The document summarizes the state of the US oil and gas industry from 2000-2011, including key events, price fluctuations, production levels, and policy issues. It highlights the economic importance of the industry in Louisiana and challenges it faces, such as increased regulation, lawsuits, and a difficult legislative environment. Alternative fuels like CNG are also discussed as an opportunity for the industry.

1. State of the Industry Gifford Briggswww.loga.la

2. Peaks & Valleys of the US Oil & Gas Industry China/India Demand GrowthSubprime Lending CrashInvasion of Iraq Iraq Invaded KuwaitIranian RevolutionPrice per Barrel of oil Southeast AsiaEconomic DownturnUS/Russia Cold WarDon Briggs / LOGA

3. “this administration ADMITTEDLY IS TRYING TO KILL OIL AND GAS”SENATOR INHOFE

4. 7% of Americas Energy Infrastructure Made up of Renewable Energy

5. Average Annual OIL PRICES2000 - 2011

6. Natural Gas Average Annual Prices2000-2011

7. RIG MAKEUPOilvs.Natural GasNatural Gas Rigs

8. OILUS Rig activity MapGAS

9. A golden age for gas?Gas is set to play a key role in meeting the world’s energy needsGas glut will peak soon, but may dissipate only very slowlyLower prices could lead to stronger demands for gas, backing out renewables & coal in power generationSource IEA

10. Federal IssuesInvestment IncentivesGulf of MexicoHydraulic Fracturing

11. President Obama Continues Efforts to Repeal Oil & Gas Investment Incentives $44 BillionRepeal expensing of intangible drilling costRepeal deductions for tertiary recoveryRepeal percentage depletion allowance for oil and gas wellsRepeal domestic manufacturing deduction for oil and gas companiesIncrease geological and geophysical amortization for independent producers to 7 years

12. Gulf of MexicoUnprecedented Uncertainty

14. Obama-Salazar Moratorium Has Crippled Domestic Oil Production

15. Gulf of Mexico Drilling ActivityBefore Macondo

16. Gulf of Mexico Rig Activity61 Rigs 4/1/10 – 27 Rigs 2/21/11Source : OCSBBS

17. Gulf of Mexico Permits IssuedPrevious year Avg. vs. Since Moratorium Lifted

18. Which is it ?

19. The Economic Impact of the Gulf of Mexico Offshore Oil and Natural Gas Industry and the Role of theIndependents SOURCE: IHS GLOBAL81% of all producing Gulf of Mexico leases - Independents46% of the Gulf’s producing deep water leases - Independents1,298 wells drilled in the deep-water GOM - Independents900,000 bbl. a day of oil equivalent (oil and natural gas together) GOM2009, accounted for more than 200,000 jobs - Independents$38 Billion in economic benefit in 2009 – IndependentsWithin the deep water, the exclusion of the independents would mean:Overall, the exclusion of the independents would cause a significant shrinkage in offshore oil and gas activity, a reduction in the dynamism of the industry, and a dilution of US. Technological and industry leadership

20. President Obama supports Brazil’s Petrobras"We want to help you with the technology and support to develop these oil reserves safely. And when you're ready to start selling, we want to be one of your best customers.”

21. U.S. Export-Import Bank's plan to lend $2 billion to Brazil's state-run Petrobras with the promise of more to follow.

22. BOEMRE – Approves Floating production, storage and offloading facility, also known as an FPSO, to produce oil and gas at its deepwater Chinook-Cascade project.What’s Wrong With This Picture?SpainNorwayIndiaMalaysiaVietnamBrazil VenezuelChinaAngolaChinaCUBA

23. Hydraulic fracturing

24. Hydraulic Fracturing HistoryFirst commercial “FRAC” job was conducted in 1947States Regulate Hydraulic FracturingMore than 1 million wells had been completed using this method by 1988Estimated that nearly 85% of wells drilled today are completed using hydraulic fracturing.

25. Interior Secretary Ken Salazar told a House subcommittee recently that a drilling technique known as hydraulic fracturing could be the “Achilles’ heel” that kills the natural gas industry.

27. The Truth About GaslandThe Washington Examiner, “Nothing But Hot Air in “Gasland”

28. State IssuesOil & Gas Industry Impact

29. Haynesville Competition

30. Louisiana Tax Commission Rules

31. Legislative Session

32. Legal ClimateLouisiana The Aorta of United States

33. Louisiana State mineral bonuses, Rentals, Royalty, and Severance

34. Natural Gas & Oil Pumps up Louisiana’s GDP NO. 1 SOUTH EAST - NO. 5 NATIONPercent Change in Real GDP 2008 - 2009U.S. Bureau of Economic Analysis

35. South LA Land Drilling Activity 2000 -2011

36. Louisiana Inland Water Drilling Activity1997 -2011

37. North Louisiana Drilling Activity

38. Number One Producing Natural Gas Field in the U.S. - 5.5 Billion Cubic Feet Per Day

39. Projected Economic ImpactHaynesville Shale 2010 - 14

40. Haynesville Shale Competing with other Shale plays

41. Basin by Basin Natural Gas NYMEX Breakeven Prices for 15% ATAX ROR Source: Company Data, Credit Suisse estimates

42. Taxes, Regulations, and Investment Incentives Make a Difference in the Competitive RaceComparison of A Typical Well Taxes PaidArkansas, Louisiana, Oklahoma, Texas

43. Liquids-rich basin economics far better than dry gas playsLiquids – Rich BasinsSource - Credit Suisse Estimates

44. 2011 Regular Legislative SessionFiscal SessionIndustry has a target on its backLost Inactive Well Incentive in 2010Horizontal Drilling Incentive is target in 2011Suspends severance taxes for 2 years or until payoutSenate will look at repealing or suspending exemptions through a resolution$1.4 Billion DeficitGovernor very clear about exemptions and tax increases

45. The Economic Impact of the horizontal well severance tax Incentive

46. Haynesville Shale Local Ordinances Modeled After Fort Worth Oil & Gas RegulationsREGULATING: Noise Levels, Hours of Operation, Lighting, Dust, Vibrations, Odors, Venting, Fencing, Signage, Discharge, Explosives, Debris, High Grass, Trash, Compressor Stations, Road Use, Seismic OperationsConsidering Oil & Gas Ordinances Bossier Parish

47. Webster ParishEnacted Road Ordinances Bienville Parish

48. Caddo Parish

49. Bossier Parish

50. Desoto Parish

51. Red River Parish

52. Webster Parish Noise Ordinances Bossier & Caddo ParishSeismic Ordinances Bossier City & ShreveportEnacted Oil & Gas Ordinances Caddo Parish (September 2009)

53. Shreveport (October 2009)