Corporate Characteristics Historically, the Company has been successful in growing through the drill bit and strategic acquisitions Strong historical drilling success rate 92% since 1999 Consummated reserve and leasehold…
A History of Consistent Growth (1 ) Reserves 26% CAGR Production 32% CAGR Cash Flow 82% CAGR Stock price 20% CAGR (1) Begins in 1999 3
2010 Operations Overview Capital expenditures budget expected to double in 2010 to approximate cash flow 65% of 2010 direct capex allocated to long-life assets Large operated position allows for control of timing of investments…
Our Properties PQ operated Non-operated Tulsa Arkoma Arkoma Basin Basin PQ Office Locations East East Texas Texas (1) As of March 31, 2010 Pro forma for JV 78% Reserves (1) 78% Reserves (1) Lafayette 22% Reserves (1)…
Our Portfolio UNCONVENTIONAL PLAYS Three separate Three separate basins all EAST TX ARKOMA basins all core poised for growth to PQ Gulf Coast South Offshore Louisiana GOM CONVENTIONAL PLAYS Unrisked Drilling Estimated 1P…
Arkoma Basin Approximately 45,000(1) net acres in the Woodford Shale Approximately 18,000 net acres in the Fayetteville Shale Current production approximately 41,000 Mcf/day net (1) Woodford JV partner has the right to earn…
Woodford Shale Recent Activity Current net production of approximately 35 MMcf/d Woodford JV closed May 2010 Three Woodford wells completed in June with average IP of 6.8 MMcf/d 15 gross operated Woodford wells budgeted for…
Woodford JV Transaction Summary 234.6MM total transaction value 60MM up front payment 28MM in future payments 14MM at November 2011 14MM dependent upon achievement of certain performance metrics 146.6MM drilling carry where JV…
Woodford JV Transaction Benefits Further strengthens the Companys liquidity position through current and future cash payments Drilling carry allows for significant acceleration of development plans while keeping capital expenditures…
Gross Woodford Production (PQ Operated) Drilling Drilling Operations Operations 70,000 Suspended Mcf/d Suspended 60,000 Drilling Operations First Rig Second Rig Resumed 50,000 40,000 30,000 20,000 Third Rig 10,000 0 Feb07…
3D Seismic Based Drilling PQ 27 PQ 9 6000 ne Limesto ka anuc Wap 7000 e Shal dford Woo 8000 IP 12.5 MMcfe IP 2.9 MMcfe Section Section Section Line Line Line 9000 3D Seismic Profile 12
Woodford Decline Curves (1) Source: Simmons & Company 13
IRR Woodford Horizontal Well Economics /Mcf Capital (M) Assumptions: Price* 4,000 5,000 6,000 IP Rate 5.0 MMcfd 4 14.3% 7.3% 3.0% IRR % /Mcf EUR 4.6 Bcf 6 46.7% 31.4% 21.9% Well Cost - 4.0 to 6.0 MM 8 81.2% 58.4%…
Woodford Shale PQ Delivers Top Max Monthly Rate Horizontal Woodford Shale Completions PQ WOODFORD PROGRAM PQ delivered highest maximum monthly initial Max Monthly Gas Rate, Mcfd 4,500 production rate of any company 4,000 15%…
Fayetteville Shale Approximately 18,000 net acres Current production approximately 6,000 Mcf/day net 3% of 2010 capital budget allocated to Fayetteville 17
Fayetteville Shale - Upside Leverage Ticker Fayetteville Acres Acres/EV (1) CHK HK SWN SWN 857,000 54.4 Stone PQ 18,000 29.4 XTO PQ HK 157,000 16.7 Van Buren Pope SWN CHK 415,000 15.3 HK Cleburne CHK XTO 380,000 10.7 (1)…
East Texas Anchored by SE Carthage field: 23,900 net acres and 1Q10 avg daily production of 10.1 MMcf/d Horizontal Cotton Valley program: two wells planned for the second half of 2010 (1st well expected spud in late July) 7% of…
East Texas - Haynesville/Bossier Upside PQ CARTHAGE 23,900 NET AC. Source: RBC Capital Markets 20
Near-Term Gulf Coast Drilling Inventory Focus near term capital on low cost recompletion opportunities, low risk development projects and select high impact drilling prospects 35% of 2010 capex budget allocated to GOM/GC basin…
2009 Strategy & Results Focus for 2009 was building liquidity through reduction of Capex 12/31/08 12/31/09 Capex (mm) 358 59 Production (Bcfe) 33.8 34.2 Reserves (Bcfe) 185 179 Revolver Debt (mm) 130 29 Debt/Proved Mcfe 1.29…
Arkoma Basin Strong Growth Metrics G R CA % 52 Includes Woodford and Fayetteville 23
Summary of Diversification Efforts th r ow G 0 % 16 h owt G r 7% 15 * Using the SECs previous reporting methodology, proved reserves would have been 202.2 Bcfe (194% growth; year end 2009 prices of 5.79 per mcf and…
Comparative Valuation P/2010E CF P/2011E CF Resource Peer Group Multiple(1) Multiple(1) Brigham Exploration 19.1 9.0 Carrizo Oil & Gas 5.9 3.8 Chesapeake Energy 3.7 3.5 Clayton Williams 3.1 2.2 Continental Resources 12.6 9.6…
Focused Effort to Fund Drilling with Cash Flow /mcfe MM 88 million liquidity build (1) Net debt is calculated as debt less working capital (2) Discretionary cash flow excludes proceeds from the sale of gathering…
Hedging Positions Target of hedging 40%-50% of annual production approximately 40% of the 2010E gas production is hedged (based on mid-point of production guidance) Gas hedging positions (costless collars) 28
Summary and Outlook Capex budget expected to double in 2010 Woodford drilling budget up 200%+ from 2009 Assets in place to provide reserve and production growth Operational and cost improvements in the Woodford Expected to have a 3…
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