Louisiana Department of Natural Resources Louisiana Mid-Continent Oil and Gas Association “Perspective on Energy Issues” DNR Secretary Scott A. Angelle January 26,

Oil and Gas prices decoupling 2

Price Dynamics Changing Faster Historic Pricing Ratio: Oil vs Natural Gas 3

Shale Plays in Lower 48 States 4

U.S. Energy Sources in

6 Domestic Gas Production/Consumption Trillion Cubic Feet Per Year Gap Filled with Imports

Oil vs Gas in U.S. Drilling 7

8 One Week of Natural Gas Prices

Petrochemicals on the way down in Ga. Gulf cuts 100 at La. plant The Advocate June 6, 2009 Dow trimming La. jobs 260 laid off around area The Advocate January 31, face layoffs at BR offices Albemarle Corp. starts Restructuring The Advocate January 30, 2009 Before Wednesday's announcement by Dow, the Louisiana Chemical Association anticipated losing about 1,000 chemical jobs in the next year… The Advocate December 11, 2008

Port of New Orleans expansion after chemical exports jumped 34 percent in 2010 Dow investing $4 billion in Gulf Coast ethane cracker near Gulf Coast by 2017, will reopen another in Louisiana, and build two propylene plants Methanex of Canada has announced it will move production facilities from Chile to Louisiana Occidental Chemical, Chevron Phillips Chemical, and Formosa Plastics Corp. have indicated interest in Gulf Coast 10 Shale Natural Gas Has Brought on Mississippi River Renaissance

Gas-to-Liquids Opportunity Sasol proposed Gas-To-Liquids plant in Calcasieu Parish Potential $10-billion direct investment and 800-plus direct jobs that are associated with it Designed to produce highway-grade diesel fuel Sasol has stated economics work at 20-to-1 oil-gas price ratio Already began expansion of petrochemical facility in the area 11

Northwest –Southwest Global Expressway 12

Cheniere Energy Partners has initiated a project to transform its Sabine Pass LNG Terminal into a bi-directional facility. Text Body in White pt Aerial Font (bold) Sabine Pass LNG Terminal Updated: 04/01/2011 AD Cheniere Energy Partners, L.P. (“Cheniere Partners”), under its subsidiary Sabine Pass Liquefaction, LLC (“Sabine Pass”), has initiated a project to include liquefaction services at the Sabine Pass LNG receiving terminal in Cameron Parish, Louisiana. A dding liquefaction capabilities would transform the Sabine Pass terminal into a bi- directional facility capable of liquefying and exporting natural gas in addition to importing and regasifying foreign- sourced LNG. 13

1.7 tcf.78 tcf Louisiana total – 2.49 tcf from 19,845 wells 2011 Natural Gas Production Haynesville accounts for 9 percent of state gas wells and 68 percent of state gas production Haynesville only – 1.7 tcf from 1,805 wells U.S. total – 23 tcf from 480,000+ wells 30 percent of U.S. natural gas production now comes from shale wells 14

Three Louisianas – Five Years Snapshots of rig activity trends

Louisiana Rig Counts OCS Moratorium

Louisiana’s New Energy Map 17

Davy Jones Discovery 2 wells drilled, awaiting completion equipment First production could come in 2012 McMoran’s investment has drawn interest in area from other exploration companies McMoran Exploration is developing major discovery in about 20 feet of water, 10 miles south of Vermilion Parish Ultra-deep prospect – drilled more than 30,000 feet under sea floor (more than 5 miles) May be 200 feet thick – estimates of 2 tcf to 6 tcf of natural gas, potentially one of the largest finds in the Gulf 18

OCS Activity Improving – But Not There Yet 19 OCS Moratorium Pre-Moratorium Rig Activity Level

20 Crude Oil/Condensate Production 2011 Million Barrels a Day

21 GEST Related Meetings/Phone Calls Date Meeting /CallLocationNotes 118-Jun-10CallMMS & Stakeholder Conference call 222-Jun-10CallMMS & Stakeholder Conference call 324-Jun-10CallMMS and stakeholder conference call 425-Jun-10CallMMS and Stakeholder Conference Call 529-Jun-10CallMMS & Stakeholder Conference Call 61-Jul-10CallMMS and Stakeholder Conference Call 76-Jul-10MeetingBTRMeeting with Lori Leblanc 86-Jul-10CallMMS and Stakeholder Conference Call 98-Jul-10CallMMS & Stakeholder Conference Call 1013-Jul-10Call Conference call RE: Strategy for Recovery for Oil & Gas Industry 1121-Jul-10CallBOEM Conference Call 1223-Jul-10CallConference call on Shallow Water Drilling 1328-Jul-10Call Conference call with Shallow and Deep water drillers 1429-Jul-10CallBOEM Conference Call 152-Aug-10CallLori Leblanc Conference Call 164-Aug-10MeetingNew OrleansMeeting with Lori Leblanc/Others RE: Workshop 1712-Aug-10WorkshopLafayetteOffshore Drilling Regulatory 1831-Aug-10CallBromwich precall 191-Sep-10CallConference call with Lori Leblanc 208-Sep-10WorkshopLafayetteEvent at the Lite Center 2113-Sep Sep-10CallIndustry Conference Call 2322-Sep-10WorkshopNew OrleansOffshore Drilling Regulatory Workshop 2413-Oct-10CallConference Call with Shallow Water Drillers 2519-Oct-10Call Call with Lori Leblanc, Sandi Fury, Warren Williams, Kalil Ackal and Jim Noe 263-Nov-10MeetingBaton RougeMeeting with Lori Leblanc 2712-Nov-10CallConference Call with Shallow Water Drillers 281-Dec-10CallConference call with GEST group 292-Dec-10CallReturn to Work Coalition Conference Call 307-Dec-10CallConference call with Lori Leblanc Date Meeting /CallLocationNotes 3120-Dec-10CallConference call with Lori Leblanc 327-Jan-11CallConference call with Back to work Coalition 3312-Jan-11MeetingDCMeeting with “Back to work Coalition” 3412-Jan-11MeetingDCMeeting with Director Bromwich and Back to Work Coalition 3514-Jan-11CallConference call with Back to work Coalition 3620-Jan-11CallConference call White Paper, “Should to Must” 3731-Jan-11CallConference call with Back to work Coalition 381-Feb-11CallConference call with Back to work Coalition 3914-Feb-11CallConference call with Back to work Coalition 4021-Feb-11CallConference call with Back to work Coalition 4128-Feb-11CallConference call with Back to work Coalition 4214-Mar-11CallSmall Group Industry Conference Call 4314-Mar-11CallLarge Industry Conference Call 4424-Mar-11Meeting New OrleansGEST & Back to work Coalition meeting 451-Apr-11CallConference call with Back to work Coalition 4615-Apr-11CallConference call with Back to work Coalition 4711-May-11CallConference call with Lori Leblanc & GEST Members 481-Jun-11CallConference call with Lori Leblanc 493-Jun-11CallConference call with Back to Work Coalition (Small Grp) 507-Jun-11CallConference call with Back to Work Coalition 5110-Jun-11CallConference call with Lori Leblanc 5216-Jun-11CallConference call with Lori Leblanc & Bill Townsley (Shell) 5329-Jun-11CallConference call with Lori Leblanc & Others 548-Jul-11CallConference call with Lori Leblanc & Ted 5515-Jul-11CallConference call with Back to Work Coalition (Small Grp) 561-Aug-11CallConference call with Back to Work Coalition 5730-Aug-11WorkshopBOEMRE Workshop 5812-Sep-11CallConference call with Lori Leblanc 5915-Sep-11MeetingBOEMRE Reorganization Meeting 6015-Sep-11MeetingMeeting with Back to Work Coalition and Director Bromwich 613-Oct-11CallConference Call with Back to Work Coalition 6218-Oct-11CallConference Call with Lori Leblanc & Others Date Meeting /CallLocationNotes 6320-Oct-11Call Conference Call with Lori Leblanc & Back to Work Coalition 6426-Oct-11Call Conference call with Back to Work Coalition 6528-Oct-11Call Conference call with Steve Feldgus & Back to work Coalition 6623-Nov-11CallConference call with Lori Leblanc 6730-Nov-11MeetingHoustonGEST Stakeholders Meeting

22 Deepwater Plan and First APD Approval: EPs and DOCDs