1. 1 l American Geological Institute Academic - Industry Associates Conference Houston, Texas 1999 Petroleum Sector Remarks Dodd DeCamp

2. 2 l Recent Oil Price Cycles Monthly 1987 - 98 35 40 Jan 87 Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Jan 96 Jan 97 Jan 98 $/Barrel Nominal Persian Gulf War Iran-Iraq Quota Battle Following War Metallgesellschaft Contracts Sell-off Asia Boom 2 Cold Winters Iraq Out Stocks Very Low Asia Crisis 2 Warm Winters Big Stock Build 10 15 20 25 30

3. 3 l Non-OPEC Supply Response Baker Hughes 35 40 45 19861987198819891990199119921993199419951996199719981999 1000 1200 1400 1600 1800 2000 Non-OPEC Rigs Non-OPEC Oil Prodoction Production Rigs All-Time Low

4. 4 l Petroleum Industry Cycles Deterioration in Upstream Margins Increased Economic Hurdles (Risk) in Industry Portfolios Reduced New Opportunity Set Reduced Availability of Investment Capital Lower Activity Levels Lower Quality Opportunity Sets (Long Term) Ultimate Decline in Production Capacity Emphasis on Near- Term Production Cause Short-term DriversEffect Bottom of Cycle Cost Structures Lower Service Sector Rates Modified from A.D. Little

5. 5 l Through-Cycle Strategic Management is Critical Petroleum Commodity Cycle - Asymmetric Tendency “Through-Cycle Strategic Management Reactive Near-term Focus Below Critical Mass = Crash & Burn Time 3-5 Years E&P “Opportunity Capture”

6. 6 l Idea Probe Focus Core Harvest / Exit Cumulative Value Smaller value increments with high investment efficiency Maximum rate of value addition Exposure to maximum potential value additions and ability to access emerging phase Effectiveness Efficiency Prioritize Focus Resources Performance Portfolio Objectives Are Impacted

7. 7 l Petroleum Industry Upstream Focus Alaska N. Slope N. Latin America Gulf of Mexico N. Africa Asia Gas/LNG NW Europe Atlantic Margin Caspian Sea Conventional Oil Gas Deepwater Brazil W. Africa Middle East FSU

8. 8 l Worldwide Exploration Finding Cost (3-Year Moving Average) Worst Performers Industry Average* Best Performers $/boe ** Notes: *Average (unweighted) for following peer companies: Amoco, ARCO, BP, Chevron, Elf, Exxon, Mobil, Phillips, Shell, Texaco and Unocal $/boe Focus on the proven petroleum basins and systematic use of technology are narrowing the field

9. 9 l Skills and Capability Needs Are Evolving Petroleum System Focus: Basin analysis Regional synthesis Leads and prospecting Formation evaluation Drilling and seismic operations 2-D & 3-D seismic mapping Seismic attribute analysis Skills Intense Data Density Sparse Exploitation / Development Focus: Reservoir scale description, visualization and modeling High res 3-D mapping and attribute analysis Integration of geology, geophysics and engineering Engineering – Commercial – Financial Interpolation Extrapolation Reservoir Exploitation Functions Opportunity Generators / Play Makers Play Makers / Prospect Generators Prospect Generators / Reservoir Geoscience Reservoir Geoscience / Reservoir Mgmt Increasing Integration “Core” Exploration “Focus” New-Field New Ventures Portfolio

10. 10 l Integrated Field-Scale Exploitation & Reservoir Management l

11. 11 l Immersive Visualization Environment Work Processes Are Evolving....

12. 12 l AAPG Demographics Year AAPG MembershipMean Age US Non-US

13. 13 l Summary - What to Expect Relentless Change –Industry consolidation –Through-cycle strategic management International Complexion –Scope –Staffing Fundamental skills still a priority –Dynamic learning organizations –Increasing intensity of inter-disciplinary teaming and specialization