Empresa Energy, LP Jeff Elkin IPAA 2009 PCC Empresa 2008 Monetization January 14, 2009

Empresa Energy LP 1 EELP Overview & Haynesville Position  EELP is a EnCap Investments Fund V portfolio company with a drill-bit growth strategy focusing on East Texas and North Louisiana  While executing development program, Haynesville Shale play exploded due to public announcements from Chesapeake and Petrohawk  Touted highly attractive economics and the expansive acreage position in East Texas and North Louisiana  EELP held 30,000 acres within the core Haynesville area  Acreage values escalated from $250/acre to $10,000/acre in one month  Acreage competition was driven by three primary players  EELP had a very good relationship with all three companies  EELP needed a strategy in order to capture the potential value

Empresa Energy LP 2 Early 2008 Haynesville Risks/Concerns  Few Haynesville wells ( limited public data and technical analysis)  Potential for acreage prices to fall due to any poor Haynesville well results or one of the primary competitors quits leasing (now we have seen that happen)  Lease expirations were imminent and EELP could lose value by the day  Large portions of acreage not HBP in deeper intervals  Capital and resources are immense and unknown to develop Haynesville  EELP’s financial position vs. capital required for development  30,000 acres acres/well – 375 wells – $3 billion net cost!  AMI’s and surface restrictions burdened portions of properties  If EELP sells all of the deep rights and the Haynesville wells are as good as advertised, EELP could leave substantial value on the table  If EELP retains a working interest, which company is the best partner to execute

Empresa Energy LP Field Locations North Louisiana Elm Grove Sligo Caspiana Holly Shreveport

Empresa Energy LP Empresa Acreage in Haynesville Play Stonewall Bistineau Woodardville Clearlake CHK Johnson Branch EnCana Adcock 3

Empresa Energy LP 5 Strategy – Analyzing Our Acreage Position  30,000 acre net position in 4 main projects  Two prospects were fairly inactive with our model (Stonewall, Bistineau)  One project operated by partner with ongoing low impact drilling (Clearlake)  One ongoing operated project making 5+ MMCFD toward future sales point (Woodardville)  Stonewall (6,900 net Haynesville acres)  Negotiated drill to earn with experienced local operator  Tests included Haynesville exposure  Multiple stage deal with Horizontal Haynesville as goal  Woodardville (5,100 net Haynesville acres)  Retain deep rights and incorporate into ongoing development program  Gives ‘new’ deep buyer stable cash flow from the shallow production and adds big excitement to shallow buyer  Evaluate Market Value of Haynesville Rights in Remaining Two Areas (Clearlake, Bistineau)  18,000 net acres and very good working knowledge to lease more if deal moves  Deep tests help evaluate shallow targets

Empresa Energy LP Divestment Acreage as of 06/01/08 Bistineau Clearlake

Empresa Energy LP How to Manage the Project  Board decided to act quickly, use internal contacts and evaluate decisions continuously, lots of communication  Retain option to bring in formal advisor if needed  Dealt only with ‘Decision Level’ contacts at ‘Key” players already familiar with play (negotiated with 5 companies)  ‘Key’ players must have shown deep pockets and ability to do a deal.  Initial contacts by phone and to judge interest  Initial proposals were sufficient and similar enough to help board decide to:  Proceed with the idea  Retain some interest to keep upside exposure  Keep all contacts in negotiations until best offer was obvious

Empresa Energy LP 8 Transaction Results  Sold 90% of Haynesville rights only in Bistineau and Clearlake  EELP participates in Haynesville upside and retains 100% of shallow rights  Signed PSA in one week and closed within one month of negotiating terms  Company received ~ $190MM for deep rights  Cost basis in acreage: ~ $15MM

Empresa Energy LP EELP Current Plans  Participating in developing remaining Haynesville acreage  (8 producers, 5 drilling or completing, ___ proposed)  Cautiously managing Cotton Valley/Hosston reserves  (drilling horizontal CV well and using deeper tests for valuable well information)  Looking to expand position in play along with our investors  We are well capitalized and have the ability to be patient