TCW Asset Management Company MOGA Capital Markets Update

1. TCW Asset Management CompanyMOGA Capital Markets Update Patrick Hickey Senior Vice President May 2006

2. Table of Contents • Market Perspectives • Mezzanine Market Overview • TCW Overview • Conclusions

3. Energy Product Prices

4. Energy Capital Markets

5. Trends in the E&P Markets • After a period of debt reduction and share buybacks, E&P companies are spending more of free cash flow on drilling • Public and private valuations are up • Volumetric Production Payments are back • Substantial private capital flowing into industry • Public venture markets are active: AIM, Canadian Jrs. • Seller’s expectations are forcing buyers to bid aggressively for assets • “Land rush” in unconventional gas plays • Equity markets are rewarding predictable and visible reserve and production growth • Clear winners: “Resource Plays”

6. Implications….. • Market environment has created a windfall for many • Hedging is necessary to support valuations and acquisition prices • Value creation going forward likely to be based more on field enhancement/drill bit than market timing/arbitrage • Companies have been afforded the opportunity to innovate (improved completion methods) • Access to/Quality of services is key concern • Large independents re-positioning their asset profile with a focus on long-lived reserves and low risk drilling • Capital providers forced to be flexible • Non-traditional financing sources tend to “loosen” market discipline and exit when times get tough • High commodity prices can mask underlying problems – “point of caution”

7. TCW Version of Mezzanine • Broadly defined: high yield senior to preferred equity • Flexible: Not tied to a particular structure • Partner-like, long term orientation • Current pay plus kicker (royalty, warrants, cash flow participation, PIK) • Low to mid-teens rate of return: fees, coupon, kicker • Amortization provides exit; call protection • Secured by assets and/or shares • Minimal Covenants: Make bet on management team and assets • Alternative to equity

8. US - E&P Mezzanine Finance Providers 28 Players have entered the E&P Mezzanine market, only 10 remain Wells Fargo TCW Enron Macquarie Aquila Beacon Koch Petrobridge Torch Mirant RIMCO Stratum MG Laminar Cambrian Williams ENCAP Duke Constellation Deutsche Bank RBS KCS Shell Tenneco/Range Goldman Sachs Black Rock Prudential Cargill 1982 2002 2004 1984 1986 1988 1990 1994 1996 1998 2000 1992 Source: Wells Fargo

9. Oil and Gas Risk/Return Profile Return Equity 30% + 25% Pref. Equity 15% TCW Sweet Spot Mezzanine 10% VPP 6% Senior Debt Risk PDNP PROB/POSS Exploration Prospects PUD PDP Engineering Risk Geological/GeophysicalRisk TCW’s focus is on engineering and development risk, not geological and exploration risk

10. Mezzanine Debt Applications • Fills void in capital structure between equity and senior debt • Small to mid-sized companies that cannot access the public markets • Isolate assets in a separate non-recourse project financing • Accelerate development drilling program • Acquisition, monetization, or recapitalization • Reduces the amount of equity required, thereby increasing the leverage and ultimately the equity returns Mezzanine Debt is a viable alternative when designing the optimal capital structure

11. Mezzanine Debt Applications • Use of mezzanine capital can lower capital costs, increase equity returns, and increase ownership Equity & Mezzanine All in Capital Cost 10% Equity Only All in Capital Cost 14% 100% 100% Equity 30% Equity 30% Equity 30% Equity 80% Mezzanine 15% Equity 60% 60% Bank Debt 6% Bank Debt 6% • Lower Capital Costs • Higher Equity Return • Greater Ownership

12. TCW Energy & Infrastructure Group • Among leading providers of institutional capital for the energy sector in North America • Niche investor exclusively focused on energy and infrastructure sectors • 24-year track record; by far the longest in the industry • 12 funds with more than $6 billion of capital and 175 portfolio investments • Invested in 16 countries on 5 continents • 20 professionals (6 engineers) • Recent funds raised for investment: • TCW Energy Fund X - $734 million unlevered fund for mezzanine and equity investments in US, W. Europe and Australia • TCW Global Project Fund II - $700 million leveraged fund for high yield senior investments on a global basis • TCW Global Project Fund III - $1.5 billion leveraged fund for investment grade senior loans on a global basis In 2005, the TCW Energy Group invested $894 million in 27 separate transactions in 10 countries.

13. EIG Product Platform Enhanced Market Penetration Benefiting All Products Senior Debt GPF III High Yield Senior GPF II Mezzanine and Non-Control Equity Fund X & Cogen Special Situations Client JVs & Separate Accounts

14. TCW Overview • Established in 1971 • The TCW Group, Inc. is an indirect subsidiary of Société Générale, S.A. • Approximately $123 billion committed or under managementas of December 31, 2005 • Over 1,625 institutional and private clients • Staff of over 600 individuals, including over 355 professionals • Offices: TCW SG Asset Management Los Angeles Paris New York London Houston Tokyo Singapore Hong Kong

15. Conclusions • Producers have choices when choosing a capital provider • Stability and partnership orientation are key • TCW is bullish on prices long term • New pricing environment, combined with hedging, has created new opportunities • Consolidation should continue as companies utilize excess cash flow and access private equity • Market appears to have accepted new higher levels for commodity prices • Mezzanine capital will continue to be a viable alternative

16. TCW E&P Contacts Kurt Talbot 713-615-7426 Managing Director kurt.talbot@tcw.com Patrick Hickey 713-615-7410 Senior Vice President patrick.hickey@tcw.com Curt Taylor 713-615-7410 Senior Vice President curt.taylor@tcw.com