Chevron Natural Gas Implications of Threatening Weather

1. Chevron Natural Gas Implications of Threatening Weather Bob Crites Florida Gas UtilityJuly 13, 2005

2. Implications of Threatening WeatherTalking Points • What a does threatening Storm mean • Objectives and Measures to Secure platforms • What it takes to get things back up and running • Historical price effect during hurricanes • Hurricane Ivan • Tropical Storm Cindy and Hurricane Dennis • Supply side disruptions

3. Implications of Threatening WeatherWhat does a Threatening Storm Mean? • Phase declarations and evacuation/remobilization priorities • PHASE I - declared under any one of the following conditions: • Any tropical storm or hurricane within the Gulf of Mexico (defined as the over water area north and west of a line drawn from the northeast tip of the Yucatan Peninsula to Miami, Florida). • The leading edge of any tropical depression within 200 miles of any Gulf of Mexico operations. • Phase II - declared under any one of the following conditions: • A tropical storm or hurricane within the Gulf of Mexico that is forecast to directly affect Chevron GOM SBU operations. • A tropical depression, within 100 miles of Chevron GOM SBU operations, that is forecast to intensify. • Phase III - declared under any one of the following conditions: • A hurricane that represents imminent danger to GOM SBU personnel and operations. • A tropical storm that is forecast to intensify and/or represents an imminent danger to GOM SBU personnel and operations.

4. Implications of Threatening WeatherHurricane Action Plan Objectives • OBJECTIVES • Provide for the safe and timely evacuation of all personnel working for, utilizing certain services of, and/or contracted to Chevron. • Ensure that all Chevron-operated wells and facilities are secured in a way that minimizes the potential for damage to the environment. • Secure all Chevron-operated production and drilling facilities in a way that minimizes damage or loss of company property.

5. Implications of Threatening WeatherMeasures to Secure Platforms • Phase I • Communicate possible future shut-ins and shut in wells in immediate vicinity of inclement weather • Secure loose equipment and limit boat/barge traffic to critical operations • Send home personal than do not impact field operations • Ensure contact lists are updated and inventory of contractors and equipment is taken • Coordinate evacuation of all liftboats in the field • Phase II– (in addition to above) • Evacuate all personal with exception of skeletal workforce • Ensure gas sale charts are pulled at remote locations when wells are shut in • Ensure remote shut-in systems are armed through out storm event • Phase III– (in addition to I and II above) • Secure all facilities and pull all gas sale charts • Notification to all affected that Chevron is shutting in operations and a full evacuation is in effect • Make sure all personal is accounted for

6. Implications of Threatening WeatherRamp up after Hurricane Shutdown • Helicopters are dispatched to platforms/rigs and if possible drop off skeleton crew to assess the extent of damage to these facilities • Coast guard clearance is then required prior to dispatch of crew boats – clearance can take up to several weeks • Damage repair to platforms/rigs begins when coast guard has cleared the way for crews to be boated to facilities • Processing plants and pipelines are simultaneously reviewed for damage and necessary steps to begin repairs are initiated • Time frame of full ramp up is dependant on amount of damage and appropriate clearance approvals to start up repairs

8. Petronius Storm Damage“Ivan – September 2004” Backdown Buoy Tether Damaged Drill Rig Shifted Rig Quarters & Heliport Overturned Sub-Cellar Structure, Piping, E&I Damaged South Cellar Deck Equip, Structure, Piping, E&I Damaged Oil on structure, walkways

9. Petronius VK786 Petronius Storm Damage – Close Up“Ivan – September 2004”

10. Implications of Threatening Weather Hurricane Ivan GOM Impact - September 2004 Statistics • 579 platforms and 69 rigs were evacuated • By Sept 15, 2004 - normal daily oil production from region was down by 78% and natural gas production was down by 49 percent with 6 BCFD shut in from 12.3 BCFD produced In the aftermath – As of Feb 14, 2005 • 31 platforms were seriously damaged, several more destroyed • More than 10% of Gulf of Mexico production was interrupted for at least four months • Cumulative shut-in gas production 9/11/04-02/14/05 is 173 BCF which is equivalent to 3.871% of yearly production of gas in GOM which is 4.45 TCF • 1.19% (12.3 BCFD) of daily gas production and 7.42% (1.7 million BOPD) of daily oil production in GOM remained shut in Data Source: www.MMS.gov

11. Implications of Threatening WeatherTropical Storm Cindy – Hurricane Dennis July 2005 Statistics As of July 11, 2005 • 43.8% of manned platforms and 64.2% of rigs have been evacuated • Shut-in gas production is equivalent to 62.4% of daily gas production in GOM currently equivalent to 10 BCFPD • Shut-in oil production is equivalent to 96.2 % of daily gas production in GOM currently equivalent to 1.5 million BOPD • Cumulative shut-in gas production is 18.12 BCF to date which is 0.5% of the yearly production of gas in the GOM Data Source: www.MMS.gov

12. Implications of Threatening WeatherHurricane Ivan GOM Impact - September 2004 Data Source: www.MMS.gov

13. Implications of Threatening WeatherHurricane Ivan GOM Impact - September 2004 Data Source: www.MMS.gov

14. Implications of Threatening WeatherHistorical Price ImpactHurricane Ivan - September 2004 Data Source: Platts Gas Daily

15. Implications of Threatening WeatherHistorical Price ImpactTropical Storm Cindy – July 2005 Data Source: Platts

16. Summary Chevron Natural Gas (CNG) commitment to core values are reflected in the: 2004 Mastio and Company’s Purchaser Satisfaction and Customer Value Study • Ranked No 1 in “integrity of supplier” • Ranked No 1 as the most likely to be recommended as a supplier.