1. SUCCESS STORIES PANEL IPAA PRIVATE CAPITAL CONFERENCE January 16, 2008 Laramie Energy, LLC

2. Contents I. Introduction to Laramie Energy, LLC II.Laramie II Initial Asset Acquisition Summary III.Rationale Behind Strategy: “Why Unconventional?” 2

3. Laramie Energy Background Laramie Energy, LLC – Formed in May 2004 by former executives of Forest Oil and Mesa Hydrocarbons in Denver, Colorado – Initially funded by $150 million private equity commitment from EnCap and Credit Suisse/Avista  Equity commitment was increased to $215 million  Bank financing from JPMorgan Chase Bank, BNP Paribas, and Wells Fargo Initially invested $15 million to acquire ~18,000 acres in the Piceance Basin with ~1 mmcfd of production Over a three year period drilled approximately 200 wells (>99% success rate) – Increased IPs and EURs while reducing costs through new drilling and completing techniques Participated in the construction of pipeline and processing facilities to serve operations Grew acreage position to 60,000 acres, gross production to 47 mmcfd, and developed plans for the drilling of approximately 3,000 locations on its acreage with recoverable reserves in excess of 2 TCFE Sold assets in May 2007 for a price in excess of $1.0 billion 3

4. Laramie Energy II, LLC Laramie Energy II, LLC (“Laramie II”) is a Denver-based E&P company Formed in June 2007 with a $300 million equity commitment from EnCap, Avista, Credit Suisse and Management Laramie Energy II is the successor company to Laramie Energy, LLC which was sold in May of 2007 – Generated 3.4x ROI for investors in three years Laramie II has retained the core management team from Laramie Energy, LLC Laramie II Strategy – “Proof of Concept” – convert unconventional gas or oil field prospects into early development stage projects ready for full-scale development by larger E&P companies – Focused on unconventional resources in the Western Sedimentary Basin – “Build-to-Sell” strategy based on the premise that the acquisition activity by mid to large independents is core to today’s E&P business – Field developers such as Laramie II function as mid to large independents “Farm Team” 4 Introduction

5. Focus on Resource Plays in Established Areas As proven by Laramie Energy and today’s most valued public companies, focusing on resource plays will produce: – Higher rates of return on investment (+40% IRR vs. 13% for conventional) – Lower drilling, completion, and operating risk (+98% drilling success rate with resource) – Lower finding costs per Mcfe of reserves added ( $3.00 for industry) – More predictable cash flow and capital expenditure programs Resource play focus fits Laramie II’s technical team’s core strengths – Identify, acquire, and efficiently exploit tight sand or shale plays using modern drilling and completion technology – Build out the field and transportation infrastructure for a successor’s large scale development Focus business development efforts primarily in the Rocky Mountain states with a goal of having operations in no more than two core areas 5 Continue our Proven Business Model

6. Laramie Energy II Manage the Company as a project with a fixed life-cycle and clear investment objectives Maintain operatorship and high working interests in all projects Closely manage the Company’s gas marketing, hedging, and transportation programs Maintain financial discipline and a strong capital structure Closely control operating and overhead expenses – Outsource all non-core activities – Utilize consultants for part-time needs Employ a highly qualified, experienced team with substantial “hands on experience” in resource play developments and operations – Resource plays requires a different corporate mindset and operating focus than conventional E&P companies – Development is built around large scale drilling programs that repeat common operations in an assembly-line fashion and capture economies of scale to drive down costs – Engineering project management, acreage inventory, and drilling and completion expertise are key value drivers, not wildcat geologic prospecting Provide key employees with a material opportunity to participate in the value created by achieving the Company’s mission. 6 Operating Strategy

7. Laramie Energy II Target only high potential and proven tight sand, coalbed methane, or shale basins that have existing major transportation infrastructure Identify prospects through – Basin studies to identify major acreage holders in areas of interest and directly contact them – G&G prospect developers – Small E&P companies that have begun the proof of concept but do not have the capital or technical ability to continue the early development Patiently screen a number of prospects in the targeted basins and select only those that – are low risk in proven oil and gas areas – production can be achieved within 6 months or less – a large acreage position can be established to give the play running room – Laramie II controls operations Stay focused and concentrated in no more than two geographic areas Only select prospects that have the potential to be highly attractive to an acquirer upon exit 7 Business Development Strategy

8. Each New Prospect Must Fit our Exit Strategy Assets will be designed as a sales package to be highly attractive to buyers when we exit in three to six years. Our private equity investors expect to recoup their investment within 4 to 6 years through a strategic sale. We must gear our business to match what buyers’ prize the most – a “bolt on acquisition” with plenty of “running room” in proven oil and gas territory with pipeline access. Buyers want: – Concentrated asset portfolios in a few basins in same geographic region – Repeatable drilling plays over a broad area – High working interests – Operatorship in most cases – Mix of (a) PDP to (b) PUD plus Probable reserves of no more than 50:50 (but at least 15:85) to give plenty of development upside to the buyer (i.e. fully exploited reserves perceived as less valuable than a play where they can grow production through the drill bit) – Portfolio of highly prospective undeveloped acreage in our core areas. 8 Each prospect must have the potential for scale and quick conversion to cash flow.

9. Business Strategy – cont’d 9 Focus on Early Stage Field Development Projects

10. Contents I. Introduction to Laramie Energy, LLC II.Laramie II Initial Asset Acquisition Summary III.Rationale Behind Strategy: “Why Unconventional?” 10

11. LE II Initial Asset Acquisition Summary 11 In June 2007, Laramie II closed on a purchase and sale agreement to acquire the Piceance Basin assets of Petrogulf Corporation Petrogulf is a privately owned, Denver-based, E&P company with operations in the Rockies, California, and the U.S. Gulf Coast. Petrogulf sold “Phase 1” in its Helmer Gulch Prospect Area on the east side of the Rulison Field and directly west of the Mamm Creek Field and “Phase 2” is acreage located to the south of the Phase 1 acreage The asset package includes a majority working interest position in 19 existing wells all drilled by Petrogulf in the core acreage within the past 18 months (15 producing; 4 waiting on completion) and over 500 potential drilling locations Laramie II will be operator of all assets in the Phase1 acreage and most of the Phase2 acreage (Williams is primary non-operator) Laramie Energy funded the $75 million acquisition with an initial capital draw of $70 million from its investors and bank debt from JP Morgan, BNP Paribas, and Wells Fargo Laramie II began operating the field September 1, 2007 and since taking over operations has completed four wells and worked over 2 wells increasing production by roughly 6 mmcfd gross. In the month of October, 2007 the company initiated a drilling program starting with one rig. EUR’s range from 1 BCFE to over 2 BCFE The asset package’s acreage summary is as follows: OperatedNon-OperatedTotal Phase 1 Phase 2 Gross 2,8512,207na5,058 Net 2,4141,7911184,323

12. LE II Initial Acquisition Summary - Location Map 12 Laramie Energy II’s initial acquisition Phase I Acreage Mamm Creek Field Rulison Field Phase 2 Acreage Town of R ifle, Colorado The Williams Fork interval in the Rulison Field area is significantly better than in the Collbran Valley (Laramie Energy’s focus). The WF formation is as much as 3,700 feet thick and the lower 2,000 to 2,400 feet is within the gas bubble in which virtually every sandstone is gas charged. Because of the thickness of the formation, wells on 10-acre spacing are expected to recover 0.9 to 2.0 Bcfe each.

13. Contents I. Introduction to Laramie Energy, LLC II.Laramie II Initial Asset Acquisition Summary III.Rationale Behind Strategy: “Why Unconventional?” 13

14. 14 Business Rationale Unconventional reservoirs (“UCRs”) have become largest U.S. gas source – Production from UCRs has increased to over 50% of natural gas output, from 15% in 1990 – Production from conventional reservoirs declined 23% from 2005 to 2006 Technological advances are shifting the E&P industry to UCRs to fill U.S. gas supply gap E&P Business is Being Revolutionized Technological Advances Conventional Reservoirs: Small volumes, difficult to find, easy to develop Unconventional Reservoirs: Large volumes, easy to find, previously less economic to develop  Reservoir Knowledge  Hydrofracing  Stimulation  Horizontal Drilling  Drilling Fluids  3D Seismic 2006 U.S. Gas Production 44% Tight Gas Sands 5% Coal Bed Methane 5% Gas Shales 54% Total Gas Shales Oil Shales

15. 15 Pacific 49 Tcf Rocky Mtn. Basins 318 Tcf Mid-Con 41 Tcf Permian 38 Tcf N. Central 31 Tcf Appalachia 89 Tcf Gulf Coast 166 Tcf Source: United States Geological Survey (2000), Undiscovered Resources UCR Gas from Rockies – Our Principal Focus Largest U.S. Gas Resource Opportunities Rockies 41% of proved and probable Lower 48 gas reserves Over 80% Unconventional Undiscovered Gas Resources

16. 16 Financial Metrics Unconventional vs. Conventional Players Note: Conventional index includes: APA, APC, CHK, COG, DVN, EAC, EOG, NBL, NFX, OXY, PPP, PXD, PPP, PXP and XEC Unconventional index includes: BBG, CRZO, KWK, SWN, UPL and XTO Source:John S. Herold, Inc. 3-Year Weighted-Average F&D CostsLifting Costs

17. 17 Exclusive focus on unconventional projects in the Rocky Mountain region. – Disciplined business development program – Proof of concept development – Attractive exit profile Excellent management track record, depth of experience, and industry access – World-class unconventional oil and gas expertise in the Rockies – Small and large, private and public, seasoned E&P corporate managers – Excellent reputations and integrity – Access to several unconventional play acquisitions available currently Incentivized management aligned with equity investors – Management committing a significant percent of current liquid net worth – “Partnership mentality” with equity investors Laramie Energy II, LLC A Premier UCR Focused Company