E&P Overview

Our Exploration & Production Company finds, develops, and produces natural gas, oil, and natural gas liquids in a safe, efficient, and dependable manner. We are among the top 10 independent natural gas producers in North America with a balanced program throughout the United States, Brazil, and Egypt.

In 2007 our performance showed clear progress as we met several key objectives, including growing production by 8 percent, lowering operating expenses by 7 percent, and growing proved undeveloped and non-proved inventory by 12 percent. We increased our staff by more than 10 percent and started a process of high-grading our portfolio through strategic acquisitions and divestitures.

We expect to continue with the momentum established in 2007 and seek to create value through a disciplined and balanced capital investment program. Our drilling programs will focus on growing reserves at reasonable finding and development costs, and growing production efficiently through active cost management. Our strategies for 2008 are essentially the same as 2007, but more focused on the following areas:

• Building and applying competencies in assets with repeatable programs and significant project inventory;
• Sharpening execution skills to improve capital and expense efficiency and maximize returns;
• Adding assets with inventory that fit our competencies and divesting assets that do not.

*Cautionary Statement Regarding Forward-looking Statements