Michael Cosgrove

1. This trading "BOOM" is the real deal Michael Cosgrove CEO - The Amerex Group of Companies

2. I shall not today attempt further to define the kinds of material I understand to be embraced . . . but I know it when I see it. 1964 – Justice Potter Stewart

5. 13.35% in 1980 10.51% in 1974 Interest rate chart Source: (www.federalreserve.gov)

6. Gasoline Prices 1919 - 2005 $2.27 in 2005 Long term gasoline chart $1.38 in 1981 $0.63 in 1978 $0.37 in 1973 Source: (www.eia.doe.gov)

9. Emergency Petroleum Allocation Act of 1973

12. Capped Domestic Crude Oil Prices • “New Crude Oil” – No Price Cap • “Stripper Oil” – No Price Cap

13. Old Oil CERTIFICATE

14. Old Oil NEW CERTIFICATE

15. UN-CONTROLLED OIL CERTIFICATE CONTROLLED OIL CERTIFICATE

17. AWL BIDNISS

18. BIG $$$,$$$.$$

19. VERY BIG $$$,$$$,$$$.$$

21. Price controls rescinded January 1981

22. will BROKER for FOOD

24. long term crude chart Source: (www.eia.doe.gov)

25. BOOM #2

26. U.K Taxes on North Sea Crude Oil • Japanese trading companies seeking to • Wall Street begins to arbitrage crude oil increase top line revenue

29. BOOM #3 The BRAGAWATT Era

30. National Energy Policy Act - 1992

33. “you have to understand that market realities have diverged from traditional valuation methodologies”

34. Second Quarter 2000 Top Power Marketers • Duke Energy Trading & Marketing, LLC 55,885,662 mwh • PG&E Energy Trading Power 51,330,085 mwh • Southern Company Energy Marketing LP 42,940,259 mwh • Aquila Energy Marketing Corp. 39,964,588 mwh • Reliant Energy Services, Inc. 31,288,607 mwh • El Paso Merchant Energy 22,339,315 mwh • Entergy Power Marketing Corp. 18,201,513 mwh • Constellation Power Source 16,466,585 mwh • MIECO, Inc. 12,254,449 mwh • Sempra Energy Trading 11,269,371 mwh • Enron Power Marketing Inc. 9,305,833 mwh • Williams Energy Marketing & Trading 7,722,926 mwh • TXU Energy Trading 6,838,664 mwh • New Energy Ventures, Inc. 6,822,925 mwh • HQ Energy Services 6,762,105 mwh • LG&E Energy Marketing Inc. 6,505,649 mwh (source – PowerMarketers.com)

36. Source: (www.ferc.gov)

38. Source: (www.nasdaq.com)

42. Current market expansion

43. The crude oil trading boom of the late 70’s was based on the gaming of a poorly conceived attempt to legislate energy prices. • The crude oil trading boom in the mid 80’s to mid 90’s was based upon a response to evolving tax laws in the U.K., the trading of cargoes of crude oil to bolster top line revenue and by the introduction of the ultimately self-extinguishing practice of arbitrage trading. • The boom in power trading in the late 90’s was based upon extraordinary stock market valuations, creating ravenous desire on the part of power marketers to demonstrate superior market share as measured in MWH traded.

44. Continued deregulation • Changing load shapes • Accurate price reporting • Higher ethical standards • Clearing of OTC energy products • Non-correlated asset • High energy prices • High volatility • Big money • Energy is hot • Balance sheet & order flow • Hedge funds

45. Where do we go from here?

46. Next big thing… • Volume growth • Sustained volatility • Worldwide deregulation • Higher allocations to energy • Financial institution presence • Hedge fund presence • Consolidation among utilities • Niche players • Robust fundamentals

47. We have just begun…