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DAUGHERTY RESOURCES, INC.

(Nasdaq: NGAS). DAUGHERTY RESOURCES, INC. IPAA Oil & Gas Investment Symposium New York. April 2004. www.ngas.com. Company History. Daugherty Resources, Inc. (Nasdaq: NGAS) Nasdaq Listed Since 1993 Oil and Gas Producer Since 1984 Principal gas production is in eastern Kentucky.

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DAUGHERTY RESOURCES, INC.

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  1. (Nasdaq: NGAS) DAUGHERTY RESOURCES, INC. IPAA Oil & Gas Investment Symposium New York April 2004 www.ngas.com

  2. Company History • Daugherty Resources, Inc. (Nasdaq: NGAS) • Nasdaq Listed Since 1993 • Oil and Gas Producer Since 1984 • Principal gas production is in eastern Kentucky

  3. What is Daugherty? • Appalachian Basin Gas Producer • 390 Oil and Gas Wells • 31 BCFE of Proven Net Reserves • 180,000 Acres • Two Natural Gas Utilities • 112 Miles of Gas Gathering Pipeline • Gold Properties in Alaska

  4. Nasdaq: NGAS

  5. Balance Sheet

  6. Revenue

  7. Management • William S. Daugherty (Since 1984) President and CEO • IPAA 2004 Board of Directors • Kentucky Governor’s Representative to the Interstate Oil and Gas Compact Commission • Past President of Kentucky Oil and Gas Association • Past President of Kentucky Independent Petroleum Producers Association

  8. Management (cont.) • William G. Barr III (Since 1993) Vice President Acquisitions & Legal Affairs • Law Degree with 29 Years of Combined Legal and Management Experience • Former President of 120 Employee Independent Oil & Gas Producer • Mineral Law Author, Lecturer and Past Adjunct Professor at Chase Law School • Board of Trustees of the Energy & Mineral Law Foundation • Board of Directors and Legislative Chairman of Kentucky Oil and Gas Association

  9. Management (cont.) • D. Michael Wallen (Since 1995) Vice President Engineering and Secretary • Former Director of Kentucky Division of Oil and Gas from 1988 to 1995 • 24 Years Experience in Drilling and Production Engineering in the Appalachian Basin • Immediate Past President of Kentucky Oil & Gas Association • Past President of Society of Petroleum Engineers, East Kentucky Section

  10. Management (cont.) • Michael P. Windisch (Since 2002) Chief Financial Officer • PricewaterhouseCoopers LLP – Audit Manager • Member of the American Institute of Certified Public Accountants

  11. Oil and Gas Partnerships • 24 Partnerships Since 1996 • 205 Wells Drilled • 100% Success Rate for our Partners • 25.9% Annual Return Cash and Tax Savings • 10.2% Average Annual Cash Return • Partners - High Net Worth Individuals and Industry Partners

  12. Nature of Our Appalachian Gas Wells • High BTU Gas With Market Premium • 25 Year Well Life • Dry Gas • No Water Produced • Typical Well Reserve Range: 200-500 Mmcf

  13. What We Look For • Large Tracts (+5,000 Acres) • Excellent Geology • Nearby Proven Production • Close to Pipeline

  14. Interstate Pipeline System

  15. Big Sandy Oil and Gas Field • Southern Appalachian Basin • Over 10,000 Wells • Produced 2.5 TCF of Natural Gas – 250 Mmcf per Well • Daugherty Controls 180,000 Acres

  16. Kay Jay Prospect • 23,000 Acres • 120 Successful Gas Wells • Gas Transportation – CNR – Somerset/Texas Eastern • 60 Drilling Locations

  17. Fonde Prospect • 18,000 Acres • 21 Successful Gas Wells • Fault Thickened Devonian Shale • Big Lime Stratigraphic Traps • Gas Transportation – CNR

  18. Straight Creek Prospect • 22,000 Acres • 80 Locations Currently Available • Gas Transportation • Delta Energy • Duke Energy • 31 Gas Wells Drilled • New 8” Pipeline Installed to Duke Energy

  19. Leatherwood Project • 107,000 Acres • Up to 600 well locations • Gas Transportation • Kentucky-West Virginia Pipeline • Somerset / Texas Eastern • Duke Energy • 25 Test program drilled

  20. 2003 Accomplishments • Drilled 89 Gas Wells – 100% Success • Increased Proved Reserves 46% • Increased Profits to $3.8 Million ($0.47/share) • Added 41 Miles of Gas Gathering System • Reduced Secured Debt to $735,000 • Raised $22.7 Million in Partnership Drilling Funds • Cash Flow from Operations – $9.4 Million

  21. Plans for 2004 • Fund 140 Gas Wells in Appalachia • Maintain 30% Interest in Each Well • Sponsor 2 Drilling Programs • Increase Acreage Position to 200,000 Acres • Increase Pipeline Holdings • Increase Reserves through Acquisitions

  22. Why Own NGAS? • Low Cost Natural Gas Producer • Excellent Drilling Prospects • Small Cap Company in Tremendous Growth Stage • Excellent Balance Sheet and Financial Ratios (i.e., Debt to Equity) • Increasing Institutional Ownership • Experienced Management Team • Niche Player in Appalachian Basin

  23. Disclaimer The above presentation does not constitute an offer or solicitation to sell or purchase any security and should only be considered in conjunction with a prospectus describing in detail the risks and merits of any investment in any security offered of Daugherty Resources, Inc. The above may contain projections and forward looking statements or information based upon assumptions relative to the oil and gas industry. Except for historical and factual information all projections and forward looking statements are based upon estimates by Daugherty Resources, Inc. and are subject to risks and uncertainties that may be beyond their control and may cause results that significantly differ from the forward-looking statements either expressed or implied.

  24. (Nasdaq: NGAS) DAUGHERTY RESOURCES, INC. IPAA Oil & Gas Investment Symposium New York April 2004 www.ngas.com

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