1. Energy Company Presentation Dan Geisler Olga Boder(Firdman) Fall 2009

2. Agenda Recommendation Recap of Sector Presentation Business analysis Financial analysis &Valuation – RIG – NOV – COP – BP Revisit Recommendation

3. Recommendation Hold the overall % for the sector. Hold Transocean Ltd. Reduce the % of BP plc. – ADR and ConocoPhillips Co. Diversify our energy sector by purchasing a stock with an exposure to other industries inside the energy sector. Purchase National Oilwell Varco (NOV).

4. SIM and S&P 500 WeightSecurityTickerIndustry 4.62%BP plc. - ADRBP Major Integrated Oil & Gas 3.43%ConocoPhillips Co.COP Major Integrated Oil & Gas 4.75%Transocean Ltd.RIG Oil & Gas Drilling & Exploration SIM Companies and Industries

6. Oil Price Forecast

7. Industry/Sector Valuations Energy Absolute HighLowMedianCurrent P/Trailing E 14.96.111.712.1 P/Forward E 16.27.811.515.4 P/B 3.81.43.02.1Overvalued by >20% P/S 1.40.51.11.0Inline within 20% P/CF 9.44.17.35.4Undervalued by >20% Energy Relative to S&P 500 HighLowMedianCurrent P/Trailing E 0.880.530.700.68 P/Forward E 1.200.570.740.91 P/B 1.400.801.101.00Overvalued by >10% P/S 1.000.600.800.9Inline within 10% P/CF 0.900.500.700.50Undervalued by >10%

8. Industry/Sector Valuations Oil Drilling Relative to S&P 500 HighLowMedianCurrent P/Trailing E 3.700.280.980.41 P/Forward E 2.000.280.680.79 P/B 1.700.501.000.80Overvalued by >10% P/S 4.301.402.901.80Inline within 10% P/CF 1.800.401.000.50Undervalued by >10% Oil Integrated Relative to S&P 500 HighLowMedianCurrent P/Trailing E 0.790.510.610.64 P/Forward E 1.200.460.680.78 P/B 1.400.901.00 Overvalued by >10% P/S 0.800.500.600.80Inline within 10% P/CF 0.800.500.600.50Undervalued by >10% Oil Exploration Relative to S&P 500 HighLowMedianCurrent P/Trailing E 1.100.550.701.00 P/Forward E 1.900.510.731.20 P/B 1.300.700.80 Overvalued by >10% P/S 3.501.502.202.50Inline within 10% P/CF 0.800.400.600.50Undervalued by >10%

9. Industry/Sector Valuations Oil Equipment Relative to S&P 500 HighLowMedianCurrent P/Trailing E 1.900.581.300.77 P/Forward E 1.700.611.201.40 P/B 2.801.002.001.30Overvalued by >10% P/S 2.801.201.801.60Inline within 10% P/CF 1.600.701.300.80Undervalued by >10% Oil Refining Relative to S&P 500 HighLowMedianCurrent P/Trailing E 1.000.230.500.31 P/Forward E 3.900.390.553.90 P/B 1.300.300.800.30Overvalued by >10% P/S 0.500.100.200.10Inline within 10% P/CF 0.700.200.500.30Undervalued by >10% Coal Relative to S&P 500 HighLowMedianCurrent P/Trailing E 23.300.551.400.74 P/Forward E 2.100.390.951.20 P/B 1.900.701.101.90Overvalued by >10% P/S 4.000.901.301.40Inline within 10% P/CF 2.100.500.700.80Undervalued by >10%

10. Transocean Ltd. (RIG) Oil & Gas Drilling & Exploration Industry (correlation: 0.91) Provides contract drilling services for offshore oil drilling Their competitive advantage and source of high margin profits is due to a specialization in harsh environment and deepwater drilling Deepwater Millennium has set four world water-depth records in the U.S. Gulf of Mexico, including the most recent record at 8,960 feet of water Has well depth record of over 40,000 feet (7.5 miles)

11. Transocean (RIG) Key Facts/Figures 2008 Total revenue: $12,764m 2008 Net income: $4,202m (33.2%) 9 month profit margin: 27.8% Current stock price (11/20/09): $83.80 Current market cap (11/20/09): $26.91b Correlation to crude oil: 0.92 Headquartered: Vernier, Switzerland

12. Transocean (RIG) Valuation Ratios

14. National Oilwell Varco (NOV) Oil & Gas Equipment & Services Industry (correlation: 0.91) Design, construct, manufacture, and sell systems, components, and products used in oil and gas drilling and production Business segments: Rig Technology, Petroleum Services & Supplies, and Distribution Services

15. National Oilwell Varco (NOV) Key Facts/Figures 2008 Total revenue: $13,431m 2008 Net income: $1,952m (14.5%) 9 month profit margin: 11.3% Current stock price (11/20/09): $42.79 Current market cap (11/20/09): $17.9b Correlation to crude oil: 0.94 Headquartered: Houston, Texas

16. National Oilwell Varco (NOV) Valuation Ratios

18. ConocoPhillips Co. (COP) Integrated Oil & Gas Industry One of the largest integrated energy company in the world that engages in the exploration, production, refining, processing, and marketing of petroleum and natural gas. Lines of Business: Exploration and Production Midstream Refining and Marketing LUKOIL Investment Chemicals Emerging Businesses

19. ConocoPhillips Co. (COP) Key Facts/Figures 2008 Total revenue: $240,842m 2008 Net income: ($16,998)m (-7.1%) 9 month profit margin: 3.4% Current stock price (11/20/09): $52.08 Current market cap (11/20/09): $77.27b Correlation to oil: 0.91 Headquartered: Houston, Texas

20. ConocoPhillips Co. (COP) Valuation Ratios COP Absolute HighLowMedianCurrent Target Multiple Target E, S, B, etc/Share Target Price P/Trailing E 18.85.38.913.6 P/Forward E 1.20.20.70.50.7091.02 $ 63.70 P/B 3.50.81.6 1.3 1.6039.98 $ 63.97Overvalued by >20% P/S 12.442.533.974.644.5012.95 $ 49.85Inline within 20% P/CF 112.35.74.15.7012.54 $ 71.45Undervalued by >20% Simple Average $ 62.24

22. BP PLC(BP) Integrated Oil & Gas Industry The 3rd largest global energy company and the 5th largest company in the world. BP supplies fuel for transportation, energy for heat and light, retail services, and petrochemicals products. Lines of Business: Exploration and Production Refining and Marketing Other Businesses and Corporate

23. BP PLC (BP) Key Facts/Figures 2008 Total revenue: $ 367,053m 2008 Net income: $ 21,157 m (5.7%) 9 month profit margin: 7.2% Current stock price (11/20/09): $ 57.83 Current market cap (11/20/09): $180.62b Correlation to oil: 0.67 Headquartered: London, England

24. BP PLC (BP) Valuation Ratios BP Absolute HighLowMedianCurrent Target Multiple Target E, S, B, etc/Share Target Price P/Trailing E 164.510.713.4 P/Forward E 13.84.710.310.510.305.90 $ 60.77 P/B 3.31.42.61.81.8032.13 $ 57.83 Overvalued by >20% P/S 1.10.30.8 0.8085.70 $ 68.56 Inline within 20% P/CF 9.73.37.67.17.108.15 $ 57.83 Undervalued by >20% Simple Average $ 61.25

26. Recommendation Mult. Weighting40% DCF Weighting60% StockMult. Target PriceDCF Target PriceWeighted AverageCurrent PriceUpside/(Downside)Current HoldingRecommendation RIG$132.69$131.32$131.87$83.8057.4%4.75% NOV$56.52$64.57$61.35$42.7943.4%0.0%2.50% COP$62.24$60.75$61.35$52.0817.8%3.43%2.93% BP$61.25$62.85$62.21$57.837.6%4.62%2.62%

27. Questions?