IPAA Private Capital Conference Stroud Energy, Inc.

1. IPAA Private Capital ConferenceStroud Energy, Inc. Patrick J. NoyesJanuary 2007

2. Early History • Formed in 1985 with the purchase of the Stroud Prue Sand Unit in Oklahoma. In 1995, purchased the Apache Canyon field (coal bed methane) in Raton Basin of Colorado. • In 2000, relocated company to Ft. Worth, hired new management team and refocused efforts on horizontal drilling program in Austin Chalk • Entered into a $50MM mezzanine facility with Mirant (subsequently increased to $100MM) to finance Austin Chalk development • During 2002, Board decided to replace management team in order to take the company in a new direction • Mr. Noyes joined as President and CEO in February 2003 with a two point strategy for growth: • Restructure the capital • Diversify the asset base

3. New Management Team • At 2002YE Stroud had: • Total Proved Reserves – 72.9 Bcfe (99+% Austin Chalk) • Daily Production – 12.5 MMcfe per day (net to Stroud) • $64MM of Mezzanine Debt • Management developed a new strategy to help diversify and grow the company: • Continue successful drilling in Austin Chalk • Diversify into new areas where management has expertise (Barnett Shale and East Texas) through reserve and acreage acquisitions • Apply advanced drilling and completions technology • Generate large inventory of drilling locations • In June 2003, Stroud purchased the mezzanine facility from Hydrocarbon Capital, largely financed by a Wells Fargo credit facility • Stroud was fully drawn on our two facilities with Wells Fargo – no “dry powder” • In order to fund growth capital for expansion into new areas, the Board decided to bring in a major private equity partner

4. Private Capital Provider (EnCap Investments) • In January 2004, EnCap Energy Capital Fund IV invested $27 million in the form of redeemable preferred stock • EnCap’s equity facilitated the expansion into new areas and accelerated the drilling program • Stroud chose EnCap Investments for several reasons: • Capacity to pursue large acquisitions • High-level strategic/corporate guidance • Risk management • Source of opportunities / deal flow • Ultimately partnership with EnCap allowed management to achieve its objectives • The EnCap/Stroud Partnership was helpful from a risk management standpoint but supportive of management recommendations on drilling and acquisitions

5. Stroud Picture (2002) • Highly leveraged with Mirant mezzanine facility • Board decided to replace the management team and move in a new direction

6. Stroud Picture (2002-2003) • In 2003, Stroud experienced downward revisions to reserves in the Austin Chalk, specifically Washington, Burleson and Fayette Counties • As a result, management redirected capital resources to Grimes County (Austin Chalk) and East Texas

7. Stroud Picture (2002-2004) • In 2004, Stroud drilled some of the most productive Austin Chalk wells in company history • The 2004 values include a $35MM acquisition of Barnett Shale properties with 23.5 Bcfe of proved reserves (the transaction closed in early 2005)

8. Stroud Picture (2002-2005) • In 2005, Stroud raised $173MM through a 144A private placement • Proceeds were used to pay down bank debt, give liquidity to shareholders and general corporate needs • The 2005 values include a $61MM acquisition of Barnett Shale properties with 27.9 Bcfe of proved reserves (the transaction closed in early 2006)

9. Core Areas Of Operations East Texas (16 Bcfe) Harrison, Panola and Rusk Counties Ft. Worth Basin/Barnett Shale (70 Bcfe) Denton, Johnson, Parker and Tarrant Counties Pro Forma As of 12/31/05: Total Proved Reserves: 159 Bcfe Natural Gas: 96% Pre-tax PV-10: $479 MM R/P Index: (1) 14.7 Operated: 99% Core Areas (Pro forma as of 12/31/05): Gross Developed Acres: 41,059 (34,981 net) Gross Undeveloped Acres: 37,446 (29,065 net) Drilling Locations: 204 (65 PUDs) Central Gulf Coast (72 Bcfe) Brazos, Burleson, Fayette, Grimes, Lee and Washington Counties • Stroud statistic calculated as total proved reserves of 159.4 Bcfe / 2005 production of 10.8 Bcfe.

10. Austin Chalk Properties Key Statistics Core Operations – Central Gulf Coast • Production is in the Giddings Field from the Austin Chalk formation • Interest in 50 gross wells (41.6 net), with average working interest of 83% • 41 total drilling locations (25 proved undeveloped drilling locations) • ~2.4 Bcfe average reserves per completion – Grimes County • Average drilling & completion cost of $3.9MM – Grimes County • Developed acres: 30,162 gross (26,365 net) • Undeveloped acres: 13,400 gross (11,253 net) Brazos Burleson Grimes Lee Washington Fayette

11. Barnett Shale Properties Key Statistics Core Operations – Ft. Worth Basin • Largest natural gas field in Texas • Advanced drilling and completion techniques resulted in increases in productivity and reserves • Interest in 50 gross wells (41.1 net), with average working interest of 82% • 84 total drilling locations (24 proved undeveloped drilling locations) • ~2.2 Bcfe average reserves per horizontal completion • Avg. horizontal drilling & completion cost of $2.5MM • Developed acres: 5,561 gross (4,788 net) • Undeveloped acres: 14,405 gross (11,618 net) Denton Parker Tarrant Johnson

12. East Texas Properties Key Statistics Core Operations – East Texas • Cotton Valley Sand formation was primary target in East Texas Basin • Interest in 20 gross wells (13.5 net), with average working interest of 68% • 79 total drilling locations (16 proved undeveloped drilling locations) • ~1.3 Bcfe average reserves per completion • Average drilling & completion cost of $1.4MM • Developed acres: 4,694 gross (3,640 net) • Undeveloped acres: 2,290 gross (1,837 net) Harrison Rusk Panola

13. Reserve Base Overview Total Proved Reserves (Bcfe) Reserves by Area Reserve Breakdown

14. Total Production (MMcfe/d) (1) Production Profile • Estimate was management projection.

15. Operational Performance • Stroud’s accomplishments under new management: • Drilled 51 out of 51 successful wells (through December 31, 2005) • Production increased 140% from 12.5 MMcfe/d in 2002 to 29.7 MMcfe/d in 2005 • Reserves grew 120% from 72.9 Bcfe in 2002 to 159.4 Bcfe in 2005 • Developed 204 drilling locations and 65 PUDs on properties • Acquired over 51 Bcfe of proved reserves and $104MM of PV10% value in the Barnett Shale

16. 144A Offering (Results) Issuer: Stroud Energy, Inc. Offering Type: 144A/Reg D Private Placement Offering Shares Offered: 4.7 MM primary, 2.7 MM secondary Shares Sold 6.3 MM primary, 4.6 MM secondary Offering Size: $111,000,000 Actual Size: $173,000,000 Offering Price: $14.00 - $16.00 Actual Price: $16.00 Pro Forma Market Capitalization: $220 million (mid-range) Actual PF Market Capitalization: $260 million (top of range) Book Running Placement Agent: Raymond James Co-Placement Agents: A.G. Edwards, Petrie Parkman

17. Range Resources Merger • After the closing of the 144A offering, but prior to the initial public offering, Range approached Stroud regarding a potential merger • Range’s offer (cash and/or stock) valued Stroud’s stock at $350MM (~$20.50/share) • Stroud’s 144A shareholders, who purchased stock for $16.00 per share 9 months earlier, realized a 28% holding period return on their investment • Stroud’s Barnett Shale assets were a strategic fit for Range, increasing its Barnett Shale acreage to approximately 46,000 acres (gross) and adding 182 drilling locations • With Stroud’s additional leasehold, Range planned to add 3 more rigs in the Barnett Shale

18. Equity Returns • When EnCap entered the picture in January 2004, the common equity of the Stroud shareholders was valued at $35MM • At the 144A offering in September 2005, these shareholders received $68MM from the sale of secondary shares and retained 5.4 million shares of common stock • Coincident with the Range merger, the original Stroud shareholders exchanged their 5.4 million shares for cash and/or stock worth $111MM

19. Summary • Successfully implemented initial strategy • 100% drilling success rate in all areas • Built meaningful positions in three attractive core areas of operation • Enhanced reserve recoveries by implementing advanced technologies • Created large inventory of drilling prospects with demonstrable success • EnCap investment facilitated expansion into Barnett Shale and East Texas and accelerated drilling program • Risk management and capital markets expertise invaluable to growth and ultimate exit • Increased value and improved liquidity for shareholders through 144A offering • Exited in opportune market, creating significant value for shareholders and management

20. IPAA Private Capital ConferenceStroud Energy, Inc. Patrick J. NoyesJanuary 2007