1. PROFESSIONAL CAREERS IN THE COMING GLOBAL ENERGY TRANSITION Peter R. Rose AAPG PRESIDENT November 2005

2. THINKING ABOUT CAREERS - 1 Career  “Not just what happens to you between University and Retirement.”  A Life Journey that, despite Life’s uncertainties, needs planning, guiding, preparation, execution, decision-making, and help from others.  “Career crises” -- Dangers? or Opportunities? Prepare for them before they occur. Chance favors the prepared mind.

3. THINKING ABOUT CAREERS - 2 Mentoring  Archetypal human relationship  Mutual decision to join into by older person and younger person  Essential for professional careers

4. THINKING ABOUT CAREERS - 3 What are you now?  Student? Scientist? Employee? What will you be in 6 years?  Technician? Scientist? Employee? PROFESSIONAL

5. “... continually pursues and becomes proficient in a specialized occupation requiring substantial skill and/or education, and involving elements of learned study, personal dedication, and service to mankind.” “... traditionally Law, Medicine, and the Clergy; now Engineering, Architecture, and Accounting.” “An attitude involving personal endorsement of consistently high standards of knowledge, work performance, and conduct... and requiring a willingness to be accountable.”

6. OBLIGATIONS OF E&P PROFESSIONALS  Recognize Inherent Fiduciary Responsibility  Honor Professional Tenets: Objectivity Technically Current Thoroughness Candor Team Work  Inescapably Tied to Ethics

7. IHS INCREASING TECHNOLOGY Status of World Exploration: Well Advanced (Conventional) INCREASING NEW THEATERS SMALLER, LEANER, MORE CHALLENGING!

8. 0 200 400 600 800 1000 1200 1400 1600 1960's1970's1980's1990-99 > 1BBOE 500 MMBOE -1 BBOE 200 - 500 MMBOE 100 - 200 MMBOE 50 - 100 MMBOE 25 - 50 MMBOE Petroconsultants WHILE THE RATE OF DISCOVERY FOR GLOBAL SCALE (>1 BBOE) DISCOVERIES HAS DECREASED SINCE 1980, OPPORTUNITIES FOR SMALLER (BUT SIGNIFICANT) FIELDS HAVE REMAINED HIGH GLOBAL LARGE FIELD DISCOVERIES (> 50 MMBOE) (Excludes U.S. / Canada)

9. 1 10 100 1000 1920‘s1930‘s1940‘s1950‘s1960‘s1970‘s1980‘s1990‘s MMBOE, OR NUMBER OF FIELDS MEAN MEDIAN NUMBER OF GIANTS (> 1000 MMBOE) IHS GLOBAL FIELD SIZES AND NUMBERS Status of World Exploration: Discovery Parameters over Time

10. 0 5000 10000 15000 20000 25000 WILDCATS 12250138641929715842 FIELDS 295537345117 3794 1960's1970's1980's'90-99 ‘WILDCAT CHANCE’ (RATIO OF WILDCATS TO FIELDS) HAS REMAINED REMARKABLY CONSTANT THROUGH TIME. 24% 27% 26% 24% (Excludes U.S. / Canada) GLOBAL DISCOVERY PERCENTAGES Petroconsultants

11. 0 5000 10000 15000 20000 25000 NUMBER WILDCATS 12250138641929715842 FIELDS > 100 MMBOE 503581394303 1960's1970's1980's'90-99 THE RATIO OF WILDCATS TO DISCOVERIES >100MMBOE HAS DECREASED MARKEDLY SINCE 1980, BUT MAY HAVE 'LEVELED OFF'. 4.1% 4.2% 2.0% 1.9% (Excludes U.S. / Canada) GLOBAL DISCOVERY PERCENTAGES Petroconsultants

12. GLOBAL ENERGY DEMAND, BBOE per yr Edwards (1997) ALTERNATIVE COAL NATURAL GAS CRUDE OIL 190020002100 ENERGY SOURCES NGL TAR SANDS OIL SHALE OIL, NGL & TAR SANDS 100 120 80 60 40 20 Status of World Exploration A CHALLENGING DECADE Growing Demand New Technologies Challenging Theaters 2005 2015

13. Status of World Exploration Advancing Technologies Challenging Theaters Need for Efficiency Declining Resource Base Growing Demand Fewer Elephants, Plenty of Antelopes Adequate Capital Previous Loss of Credibility Do we have the Vision, Discipline, and the Will? Can we do it Efficiently with Exploration?

14. FUTURE AND ULTIMATE POTENTIAL ESTIMATES THROUGH TIME 1,000 2,000 3,000 4,000 5,000 TOTAL DISCOVERED FUTURE POTENTIAL ULTIMATE POTENTIAL 1,000 2,000 3,000 4,000 5,000 USGS '88'90'94 '91'85 WHILE MORE AND MORE OIL AND GAS HAVE BEEN DISCOVERED, ESTIMATES OF FUTURE POTENTIAL HAVE CONTINUED TO RISE OIL CO MMBOEMMBOE Brown, 1999

15. GLOBAL ULTIMATE ENDOWMENT* *Gas converted at 5.6BCF = 1MMBOE CUMULATIVE PRODUCTION REMAINING RESERVES FUTURE UNDISCOVERED (MEAN) 28% 45% 27% 2,500 BBL 700 BBL 1,100 BBL 670 BBL 300 (Campbell ‘97) 680 (USGS ‘95) 1,020 ( O & GJ ‘97 ) 12% 50% 38% 2,100 / 11.6 BBOE / MTCFG 1,400 TCFG/ 250 BBOE 5,800 TCFG/ 1,000 BBOE 4,400 TCFG/ 770 BBOE OIL /NGL GAS 2,400 (Campbell) 5,800 (USGS) 4,900 ( O & GJ )

16. HIGHER PRICE IMPROVED TECHNOLOGY LOWEST GRADE RESERVOIRS LOWER GRADE RESERVOIRS FIRST CLASS SMALL TARGETS SEISMIC - GEOLOGY HUGE TARGETS RESEARCH LARGE TARGETS ENGINEERING - GEOLOGY RESOURCE TRIANGLE

17. 1999 NPC Study (NPC, 1999b) Recoverable Portion of In-Place US Gas Resource (Tcf) Reserves (1,004) Reserve Growth (305) Undiscovered, Unconventional Unassessed Unconventional Reserves (400) Geopressured Brine (Up to 24,000) Gas Hydrate (Up to 300,000) Not Assessed by NPC Increasing development costs, technology needs, uncertainty, and decreasing concentration Natural Gas Resource Availability Cumulative Production (811) Reserves (157) Known Reserves Tinker, 2005

18. Tinker, UTBEG, 2004

19. MAJOR GAS BASINS OF THE WORLD (Resources in Tcf) USGS World Petroleum Assessment 2000 Natural Gas Resource Base N. Caspian Basin (156.9) Tcf Amu-Darya Basin (230.4 Tcf) West Siberian Basin (1,271.8 Tcf) Volga-Ural Region (99.2 Tcf) Western Gulf (251.6 Tcf) Gulf Cenozoic OCS (140.3 Tcf) East Venezuela Basin (129.7 Tcf) Northwest German Basin (141.7 Tcf) Grand Erg/ Ahnet Basin (114.2 Tcf) North Sea Graben (160.6 Tcf) ~3870 Tcf in Major Basins ~13,000 Tcf Total Resources Underestimates unconventional gas Does not include brines or hydrates Current annual global consumption is ~90 Tcf

20. CRUDE OIL A GLOBAL COMMODITY

21. SPECIALTIES YOU MAY NOT REALIZE THAT YOU ARE GOING TO NEED - 1 Clear Communication Skills Speaking Writing Active Listening Interpersonal Skills Tact Teamwork Goal-setting Practical Statistics E&P a “Repeated-Trials Game” Applied to geologic & geotechnical parameters Statistics, the Language of Uncertainty

22. SPECIALTIES YOU MAY NOT REALIZE THAT YOU ARE GOING TO NEED - 2 Economics and Finance Geoscience Results Usually have Economic Implications Perceptions of Future Profit drives Geotechnical Projects Geoscientists can Take Control of their Destiny Ethics Most Geoscience Projects have Fiduciary Components Need for Scientific and Personal Integrity Importance of Living within your Means

23. CAREER COUNSEL FOR GEOSCIENTISTS 1. You are a professional -- with professional responsibilities and privileges 2. Join professional associations and be active -- build personal networks 3. Don’t self-limit -- give yourself room to grow -- power in integrating geo-specialties 4. Learn some business economics -- don’t let others assess your projects’ values 5. Become a lifelong student -- your University Diploma is a permanent license to learn, not a “Union Card”. 6. Secrets of success: a) Competence b) Good work habits c) Integrity d) Responsiveness e) Contacts f) Enterprise

24. PROFESSIONAL CAREERS IN THE COMING GLOBAL ENERGY TRANSITION Peter R. Rose AAPG PRESIDENT November 2005