Exploration & Production Overview

Exploration & Production Overview

Restructuring Complete New management Capital discipline instilled in organization Portfolio much better balanced: Risk and reserve life Multi-year inventory delivers solid returns at plan prices All regions will create value in 2006 and beyond 35

2005 Summary Onshore Production of 324 MMcfe/d* 29% organic production growth Reserves growth of 43% to 1,710 Bcfe* 99% drilling success rate of 453 of 454 wells Significant acquisition activity added 494 Bcfe Generated PVR of 1.23 Texas Gulf Coast Brazil Production of 53 MMcfe/d Reserves of 250 Bcfe Production of 211 MMcfe/d YE reserves of 468 Bcfe 89% drilling success rate (16 of 18 wells); 100% in 2H Generated PVR of 1.02, 1.65 in 2H GOM/SLA Average 179 MMcfe/d (213 MMcfe/d w/o hurricanes) YE reserves of 240 Bcfe 73% drilling success rate (8 of 11 wells) Generated PVR of 1.19 Rio de Janeiro *Includes our 43.1% share of Four Star 36

Reserve Reconciliation Beginning balance 12/31/2004 Production Sale of reserves in place Purchases of reserves in place Extensions and discoveries Revisions Ending balance 12/31/2005 Equivalent (Bcfe) 2,181 (280) (25) 529 242 21 2,668 22% Growth Note: Includes our 43.1% share of Four Star (see Appendix) 37

YE 2005 Reserves Base PUD 783 Bcfe 29% PDNP 306 Bcfe 12% PDP 1,579 Bcfe 59% Total Reserves 2,668 Bcfe $9.2 Billion PV10% GOM 240 Bcfe 9% International 250 Bcfe 9% TGC 468 Bcfe 18% Onshore 1,710 Bcfe 64% Note: Includes our 43.1% share of Four Star 38

2005 Quarterly Production 59 Average Production: 767 MMcfe/d 766 784 798 50 39 856 51 51 97 MMcfe/d 247 294 348 405 228 222 199 196 232 218 161 107 1Q2005 2Q2005 3Q2005 4Q2005E GOM TGC Onshore International Hurricane Impact Note: Includes our 43.1% share of Four Star 39

Hurricane Update Current GOM production: 130 MMcfe/d 2005 production losses: 12 Bcfe Significant projects: WC 62/75 sales: February 2006 (23 MMcfe/d) EI 372 3 rd party repairs: February 2006 (20 MMcfe/d) Most operated production restored by 2Q 2006 3 rd party restoration: 10 MMcfe/d (timing unknown) 40

Acquisition Success Completed $1.1 billion of acquisitions at $2.17/Mcfe East Texas and South Texas deals more tactical, augmenting existing core areas Medicine Bow transaction strategic Extended reserve life Significantly expanded Rockies presence Key elements of Medicine Bow assets Operated assets contain multiple opportunities Four Star Oil & Gas Company (43% interest) Very stable, long-lived production Significant free cash flow Many opportunities for "block and tackle" enhancements in San Juan and Hugoton basins 41

Acquisition Discipline Weighted Average $//Mcfe 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 Good value in current commodity price environment 2.17 2.19 2.20 - PXD WLL PXP EGN RRC OXY CSTK APA XTO MDU THX EP KCS MEDIAN XEC MEAN HAWK EAC EXCO CHK DNR EQT Mariner Woodside CDIS NHY STO Note: EP's acquisition metrics reflect zero goodwill and purchase price allocations of approximately 80% to proved reserves Source: JS Herold's 2005 transactions through 11/30/2005; Mean, Median of 63 companies 42

Stabilizing Reserve Profile Year-end reserves: Year-end reserves: Year-end reserves: Assuming 5 10% reserve growth: 2,520 Bcfe 2,184 Bcfe 2,668 Bcfe 2,800 2,950 Bcfe 1 1 2003 2004 2005 2006E Full-year production: 410 Bcfe Full-year production: 303 Bcfe Full-year production: 280/292 Bcfe 2 Plan production: 300 310 Bcfe R/P Ratio: 6.1 7.2 9.5/9.1 2 9.8 9.0 1 Includes our 43.1% share of Four Star 2 Actual/hurricane adjusted 43

Improved Production Mix 1000 900 800 700 600 500 400 300 200 100 0 Katrina International TGC GOM Onshore (includes Four Star) MMcfe/d 1/04 4/04 7/04 10/04 1/05 4/05 7/05 10/05 1/06E 4/06E 7/06E 10/06E Expected 2005 to 2006 average volume growth of 8% to 11% 44

Plan Metrics Production (MMcfe/d) 1 Capital expenditures ($ MM) E&D Acquisitions Realized prices (includes hedges) 2 Gas ($/Mcf) Liquids ($/Bbl) Production costs ($/Mcfe) 3 Other taxes ($/Mcfe) General and administrative expenses ($/Mcfe) Total cash expenses 4 2005E 767 $ 718 1,149 $ 6.20 $44.96 $ 0.96 0.04 0.67 $ 1.67 2006 Plan 825 850 $ 1,000 $ 6.96 $ 52.12 $1.02 $1.05 0.04 0.05 0.58 0.61 $1.64 $1.71 1 Includes our 43.1% share of Four Star 2 Prices are stated after transportation costs 3 Production costs include lease operating expenses plus production related taxes 4 Cash expenses equal total operating expenses less DD&A and other non-cash charges 45

Managing Inflation Efficiency improvements Aligned with service providers to leverage $1 billion capital program Ability to meet projected activity levels Longer term rig contracts in key areas 46

Remain Focused on the Basics Spent $109 MM in production enhancements Cycle time improvements resulted in more production days Implemented new field efficiency program: EP PRIDE 47

Average Rig Activity 35 34 38 3 7 5 5 7 29 4 5 25 4 2 6 23 22 20 19 29 1Q 2005 2Q 2005 3Q 2005 4Q 2005 2006E Total drilling and completion Total recompletions Total workovers 48

Healthy Drilling Inventory Conventional Gas Onshore Division Texas Gulf Coast Non-Conventional Gas Onshore Oil Gulf of Mexico/South Louisiana Total Domestic International Total Company Number of Wells 2006 Plan Future 133 490 43 80 353 1,630 62 290 29 100 620 2,590 9 30 629 2,620 Years Total 4 3 5 6 4 5 4 5 Inventory generates 1.15 PVR at $5.50 price deck 49

Significant Acreage More than 3 million gross acres in high-quality basins Onshore Developed Gross: 753,000 Net: 523,000 Undeveloped Gross: 1,400,000 Net: 1,185,000 TGC Note: Excludes FSOG acreage Developed Gross: 105,000 Net: 79,000 Undeveloped Gross: 153,000 Net: 108,000 GOM/SLA Developed Gross: 530,000 Net: 363,000 Undeveloped Gross: 541,000 Net: 495,000 50

2006 E&P Capital Allocation Onshore continues proven development program Texas Gulf Coast builds on 2H05 development success with exploration exposure GOM provides short-life, high-return investment opportunities with significant exploration exposure Int l $90 MM Onshore $490 MM Texas Gulf Coast $180 MM GOM $240 MM International builds for the future Total = $1,000 MM 51

Balanced Drilling Portfolio Gross Wells % of 2006 Drilling Capital Risked Reserve Exposure (Bcfe) High (Pc < 40%) GOM Expl. Int'l Expl. 16 12% 46 Risk Med GOM Dev. Ons. Expl. TGC Expl. Int'l Dev. 60 20% 73 Low (Pc > 80%) Onshore Dev. TGC Dev. 553 68% 342 52

2005 Drilling Results 2005 Plan Pre-Drill PVR on Corporate Plan Deck 1 Post-Drill PVR on Corporate Plan Deck 1 Post-Drill PVR on Strip Prices 2 Total PVR = 1.23 Total PVR = 1.19 Total PVR = 2.11 2.14 2.38 1.57 1.24 1.33 1.07 1.23 1.19 1.02 Ons. GOM/SLA TGC Predicted Success 99% 67% 83% Ons. GOM/SLA TGC Ons. GOM/SLA TGC Actual Success 99% 73% 89% 1 2005 Plan price of $4.75/MMBtu 2 NYMEX strip at 12/30/05 53

2006 Drilling PVR on $5.50 Deck PVR on $8.00 Deck PVR on Strip Deck* Total PVR = 1.33 Total PVR = 1.84 Total PVR = 2.24 2.52 1.26 1.51 1.29 1.78 2.06 1.73 2.15 2.09 Ons. GOM/SLA TGC Predicted Success 98% 62% 83% Ons. GOM/SLA TGC Ons. GOM/SLA TGC *NYMEX strip at 12/30/05 54

Maintenance Burden Declining 100% 90% 80% Ratio of Maintenance Capex to Discretionary Cash Flow Lower Risk = Higher Value 94% 70% 60% 50% 40% 30% 20% 10% 45% 49% 57% 0% UPL WGR KWK PXP RRC SWN XTO NBL COG BR EOG EAC BBG APC APA AVG. SM SFY EP '06 CHK FST PXD ECA DVN PPP THX NFX EP '05 SGY KMG SKE VPI EP '04 WTI Source: Peers are 2006 estimates by JPM Equity Research, October 4, 2005; see Appendix for EP base assumptions 55

Portfolio of Opportunity Each region has a balanced inventory 2006: Solid program Beyond: Significant inventory Capital allocation decisions to meet key objectives Deliver predictable baseline results Continue shift to less risky production profile Retain exposure to high impact projects Result: Predictability plus growth 56