1. Martina Gutik Colleen Hurley Ben Jekeli Ben Smalley

2. Recommendation We recommend: Selling 368 basis points or 100% of Transocean Buying 418 basis points of Chevron Corp. (CVX) Holding our position in Noble Corp. Holding our position in National Oilwell

3. Agenda Sector Presentation Recap Transocean Analysis Chevron Analysis Recommendation Summary

4. % SIM Over/Under S&P 500 As of 4/30/10 Voted to increase weight by 50 bp

5. Current Stocks StockWeightPriceTarget PriceUpside BTU0%$37.29$4315.3% NOV3.30%$39.16$4510.6% NE2.78%$31.04$3719% RIG3.68%$55.38$6415.6%

6. Transocean (RIG) Overview Sector: Energy Industry: Oil and Gas Drilling Price: $55.38 Target: $64.00 Upside: 15.6% SELL 368 basis points

7. RIG – Business Overview World’s largest offshore drilling contractor Owns and operates 139 rigs (including 45 high- specification floaters) Industry leader in deepwater and harsh environment drilling

8. RIG - Rig Locations Notable Far East : 25 units U.K. North Sea : 16 units Middle East : 16 units U.S. Gulf of Mexico : 15 units

9. RIG - Initial Upside Recovering economies increase in oil demand, price Obama proposed increased offshore drilling Low utilization Industry leader

10. Oil Prices Current oil price : $70 / barrel European economy Contango Has been narrowing Projection : $78 / barrel Friday, oil dropped as much as 4.75% to $66 Slower demand this year IEA cut projected demand by 220,000 barrels / day (5/12/2010)

11. Oil Prices (2001 – Present)

12. RIG Stock Price (2001 – Present)

13. Transocean - Regression SUMMARY OUTPUT Regression Statistics Multiple R0.920519 R Square0.847355 Adjusted R Square0.846083 Standard Error13.39675 Observations122

14. RIG - Deepwater Horizon On April 20 th, the Deepwater Horizon (owned and operated by Transocean) exploded. Lapses in safety caused blast Investigators told hydraulic leak found in BOP Dead battery in control pod Memo from Transocean, citing 260 failure modes in blowout preventer Significantly slower/delayed operations Politics Minerals Management Service

15. Financial Impact 10-Q : “We expect to incur significant legal fees and costs”. Litigation Environmental damage and personal injuries Class action lawsuit – violation of federal securities laws Contract backlog : $590 M decline Loss of revenues amount to 3-4% decline in earnings

16. RIG - Revenues

17. RIG – Revenue and EPS Revenue 2010 : 10852 M (-6%) 2011 : 11705 M (8%) 2012 : 11667 M (0%) EPS 2010 : 8.87 (-22%) 2011 : 10.23 (15%) 2012 : 10.25 (0%)

18. RIG - Valuation Absolute HighLowMedianCurrentTarget MultipleTarget E, S, B /shareTarget Price Forward P/E88.03.121.86.178.8762.09 P/S14.3.33.31.6233.8167.61 P/B4.70.61.60.8169.22 P/CF49.32.811.23.7414.9759.88 P/EBITDA56.31.810.63.03.518.4664.61 Average Target64.68 Current Price55.38 Upside16.8%

19. Transocean - DCF

20. Transocean - Summary Sell all of Transocean (368 basis points) Loss of upside Volatility in economic recovery Oil prices European debt crisis Strong dollar Aftermath of Deepwater Horizon incident

21. Chevron Corp. Overview Sector: Energy Industry: Oil and Gas Integrated Price: $72.57 Target: $97 Upside: 33% Dividend Yield: 3.90% BUY 418 basis points

22. Chevron Corp. Founded in 1879 based in San Ramon, CA Among largest U.S. integrated oil companies Exxon and ConocoPhillips Owns or has stake in 9,600 gas stations in the U.S. under Chevron and Texaco Owns or has stakes in 12,400 outside the U.S.

23. Advantages of CVX 11 th largest company in S&P 500 by market capitalization Moves fairly inline with index 3.9% dividend yield Increased dividend payout 22 consecutive years Geographically diversified: Worldwide with key operations in Kazakhstan, Thailand, Indonesia, Saudi Arabia, Brazil, Venezuela, Africa, United Kingdom, and California

24. Advantages cont. Diversified Business: Exploration and production of natural gas and crude oil Seven refineries in Singapore, Thailand, South Korea, and Richmond and El Segundo, CA manufacture products for countries in the Pacific Basin. Pascagoula, MI and Pembroke, Wales, United Kingdom, supply countries primarily in the Atlantic basin. Transportation and Storage via oil tankers and pipelines Other areas of business: Trading, mining, and chemicals

25. Risks to CVX Decrease in Oil Prices Stock price is highly correlated with oil prices r =.89 Profit margins are already low Crack Spread – Currently $11.39 (1 month) typically ≈$20 Currency Risk The strengthening of U.S. dollar Repatriated profits are going to decrease Oil is more expensive, demand falls Government regulations Restrictions on offshore drilling Economic Recovery EU concerns and the possible double dip recession

27. Stock Performance vs. S&P 500 2-year

28. Stock Performance vs. S&P 500 5-year

29. Revenue

31. Earnings per Share

32. Dividend per share

33. Valuation Analysis Absolute HighLowMedianCurrentTarget MultipleTarget E, S, B /shareTarget Price Forward P/E30.55.614.48.3118.7295.92 P/S1.30.40.90.80.9106.8696.17 P/B4.61.42.51.6248.0396.06 P/CF11.63.87.26.17.212.6090.71 P/EBITDA8.422.375.064.445.0617.3187.58 Average Target93.29 Current Price72.57 Upside28.6% Relative to Industry HgihLowMedianCurrent Forward P/E1.60.590.90.82 P/S1.10.811 P/B1.30.80.9 P/CF1.30.510.8 P/EBITDA1.810.710.870.84

35. Recommendation Summary No action on NOV and NE SELL 368 basis points of Transocean Expected losses impacting offshore drilling BUY 418 basis points of Chevron Corp. Diversified business

36. Questions?