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United States Exploration Steven D. Durrett, CEO

United States Exploration Steven D. Durrett, CEO. Energy. Overview of U.S. Exploration. U.S. Exploration was a publicly-traded E&P company owning long-lived natural gas reserves with significant development drilling upside, with over 400,000 undeveloped acres.

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United States Exploration Steven D. Durrett, CEO

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  1. United States ExplorationSteven D. Durrett, CEO

  2. Energy Overview of U.S. Exploration U.S. Exploration was a publicly-traded E&P company owning long-lived natural gas reserves with significant development drilling upside, with over 400,000 undeveloped acres. U.S. Exploration was defensively managed by its previous managers with fewer than 200 company operated wells and minor non-operated interests in another 200 wells U.S. Exploration’s focus was on exploitation of the Wattenberg Field with expansion opportunities located on other acreage in the Denver – Julesburg Basin Initial acquisition was $57 million (including fees), financed with $32 million of equity from Greenhill Capital Partners and Lime Rock Partners along with $25 million of Senior Debt from Wells Fargo. In July 2004, the equity partners funded an additional $6 million to support the growth strategy Purchase price was 4.4x EBITDA, $0.69 / Mcfe and 64% of PV-10

  3. Energy U.S. Exploration: Development Plan • Development Plan • Began in-fill drilling and re-completion programs designed to complete over 100 new wells per year • Drilled or re-completed approximately 300 new wells with 98% success • Since taking control of U.S. Exploration in January 2004, management team (10 employees) grew net production at a 47% CAGR and run-rate EBITDA at a 154% CAGR • The Company proved-up over 2,000 additional Proved and Probable well locations and developed an additional 4,000 unbooked Probable and Possible well locations • In March 2006, we closed the sale of U.S. Exploration to Noble Energy for total consideration of $411 million yielding an equity ROI of 7x and an IRR of 155%

  4. Energy U.S. Exploration: Monthly Production (Mmcfe / Month) 47% CAGR

  5. Energy U.S. Exploration: EBITDA by Quarter ($ millions) 154% CAGR

  6. Energy U.S. Exploration: Per Unit Costs Pre-Acquisition Post-Acquisition $1.09 (1) $0.99 $0.80 Notes: (1) Other expenses consist of non-recurring transition expenses in 2004 and bonuses paid in 2005.

  7. Energy U.S. Exploration: Value Creation ($ in millions) -$60

  8. Relief from expensive public regulatory burdens Drop below the radar to allow for restructuring and reinvention without micro-scrutiny Build your business and establish a track record in relative anonymity Management compensation structure Why Private Equity?

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