance

The pressure from U.S. and Global The pressure from U.S. and Global environmentalists continues to escalateenvironmentalists continues to escalate

Concern over global warming is more Concern over global warming is more likely to continue over the next 10 yearslikely to continue over the next 10 years

Declines of oil and natural gas reserves Declines of oil and natural gas reserves place greater emphasis on dirtier fuels to place greater emphasis on dirtier fuels to meet demand (i.e. coal)meet demand (i.e. coal)

Any U.S. energy legislation will have an Any U.S. energy legislation will have an impact on the current capital structure in impact on the current capital structure in the energy marketthe energy market

Re-election of Bush portends passage of Re-election of Bush portends passage of an Energy Bill in 2005an Energy Bill in 2005

Atmospheric Concentrations of Carbon Dioxide Since 1750


Energy Industry RequiresEnergy Industry RequiresCharting a New Investment ApproachCharting a New Investment Approach

We drilled our way out of the last energy crisis; We drilled our way out of the last energy crisis; no major oil and gas fields to be found nowno major oil and gas fields to be found now

This crisis needs to be answered from the This crisis needs to be answered from the demand sidedemand side

Example – New technologies to squeeze more Example – New technologies to squeeze more kilowatt hours out of a molecule of gaskilowatt hours out of a molecule of gas

Reliability and Application historically drive Reliability and Application historically drive change in the energy industrychange in the energy industry

Conventional Approach – the Upstream, Conventional Approach – the Upstream, Midstream, Downstream sectorsMidstream, Downstream sectors


Why Fuel Cells?Why Fuel Cells?

Fuel cells act as a battery replacement, Fuel cells act as a battery replacement, often at a much lower weight and higher often at a much lower weight and higher power density than existing technologypower density than existing technology

Fuel cells act as an efficient generation Fuel cells act as an efficient generation technology, solving the problem of Btu technology, solving the problem of Btu costcost

Fuel cells provide a reliable power Fuel cells provide a reliable power source that can work with and permit source that can work with and permit wider use of other forms of renewable wider use of other forms of renewable energy, such as solar and windenergy, such as solar and wind

Fuel cells and hydrogen are efficient at Fuel cells and hydrogen are efficient at converting natural gas into electricity converting natural gas into electricity Rechargeable, Lead Acid Batteries

(Gel Cells)Jadoo SuREII

Hydride CartridgeRechargeable, Lead Acid Batteries

(Gel Cells)Jadoo SuREII

Hydride Cartridge

AdvantagesAdvantagesHydrogen storage or production Hydrogen storage or production

technologiestechnologies WeightWeight CostCost Amount of energy or runtime Amount of energy or runtime

for the fuel cellfor the fuel cellConversion deviceConversion device

CostCost LifeLife Ambient operating temperatureAmbient operating temperature

Choke PointsChoke Points


First Markets, First ProfitsFirst Markets, First Profits Mid-wattage (20 to 300 Watts) portable marketsMid-wattage (20 to 300 Watts) portable markets

Pro video camera powerPro video camera power Covert camera powerCovert camera power Military solutionsMilitary solutions Medical systemsMedical systems Pipeline monitoring stationsPipeline monitoring stations

Back-up PowerBack-up Power Telecom back-upTelecom back-up Data center back-upData center back-up Remote powering of homes / commercial sitesRemote powering of homes / commercial sites Developing country powerDeveloping country power


Where Will Hydrogen Take Us?Where Will Hydrogen Take Us?

Hydrogen is a storage mediumHydrogen is a storage medium Fuel cells will serve as batteries first, then migrate to Fuel cells will serve as batteries first, then migrate to

generationgeneration Fuel cells must come down in cost and up in reliability Fuel cells must come down in cost and up in reliability

and lifeand life Fuel cells will eventually decrease the amount of Fuel cells will eventually decrease the amount of

hydrocarbons needed per capita through:hydrocarbons needed per capita through: Ability to store wind and solar energy on site and bring reliability Ability to store wind and solar energy on site and bring reliability

to renewable energyto renewable energy Higher efficiencyHigher efficiency


Funding Issues forFunding Issues forAlternative Energy CompaniesAlternative Energy Companies

The Collapse of Energy Trading and Merchant CompaniesThe Collapse of Energy Trading and Merchant Companies

20002000EnronEnronReliantReliantDynegyDynegyAquillaAquillaWilliamsWilliamsEl PasoEl Paso

20042004

EnronEnron

ReliantReliant

DynegyDynegy

AquillaAquilla

WilliamsWilliams

El PasoEl Paso

The Source of The Source of over $1 billionover $1 billion in Energy Venture Funding no longer in Energy Venture Funding no longer exists in the market.exists in the market.The Source of The Source of over $1 billionover $1 billion in Energy Venture Funding no longer in Energy Venture Funding no longer exists in the market.exists in the market.

• Sudden collapse of the U.S. and European Sudden collapse of the U.S. and European Energy Merchant sector reduced a significant Energy Merchant sector reduced a significant source of innovation and energy venture source of innovation and energy venture investmentsinvestments

• Energy ideas and entrepreneurs are now Energy ideas and entrepreneurs are now scattered across the landscape. No clear scattered across the landscape. No clear funding alternativesfunding alternatives

• Erosion of venture investment domain Erosion of venture investment domain expertise has created a barrier to venture expertise has created a barrier to venture funding. Lack of expertise slows the velocity funding. Lack of expertise slows the velocity of venture capital of venture capital

• 1970’s status quo revisited 1970’s status quo revisited –– Slow-moving oil Slow-moving oil majors, utilities, and financial institutions majors, utilities, and financial institutions again dominate the energy businessagain dominate the energy business

• Sudden collapse of the U.S. and European Sudden collapse of the U.S. and European Energy Merchant sector reduced a significant Energy Merchant sector reduced a significant source of innovation and energy venture source of innovation and energy venture investmentsinvestments

• Energy ideas and entrepreneurs are now Energy ideas and entrepreneurs are now scattered across the landscape. No clear scattered across the landscape. No clear funding alternativesfunding alternatives

• Erosion of venture investment domain Erosion of venture investment domain expertise has created a barrier to venture expertise has created a barrier to venture funding. Lack of expertise slows the velocity funding. Lack of expertise slows the velocity of venture capital of venture capital

• 1970’s status quo revisited 1970’s status quo revisited –– Slow-moving oil Slow-moving oil majors, utilities, and financial institutions majors, utilities, and financial institutions again dominate the energy businessagain dominate the energy business


Contango CapitalContango Capital divides the industry into: divides the industry into: Reliability / Portable Power SolutionsReliability / Portable Power Solutions Cost of the Btu, synthetic or real Cost of the Btu, synthetic or real

hydrocarbon Btuhydrocarbon Btu

Contango CapitalContango Capital is looking for technologies that solve the is looking for technologies that solve the

energy storage issue, provide a cheap and storable energy energy storage issue, provide a cheap and storable energy

source, and/or reduce the cost of hydrocarbons.source, and/or reduce the cost of hydrocarbons.

The Solution:The Solution:Formation of Funds Focusing on Alternative Energy TechnologyFormation of Funds Focusing on Alternative Energy Technology


Contango Capital’s Investment StrategyContango Capital’s Investment Strategy

ContangoContango CapitalCapital invests in companies invests in companies that are:that are:

Three years or fewer from Three years or fewer from commercialization (low rate commercialization (low rate production product launch, production product launch, revenues)revenues)

Targeted to specific, Targeted to specific, identified marketsidentified markets

Focused on enterprise Focused on enterprise solutions, not incumbent solutions, not incumbent utility solutionsutility solutions

Positioned to deliver Positioned to deliver multiple value propositionsmultiple value propositions

ContangoContango CapitalCapital invests in companies invests in companies that are:that are:

Three years or fewer from Three years or fewer from commercialization (low rate commercialization (low rate production product launch, production product launch, revenues)revenues)

Targeted to specific, Targeted to specific, identified marketsidentified markets

Focused on enterprise Focused on enterprise solutions, not incumbent solutions, not incumbent utility solutionsutility solutions

Positioned to deliver Positioned to deliver multiple value propositionsmultiple value propositions

ContangoContango CapitalCapital focuses on achieving liquidity focuses on achieving liquidity events for investors through:events for investors through:

1.1. Purchase by larger companyPurchase by larger company

2.2. Investment going public – Current public market Investment going public – Current public market valuations average 15X revenues for the energy valuations average 15X revenues for the energy technology industrytechnology industry

ContangoContango CapitalCapital focuses on achieving liquidity focuses on achieving liquidity events for investors through:events for investors through:

1.1. Purchase by larger companyPurchase by larger company

2.2. Investment going public – Current public market Investment going public – Current public market valuations average 15X revenues for the energy valuations average 15X revenues for the energy technology industrytechnology industry


DisclaimerDisclaimer

This material should not be construed as an offer to sell This material should not be construed as an offer to sell or a solicitation as an offer to sell any security in any or a solicitation as an offer to sell any security in any jurisdiction where such an offer or solicitation would be jurisdiction where such an offer or solicitation would be illegal. We are not soliciting any action based on this illegal. We are not soliciting any action based on this material. This material is for general information material. This material is for general information purposes only. It does not constitute a personal purposes only. It does not constitute a personal recommendation or take into account the particular recommendation or take into account the particular investment objectives, financial solutions, or needs of investment objectives, financial solutions, or needs of individual investors. Before acting on any advice or individual investors. Before acting on any advice or recommendation in this material, individuals should recommendation in this material, individuals should consider whether it is suitable for their particular consider whether it is suitable for their particular circumstances and, if necessary, seek professional circumstances and, if necessary, seek professional advice.advice.

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Confidential - Property of Contango Capital Management 1 NEW ENERGY OPPORTUNITIES IN THE GLOBAL ARENA 2004