mruszczy: NEED LOGOS!!

1. mruszczy: NEED LOGOS!! INDEPENDENT PRODUCERS ASSOCIATION OF AMERICA 2002 M&A Outlook January 9, 2002

2. Presenters • Thomas E. Hassen Chairman and Managing Director Global Energy Group (New York) (212) 325-6247 thomas.hassen@csfb.com • Timothy E. Perry Director Global Energy Group (Houston) (713) 890-1415 timothy.perry@csfb.com

3. Agenda • Historic M&A Activity • Drivers of M&A Activity • 2002 Outlook

4. Historic M&A Activity

5. The Industry is Changing…1980 Source: Factset Database and Bloomberg.

6. The Industry is Changing…1990 Source: Factset Database and Bloomberg.

7. The Industry is Changing…1995 Source: Factset Database and Bloomberg.

8. The Industry is Changing…Present Source: Factset Database and Bloomberg.

9. M&A Transaction Values Source: JS Herold.

10. 2001 Corporate Transactions Source: JS Herold. Note: Includes announced 2001 domestic M&A transactions over $200 million in total transaction value.

11. 2001 Asset Transactions Source: JS Herold. Note: Includes announced 2001 domestic M&A transactions over $200 million in total transaction value.

12. Transaction Prices Paid Source: JS Herold.

13. Drivers of M&A Activity

14. Consolidation Drivers • Production Growth • Increased Scale • Liquidity • Lower Cost of Capital

15. Production Growth Source: CSFB Equity Research.

16. Increased Scale • International and deepwater projects require: • long lead times • massive capital • Ability to share intellectual talent across a broad profile of projects • Capital allocation enhanced • can choose among distinct projects depending on risk • commodity mix determines allocation

17. Liquidity Market Capitalization of Companies on the NYSE Source: JS Herold and Bloomberg.

18. Liquidity E&P Companies with Market Capitalization of over $50 Million Source: JS Herold and Bloomberg.

19. Lower Cost of Capital Source: CSFB.

20. 2002 Outlook

21. Price to NAV Analysis Source: CSFB Equity Research.

22. Asset Divestiture Outlook • Several companies have publicly announced or are quietly pursuing upstream asset sales • Energy trading companies selling E&P assets • “Super Independents” divesting of non-core assets following large cash acquisitions • Majors divesting of non-core assets following elimination of pooling requirements • Some of the larger publicly announced sales include: • Devon • El Paso • Burlington

23. Corporate Transaction Outlook • Corporate E&P consolidation will continue at a rapid pace • Significant commodity price volatility may cause some slowdown in transactions • Confidence will return as prices stabilize and rise • Most corporate transactions will be for stock until share prices improve • Management and Boards will be less interested in cash deals • Stock mergers allow sellers to participate in the industry’s recovery • Cross-border transactions in Canada will be less important • Many key Canadian companies have already been purchased • Canadian stocks are no longer trading at a discount • Unsolicited offer activity is likely

24. mruszczy: NEED LOGOS!! INDEPENDENT PRODUCERS ASSOCIATION OF AMERICA 2002 M&A Outlook January 9, 2002