Transcript library.corporate

Crimson Exploration Inc.
Company Overview
June 30, 2007
Cautionary Statement Regarding
Forward-looking Statements
Certain statements included in this presentation are "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. Crimson Exploration Inc. (“Crimson” or “the Company”) cautions that strategic plans,
assumptions, expectations, objectives for future operations, projections, intentions, or beliefs about future events may,
and often do, vary from actual results and the differences can be material. Some of the key factors which could cause
actual results to vary from those Crimson expects include changes in natural gas and oil prices, the timing of planned
capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting
production results, operational factors affecting the commencement or maintenance of producing wells, the condition
of the capital markets generally, as well as the Company’s ability to access them, and uncertainties regarding
environmental regulations or litigation and other legal or regulatory developments affecting Crimson’s business.
Statements regarding future production are subject to all of the risks and uncertainties normally incident to the
exploration for and development and production of oil and gas. These risks include, but are not limited to, inflation or
lack of availability of goods and services, environmental risks, drilling risks and regulatory changes and the potential
lack of capital resources. The SEC has generally permitted oil and gas companies, in filings made with the SEC, to
disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to
be economically and legally producible under existing economic and operating conditions. The Company and its
independent third party reservoir engineers use the terms “probable” and “possible” to describe volumes of reserves
potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines may prohibit the
Company from including in filings with the SEC. These estimates are by their nature more speculative than estimates
of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the Company.
All estimates of probable reserves in this presentation have been prepared by independent third party engineers. More
information about the risks and uncertainties relating to Crimson’s forward-looking statements are found in the
Company’s SEC filings.
CONFIDENTIAL
2
Summary Company Overview




The Company was renamed Crimson in June 2005 following the February 2005
recapitalization of GulfWest Energy

Publicly traded on the NASDAQ bulletin board (TK: CXPO)

Producing assets primarily focused in South Louisiana and South Texas / Texas Gulf Coast

Emerging plays in the DJ Basin, Ft. Worth Barnett Shale and Mississippi CBM
$289.5MM acquisition from EXCO Resources, Inc. in May 2007

Pro Forma 2006 EBITDAX of $166 million

Financed 100% through an increased revolver ($200MM) and a second lien facility ($150MM)

Equity capitalization of $87 million (common, plus liquidation value of preferreds)
Pro forma proved reserves of 141 Bcfe @ 1/1/07

79% proved developed; 84% natural gas; 6.8 year proved reserve life

~80% operated; ~70% average working interest

Strip pre-tax proved PV-10% of $567 million (based on NYMEX strip on 5/8/07)

56.7 MMcfe/d current production (January 2007)

140 bcfe in unrisked probable and possible reserves; over 100 drilling locations
Experienced management and technical staff teamed with high quality financial sponsor

Average experience of over 25 years

Oaktree Capital Management (“Oaktree”) owns ~62% of Company on a fully diluted basis
(1)
(1) assuming conversion of preferreds, and exercise of vested options)
CONFIDENTIAL
3
History
20002001
- Funding from Aquila Energy Capital – bought Colorado, South Texas
and Grand Lake/Lacassine properties
20022004
- Aquila Energy Capital withdraws funding due to Aquila liquidity crunch
- Limited capital for development/exploration
- December 2004 – desperate financial state
2005
- Oaktree
2007
- Announces acquisition of assets from EXCO (May)
Capital Management acquires stake through preferred equity
infusion (February)
- CEO Allan Keel and CFO Joseph Grady join Company in connection with
Oaktree recapitalization (February)
- Reincorporated as a Delaware corporation / becomes Crimson Exploration
Inc. (June)
CONFIDENTIAL
4
Experienced Management Team
NAME AND TITLE
Allan D. Keel
President, CEO, Director
YEARS
EXP.
>25
EXPERIENCE




E. Joseph Grady
SVP, CFO
>30





Jay S. Mengle
SVP, Operations & Engineering
>25



Tracy Price
SVP, Land & Business Development
>25




Thomas H. Atkins
SVP, Exploration
>25



Joined Crimson in February 2005
Vice President / General Manager of Westport Resources
President / COO of Mariner Energy
Interim president of Woodside Energy Inc. (USA)
Joined Crimson in February 2005
CFO of Texas Petrochemicals Holdings, Inc.
CFO of Forcenergy, Inc.
CFO of Pelto Oil Company
Deloitte & Touche
Joined Crimson in April 2005
Shelf Asset Manager – GOM for Kerr-McGee
Senior management roles at Norcen Explorer and Westport Resources
Joined Crimson in April 2005
SVP – Land / Business Development at Houston Exploration
Manager of Land / Business Development of Newfield Exploration
Land Manager for Apache Corporation
Joined Crimson in April 2005
General Manager – GOM for Newfield Exploration
Exploration Manager for EOG Resources
CONFIDENTIAL
5
Experienced Board of Directors
NAME AND TITLE
Allan D. Keel
President, CEO, Director
EXPERIENCE




Lee B. Backsen
Vice President, Exploration for Andex
Resources, LLC.

Skardon F. Baker
Senior Vice President, Oaktree Capital
Management

B. James Ford
Managing Director, Oaktree Capital
Management







Lon McCain




Joined Crimson in February 2005
Vice President / General Manager of Westport Resources
President / COO of Mariner Energy
Interim president of Woodside Energy Inc. (USA)
Joined Crimson’s board in June 2005
Geologist for Continental Land & Fur Co. and Grant Geophysical
Senior exploration management positions with Burlington Resources, UMC
Petroleum, General Atlantic Gulf Coast, Kerr-McGee, Pelto Oil Co., Spectrum
Oil and Gas Co. and Shell Oil Co.
Joined Crimson’s board in February 2005
Executive Aide to Co-CEO’s of JP Morgan Investment Banking
Vice President in JP Morgan’s M&A group
Joined Crimson’s board in February 2005
Director of Cequel Communications, HydroChem Holdings, Trenton Media and
Red Technology Alliance
Consultant with McKinsey & Co
Joined Crimson’s board in June 2005
Vice President, Treasurer and CFO of Westport Resources Corporation
Senior Vice President and Principal of Petrie Parkman & Co.
Senior financial management positions with Presidio Oil Co., Petro-Lewis
Corporation and Ceres Capital
CONFIDENTIAL
6
Gulf Coast Acquisition Overview
(acquired 5/2007)
 Primarily
underexploited assets acquired by
Kerr-McGee in April 2004 from the
Westport Resources acquisition




Field Overview
Significant low-risk development
opportunities due to low historical
investment
Fenton Area
(Calcasieu Parish)
EXCO divested due to preference for longerlived reserves, outside core areas
Felicia Area
(Liberty County)
255 producing wells
Cage Ranch Area
(Brooks County)
>83,000 gross acres in prolific producing
trends
 Proved
reserves of 95 Bcfe
 Over
the course of the last 5 years, the EXCO
assets were owned by multiple companies as a
result of industry consolidation
(1)

Strip pre-tax PV-10% of $425 million

75% proved developed; 92% natural gas

80% operated, 65% average working interest

Unrisked 3P reserves of 235 Bcfe
 Over
(2)
100 identified drilling opportunities
 Current
 2006
Speaks Area
(Lavaca County)
production of 50.7 MMcfe/d
(3)
EBITDAX of $157 million
(1) Based on Netherland, Sewell & Associates, Inc. report as of December 31, 2006, and NYMEX strip as of May 8, 2007.
(2) Proved reserves are third party engineered. 3P reserves include unrisked probable and possible reserves per Crimson management.
(3) As of January 2007.
CONFIDENTIAL
7
Benefits of the Gulf Coast Acquisition


Establishes platform for visible, capital efficient asset growth
 Critical mass in core operating regions
 Sizable acreage position in prolific producing trends, over 83,000 gross
acres
 Drilling inventory of ~24 Bcfe of PUDs and 140 Bcfe of probable /
possible reserves (unrisked)
 Strong cash flow for debt reduction and drilling capital
 Over 100 drilling opportunities on probable / possible reserves
 Potential exploitation from new prospect generation
Management’s past affiliation with the assets makes Crimson a
uniquely qualified buyer
 Familiarity allows for better understanding of low-risk upside (95%+ exWestport assets)
 Ability to rapidly identify existing production / cost enhancement
opportunities to increase value
CONFIDENTIAL
8
Areas of Operation
(proforma for EXCO Property Acquisition in 5/2007)
($ in millions)
Total
Mississippi
Proved Reserves (Bcfe):
% Gas:
141.4
84%
Production
(MMcfe/d)1:
Strip PV-10%:
56.7
$567
Reserve Life (Years):
0.3
% Gas:
0%
Production
DJ
BASIN
(MMcfe/d)1:
Strip PV-10%:
3P Reserves (Bcfe):
6.8x
3P Reserves (Bcfe):
Proved Reserves (Bcfe):
0.1
$1
0.3
281.6
BARNETT
SHALE
Colorado
Proved Reserves (Bcfe):
% Gas:
7.9
75%
Production (MMcfe/d)1:
Strip PV-10%:
0.7
$24
3P Reserves (Bcfe):
7.9
WEST
TEXAS
GULF COAST
SOUTH
TEXAS
Texas
Louisiana
Proved Reserves (Bcfe):
116.1
Proved Reserves (Bcfe):
17.1
47%
% Gas:
87%
% Gas:
Production (MMcfe/d)1:
46.5
Production (MMcfe/d)1:
9.4
Strip PV-10%:
$464
Strip PV-10%:
$78
3P Reserves (Bcfe):
256.3
3P Reserves (Bcfe):
17.1
Note:
(1)
Proved reserves as of December 31, 2006 and are third party engineered. 3P reserves only include the EXCO assets’ unrisked probable and possible reserves per Crimson
management. Strip PV-10% as of May 8, 2007.
Based on average daily production in January 2007.
CONFIDENTIAL
9
Proved Reserves Summary (Proforma)
December 31, 2006 proved reserves were prepared by independent reservoir engineering firms


Netherland, Sewell & Associates, Inc. (“NSAI”) for the acquired EXCO properties
Pressler Petroleum Consultants, Inc. (“Pressler”) for the legacy Crimson properties
($ in millions)
Crimson
Oil
Gas
(MMBbls) (Bcf)
PDP
PDNP
PUD
Total Proved Reserves
1.3
0.9
0.3
2.5
Strip Pre-Tax Proved PV-10% (1)
% Gas (Proved)
% Proved Developed
10.0
17.2
4.2
31.4
Total
(Bcfe)
17.9
22.8
5.8
46.4
EXCO Asset Acquisition
Oil
Gas
Total
(MMBbls) (Bcf)
(Bcfe)
1.0
0.1
0.2
1.3
$141.9
68%
88%
53.0
11.9
22.3
87.3
59.1
12.3
23.5
95.0
$425.1
92%
75%
Oil
(MMBbls)
2.3
1.0
0.4
3.8
Total
Gas
(Bcf)
Total
(Bcfe)
62.9
29.1
26.6
118.6
77.0
35.1
29.3
141.4
$567.0
84%
79%
Source: NSAI and Pressler.
(1) Based on NYMEX strip prices as of May 8, 2007.
CONFIDENTIAL
10
Proved Reserve Distribution
(proforma for EXCO property acquisition in 5/2007)
Pro Forma Reserves by Category
Pro Forma PV-10% by Category (1)
PUD
13%
PUD
21%
PDNP
14%
PDP
54%
PDNP
25%
PDP
73%
Pro Forma Reserves by Region
Pro Forma PV-10% by Region (1)
Louisiana
12%
Colorado
6%
Louisiana
14%
Colorado
4%
Texas
82%
Texas
82%
141 Bcfe
(1)
$567 MM PV-10%
Pre-tax figure based on proved reserves and NYMEX strip as of May 8, 2007.
CONFIDENTIAL
11
Felicia Field Summary
Area of Operations
Highlights
Field Overview

Legacy Westport Resources property

21,658 gross / 12,910 net acres

Felicia
(Liberty County)


Field Summary
Operator
Crimson / Edge Petroleum
Yegua, Cook Mountain, Wilcox and Vicksburg reservoirs (9,000’
to 15,000’)
Well defined hydrocarbon traps
Five 3-D surveys total over 500 square miles within immediate
trend
Upside Potential
Working Interest
75%

Proved Reserves (Bcfe)
30.0

Probable & Possible Reserves: ~72 Bcfe
30 amplitude related prospects (3 PUD, 10 Probable, 17
Possible)
% Gas
85%
% PDP
96%

Current Production (MMcfe/d)
32.0
2007 & 2008 Plans
PV-10% ($MM)
$198

Abandonment pressure could add as much as 25 Bcfe (net)
Drill 7 wells total (3 PUD); $2.5MM each (DHC)
CONFIDENTIAL
12
Cage Ranch Field Summary
Area of Operations
Highlights
Field Overview
Cage Ranch
(Brooks County)

Legacy Westport Resources property

18,623 gross acres / 15,168 net acres

Frio and Vicksburg reservoirs (8,500’ to 12,000’)

Highly faulted structural traps

Field Summary
Operator
Ten 3-D seismic surveys covering 176 square miles of outlined
area
Upside Potential
Crimson
Working Interest
85%
Proved Reserves (Bcfe)
28.0
% Gas
94%
% PDP
24%
Current Production (MMcfe/d)
3.8
PV-10% ($MM)
$77

Probable & Possible Reserves: ~14 Bcfe

Identification of additional shallow Frio oil traps

Evaluation of Deeper Vicksburg sands below existing production
2007 & 2008 Plans

Drill 3 PUD wells; $1-2MM each
CONFIDENTIAL
13
Speaks Field Summary
Area of Operations
Highlights
Field Overview
Speaks
(Lavaca County)

Legacy Westport Resources property

10,987 gross / 5,861 net acres

Miocene to Deep Wilcox reservoirs (2,000’ to 17,000’)
Upside Potential
Field Summary
Operator
Crimson / Wofford
Working Interest
35%
Proved Reserves (Bcfe)
21.0
% Gas
98%
% PDP
30%
Current Production (MMcfe/d)
5.3
PV-10% ($MM)
$59

Probable & Possible Reserves: ~42 Bcfe

26 identified drilling locations

Multiple behind pipe opportunities
2007 & 2008 Plans

Drill 9 wells total (5 PUD); $6MM each
CONFIDENTIAL
14
Grand Lake / Lacassine Field Summary
Area of Operations
Highlights
Grand Lake
Field Overview

640 acres

3-D seismic recently acquired
Upside Potential
Grand Lake /
Lacassine
(Cameron Parish)

Targeting multiple pay, Miocene formations

Evaluating deeper sands and infill of existing formations
2007 & 2008 Plans
Field Summary
Operator
Working Interest
Proved Reserves (Bcfe)
Crimson
100%

Recomplete 3 wells

Capital expenditures of $2 million
Lacassine
Field Overview
13.0

% Gas
48%
Upside Potential
% PDP
52%

Over 150 Bcfe original gas in place; only 50% recovered
Current Production (MMcfe/d)
3.0

Acquiring proprietary 3-D seismic
PV-10% ($MM)
$48
940 acres
2007 & 2008 Plans

None; further technical review of field
CONFIDENTIAL
15
Madisonville / Rodessa Field Summary
Area of Operations
Highlights
Field Overview

Average working interest of over 75% in region

Two recent Rodessa wells
Upside Potential
Madisonville / Rodessa
(Madison County)

Proprietary 3-D over section of acreage recently acquired

Deep gas potential: offset operators successful in Rodessa
Field Summary
Operator

Crimson
Working Interest
75%
Proved Reserves (Bcfe)
13.0
% Gas
80%
% PDP
23%
Current Production (MMcfe/d)
1.0
PV-10% ($MM)
$39
Deep Bossier, Cotton Valley, Smackover formations
untested
2007 & 2008 Plans

Potentially drill 1 probable location

Complete and hookup new wells drilled in 2006

Capital expenditures of $12 million
CONFIDENTIAL
16
DJ Basin Summary
Area of Operations
Highlights
Field Overview

14,000 gross / 10,000 net acres

Acquired in 2000 with Aquila Energy Capital financing

DJ Basin
(Colorado)

Long-life reserves; 35 producing wells
Upside Potential
Field Summary
Operator
Two development wells drilled in 2006, adding net production
of approximately 368 Mcfe/d
Crimson

Further potential evaluation in Niobrara, Codell and deeper
formations
Working Interest
92%
Proved Reserves (Bcfe)
8.0
2007 & 2008 Plans
% Gas
75%

Drill 8 wells; $300-500K each
% PDP
52%

Capital expenditures of $3 million
Current Production (MMcfe/d)
0.7
PV-10% ($MM)
$24
CONFIDENTIAL
17
Barnett Shale / Mississippi CBM
Mississippi CBM
Ft. Worth Barnett Shale Joint Venture
LAUDERDALE
JASPER
C
L
A
R
K
E
JONES
WAYNE
Ft. Worth Barnett Shale
(Johnson and Tarrant Counties)






2,500 gross undeveloped acres
Acreage positioned in Tarrant / Johnson counties (core
area)
Offset operators include Chesapeake Energy, EOG
Resources, etc.
12.5% WI (non-operated)
2007 plans
 8 gross wells, first in May 2007
 $7 million capital in 2007, net
No proved reserves booked as of 12/31/06

125,000 acre CBM option agreement

85% WI

Three core holes in 1Q07 ($100,000 / core)

6 – 10 foot coal seams identified

Need to determine economic productivity
CONFIDENTIAL
18
West Texas Barnett/Woodford Shale
Culberson County, TX
SOUTHWESTERN
LOCATION
HALLWOOD
LOCATION
ENCANA
TD
13,500’
ENCANA
TD 11,000’
NRI: 77%
SOUTHWESTERN
TESTING
ENCANA
TD 11,000’
ENCANA
TD 11,000’
BULLD
OG TD
14,775’
HUDSPETH
PETRO-HUNT
DRILLING
CXP
ACREAGE
WI: 100%
PETROHUNT
DRILLING
EOG
TD 9,100’
2
LOCATIONS
SOUTHWESTE
RN ACREAGE
CRIMSON 24,000 ACRES
HALLWOOD
LOCATION
MATADOR
LEASES
CONCHO
TD 11,900’
RANGE
LOCATIO
N
EXPIRY: 2010
HALLWOOD
DRILLING
BURLINGTON
TD 13,450’
PETRO-HUNT
TD 13,500’
HALLWOOD
LOCATION
DRILLED WELL
CONCHO
DRILLING
QUICKSILVER
LOCATION
LOCATION
THOMPSON
DRILLING
DALLAS
2 LOCATIONS
QUICKSILVER
ACREAGE
QUICKSILVER
TD 10,368’
JEFF
DAVIS
5 MILES
CONFIDENTIAL
19
Exploration Joint Venture
CONFIDENTIAL
20
2007 Capital Expenditures
Estimated 2007 Capex by Region
Madisonville-Rodessa
23.8%
Estimated 2007 Capex by Category
Lease Acquisition
5%
Fort Worth Barnett Shale
14.7%
Exploration
42.5%
Development
52.5%
Mississippi 1%
Louisiana 12.6%
$42.8
$45
million
South Texas
47.9%
$42.8 million
($ in millions)
FT. WORTH
LOUISIANA MISSISSIPPI BARNETT SHALE
2007E Drilling Capital (1)
Lease Acquisition
Development
Exploration
Total
2007E Drilling Schedule (# Wells)
Development
Exploration
Total
MADISONVILLERODESSA
SOUTH TEXAS
TOTAL
$0.2
5.2
$5.4
–
0.4
$0.4
–
6.3
$6.3
$10.2
–
$10.2
$2.1
12.1
6.3
$20.5
$2.1
$22.5
$18.2
$42.8
1
–
1
–
3
3
–
7
7
2
–
2
14
9
23
17
19
36
(1) Excludes estimated seismic data purchases of approximately $9 million
CONFIDENTIAL
21
Financial Strategy

Maintain manageable debt levels




Maintain conservative financial policy:









Low-risk drilling inventory to increase cash flow and asset value, and reduce debt
Exploration consists of further delineation / step-out drilling of existing fields in well-defined producing trends
Limited “wildcat” exploration
Increase equity investor base and opportunistically access equity capital for growth




Fund capex from operating cash flow
Preserve financial flexibility through undrawn revolver capacity
Utilize oil and gas derivatives to limit commodity price downside risk
Target net debt / EBITDAX ratio under 2.5x; projected 2007 under 2.0x (based on NYMEX strip on 5/8/07)
Target net debt / proved reserves under $1.80 / Mcfe ($2.0/mcfe @ close)
Target adjusted EBITDAX/interest over 3.5x (projected for 2007 at 4.4x) (based on NYMEX strip on 5/8/07)
Balanced, conservative capital program


Senior revolver –$200MM borrowing base; $77MM available post-acquisition; L+125-200; 4 year maturity
Second lien facility - $150MM fully drawn at closing; L+525; 5 year maturity
Excess cash flow, after capital expenditures, for revolver repayment, preserving flexibility
Proceeds used to reduce revolver indebtedness
Don’t need equity new to reduce debt levels
Increase liquidity in stock to unlock value
Intensify efforts to increase efficiency:

Lower cash operating costs (LOE and G&A) per Mcfe produced
CONFIDENTIAL
22
Historical Financial Summary
($ in m illions)
Year Ended December 31
2004
2005
2006 numbers
Actual
Pro Forma (2)
0.2
1 .0
2 .1
5.7
0.2
1 .5
2 .5
7 .0
0.2
1 .5
2 .7
7 .3
1 .0
1 9.2
2 4.9
68.4
3 6.0
1 0.0
46.0
3 4.0
7 .0
41 .0
41 .0
6.0
47 .0
1 1 2 .0
2 9.0
1 41 .0
1 1 .1
0.1
1 1 .2
(4.9)
(2 .0)
(4.2 )
1 7 .6
0.1
1 7 .7
(5.6)
(3 .8)
(1 .3 )
2 1 .5
0.2
2 1 .7
(7 .5)
(5.1 )
(0.1 )
2 06.8
0.2
2 07 .0
(3 6.4)
(5.1 )
(2 1 .9)
Production
Oil (MMBbls)
Natural Gas (Bcf)
Production (Bcfe)
Daily Production (Mm cfe/d)
Reserves (Bcfe)
Prov ed Dev eloped
Prov ed Undev eloped
Total Prov ed Reserv es
Operating Results
Oil and Natural Gas Sales
Operating Ov erhead and Other Incom e
Total Rev enues
LOE + Production Taxes
G&A (1)
Interest Expense
EBITDAX
(3)
4.3
8.3
9.0
1 65.3
Unit Cash Costs ($ /Mcfe)
LOE + Production Taxes
(1)
G&A
Unlev ered Unit Cash Costs
Interest Expense
Total Unit Cash Costs
2 .3 5
0.97
3 .3 2
2 .00
5.3 2
2 .1 9
1 .48
3 .67
0.51
4.1 8
2 .84
1 .93
4.7 7
0.04
4.81
1 .46
0.2 0
1 .66
0.88
2 .54
EBITDAX/Mcfe ($/Mcfe)
2 .08
3 .2 7
3 .3 9
6.64
(1)
(2)
(3)
Excludes non-cash stock-based compensation expense
Unaudited, proforma for Exco acquisition as of January 1, 2006
Excludes MTM gains/losses on commodity hedges
.
CONFIDENTIAL
23
Balance Sheet
Actual
(000’s)
12/31/05
Cash /Current Assets
Property, Plant & Equipment, net
Other Assets
Derivative Instruments (Curr & LT)
Total Assets
$
Notes Payable/Current Debt
Other Current Liabilities
Long-term Debt
Asset Retirement Obligations (Curr & LT)
Derivative Instruments (Curr & LT)
Equity
Total Liabilities & Stockholders’ Equity
12/31/06
6/30//07
5,825
54,223
3,067
63,115
$
3,532
76,547
1,690
2,934
$ 84,703
$
$
121
4,626
1,103
1,311
3,149
52,805
$
$
$
63,115
$ 84,703
$
CONFIDENTIAL
91
10,656
8,415
4,215
61,326
$
24,266
345,725
4,589
2,057
376,637
97
21,500
277,178
7,558
70,304
$ 376,637
24
Capital Stock Structure
($ MM)
$35.5
Common O/S @ 6/30/2007
Preferred Stock (non-redeemable until 2010)
Series G
Series H
Series D
$/share
7.25
47.8 (1)
1.1 (1)
4.0 (2)
52.9
Total Com Equiv (assuming conversion)
1994/2004 Employee Options/Warrants
2005 Employee Options
9.00
3.50
9.40
$88.4
(MM)
4.9
5.3
0.3
5.6
10.5 (4)
0.8 (3)
5.50
0.2
31.3 (3)
13.80
2.3
FD (assuming conversion & exercise)
13.0
(1) Aggregate Liquidation Preference, plus accrued dividends, if any
(2) Converted to common late July 2007
(3) Anticipated proceeds from assumed exercise of options o/s, currently in the money or not
(4) Oaktree Capital controls approximately 63%
CONFIDENTIAL
25
Hedging Detail
(effective 5/8/2007)
Oil
Type
2H2007 Oil Hedges
Collars
Swaps
Total 2007 Hedges
Gas
Volumes
(MBbls)
49
177
226
Average
Floor
Price
$60.51
66.00
$64.82
Average
Ceiling
Price
Volumes
(MMcf)
Average
Floor
Price
Average
Ceiling
Price
$75.13
66.00
$67.97
2H2007 Natural Gas Hedges
Collars
Swaps
Total 2007 Hedges
5,574
–
5,574
$7.68
–
$7.68
$8.93
–
$8.93
7,908
564
8,472
$8.19
8.97
$8.24
$9.65
8.97
$9.60
Type
2008 Oil Hedges
Collars
Swaps
Total 2008 Hedges
226
78
304
$67.11
76.40
$69.50
$70.50
76.40
$72.02
2008 Natural Gas Hedges
Collars
Swaps
Total 2008 Hedges
2009 Oil Hedges
Collars
Swaps
Total 2009 Hedges
154
62
216
$66.55
74.20
$68.76
$71.40
74.20
$72.21
2009 Natural Gas Hedges
Collars
Swaps
Total 2009 Hedges
5,700
432
6,132
$7.90
8.32
$7.93
$9.45
8.32
$9.37
2010 Oil Hedges
Collars
Swaps
Total 2010 Hedges
108
51
159
$65.28
72.32
$67.54
$70.60
72.32
$71.15
2010 Natural Gas Hedges
Collars
Swaps
Total 2010 Hedges
4,212
348
4,560
$7.57
7.88
$7.59
$9.05
7.88
$8.96
2011 Oil Hedges
Collars
Swaps
Total 2011 Hedges
84
40
124
$64.50
70.74
$66.50
$69.50
70.74
$69.90
2011 Natural Gas Hedges
Collars
Swaps
Total 2011 Hedges
3,192
–
3,192
$7.32
–
$7.32
$8.70
–
$8.70
CONFIDENTIAL
26
Attractive Valuation vs. Peers
EV / Proved Reserves (Bcf)
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
$6.52
$6.36
$6.32
$5.61
$5.46
$4.46
$3.46
$3.18
$3.16 $2.83
Mean
PQ
CRZO EPEX
GDP
GPOR
PLLL
TMR
BEXP
ROSE CWEI
$2.55
$2.21
CXPO
EAC
Median
EV / PV-10
6.0x
5.0x
4.0x
3.0x
2.0x
1.0x
0.0x
5.4x
Mean
3.4x
Median
3.1x
2.4x
2.3x
1.9x
1.8x
1.4x
1.4x
1.1x
1.0x
0.9x
GDP
CRZO
PLLL
EPEX
PQ
PV-10 values and proved reserves as of
most recent SEC proved reserve filing.
Source: Capital IQ
GPOR ROSE BEXP
CONFIDENTIAL
EAC
CWEI
TMR
CXPO
27
Attractive Valuation vs. Peers
EV / LTM EBITDA
30.0x
24.8x
25.0x
20.0x
15.0x
2.14x
Mean
18.4x
14.6x
13.6x
Median
10.5x
9.6x
10.0x
5.0x
0.0x
CRZO
GDP GPOR PLLL
EAC
7.4x
6.1x
CWEI EPEX ROSE
5.7x
PQ
5.4x
BEXP
2.7x
2.14x
TMR
CXPO
EV / LTM Daily Production (Mmcf)
$40.00
$36.78
$24.88 $23.90
$30.00
$21.46 $20.88
$20.00
Mean
$16.04 $14.13 $12.62 $11.06
$10.00
Median
$9.27
$6.46
$4.85
CWEI
TMR
CXPO
$0.00
CRZO
PLLL
PQ
GPOR
Production based on companies’
most recent SEC filings.
Source: Capital IQ
GDP
ROSE
EAC
EPEX BEXP
CONFIDENTIAL
28
Corporate Summary







Experienced management team with proven track record of growth through
exploration, production and acquisition
Attractive portfolio of properties with low risk growth potential through
significant upside from PUDs, probable and possible reserves
Visible near-term debt reduction through free cash flow
Limited commodity risk due to aggressive hedging program and low relative
basis differentials
Strong financial partner in Oaktree who has vested interest in assisting the
company achieve its growth plans and increasing shareholder value
Developing exploration/exploration capability far above average value
creation
Inventory of lower risk exploitation and exploration opportunities in the
Barnett and Woodford Shale, South Texas Lobo and Mississippi coal bed
methane plays
CONFIDENTIAL
29