1. PERMIAN BASIN PETROLEUM ASSOCIATION Midland, Texas May 8, 2001 Barry Russell President Independent Petroleum Association of America

2. Overview The Nature Of The Energy Problem The Issues Changes In Washington IPAA’s Role

3. Major Focus: Energy Policy Domestic Production Of Oil And Natural Gas Meeting Growing Future Demand For Energy

4. U.S.Natural Gas Demand Comparison of 1992 and 1999 NPC Study Results 199019952000200520102015 YEAR 1999 NPC Reference Case 1992 NPC High Case 1992 NPC Low Case Actual A C T U A LF O C U S P E R I O D E X T E N D E D V I E W 1999 NPC Range of Outcomes TRILLION CUBIC FEET 15 20 25 30 35 ACTUAL FOCUS PERIOD EXTENDED VIEW

5. U.S. Natural Gas Demand by Sector

6. BCFD * Representing 91% of US Production Drilling Year: 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 Pre-1990 Production Decline Rate of Base: 16%17%15%17%18%21%23% 18%19% U.S. Production History* 1990199119991998199719961995199419931992

7. Natural Gas Prices (NYMEX)

8. Oil Rigs Natural Gas Rigs Rigs Drilling for Natural Gas Have Doubled Natural Gas Producers are Responding 488 1,125 April, 1999February, 2001

9. Issue: Building a Sound Energy Policy Recognize Importance Of Energy Establish Energy Advocacy –Require Consideration Of “Energy Impact” In Regulatory Decision Making

10. Critical Factors Access Technology Financial Requirements Skilled Workers Rigs Lead Times Requirements Of New Customers

11. Issue: Resource Base Knowing How Many Laws, Regulations And Conflicting Management Plans Are In Play

12. Issues: Access to Capital Increase Spending By $10 Billion A Year Through 2015 Double Wells Just To Deal With Natural Gas Demand Retain As Much Revenue As Possible Old And New Tax Reforms

13. What’s Going On In Washington Bush-Cheney National Energy Policy Task Force Transition Advisory Teams The Administration And The Agencies The Congress

14. Our Role In The Process Wildcatters’ PAC The Transition Congressional Hearings Congressional Oil & Gas Forum

15. Political Effectiveness Record-Breaking Fundraising Increased IPAA Member Involvement The Wildcatters Fund Contributed To 71 Open Congressional Seats And Competitive Races To Ensure A Pro-Business/ Pro-Oil & Gas Congress

16. Grassroots Activism Voter Education Guide “Get Out The Vote” Campaign

17. Hearings & Testimony The 107th Congress House Energy and Air Quality Subcommittee House Resources Committee House Energy and Mineral Resources Subcommittee Senate Energy and Natural Resources Committee Federal Energy Regulatory Commission Rep. Barbara Cubin (R-Wyoming) Rep. Joe Barton (R-Texas) Sen. Frank Murkowski (R-Alaska) Rep. James Hansen (R-Utah)

18. Congressional Oil & Gas Forum Advocacy The Oil and Gas Forum Hosted by IPAA on March 15, 2001 Drew 90 Participants and 7 Members of Congress