Outlook

Our exploration and production business delivered consistent growth throughout 2006, a positive trend we see continuing this year. We will remain focused on creating value through our drilling program and strategic acquisitions.

During 2007, we intend to:

• Produce between 800 and 860 million cubic feet equivalent per day, including our proportionate share of Four Star volumes, representing a 4% increase over 2006 production levels
• Continue to emphasize lower-risk onshore drilling projects, with some additional higher-risk, higher return opportunities
• Increase our capital program to $1.7 billion, while carefully monitoring the performance of our capital
• Increase our proved reserves by 1%-5%

*Cautionary Statement Regarding Forward-looking Statements