loews Highmount Parker

Loews Investor MeetingHighMount E&P

Loews Investor MeetingLoews Investor Meeting

HighMount E&PHighMount E&P

Tim ParkerNovember 5, 2008

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��The Fundamental QuestionsThe Fundamental Questions

��The AssetsThe Assets

��The StrategyThe Strategy

HighMount E&PHighMount E&PThis PresentationThis Presentation

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�� Why Natural Gas?Why Natural Gas?

�� Under any scenario for future U.S. Energy and Under any scenario for future U.S. Energy and Environmental policy, we believe North Environmental policy, we believe North American natural gas will be an American natural gas will be an ““advantagedadvantaged””and growing part of U.S. supplyand growing part of U.S. supply

�� We believe that natural gas prices will benefit We believe that natural gas prices will benefit from that advantagefrom that advantage

�� While we expect volatility in energy markets, While we expect volatility in energy markets, we believe that natural gas prices will be we believe that natural gas prices will be distinctly higher over intermediate and long distinctly higher over intermediate and long term time periodsterm time periods

HighMount E&PHighMount E&PThe Fundamental QuestionsThe Fundamental Questions

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��Why HighMount E&P?Why HighMount E&P?

�� Long life, high margin gas reserves with Long life, high margin gas reserves with significant upside acquired at a significant upside acquired at a veryveryattractive price ($1.61/MCFE)attractive price ($1.61/MCFE)

�� An established and experienced workforce An established and experienced workforce and management team to continue running and management team to continue running an attractive natural gas businessan attractive natural gas business

�� A platform from which to grow in A platform from which to grow in ““natural natural gas spacegas space”” as conditions and opportunities as conditions and opportunities meritmerit

HighMount E&PHighMount E&PThe Fundamental QuestionsThe Fundamental Questions

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�� Reserves*: ProvedReserves*: Proved 2.5 TCFE2.5 TCFE% Natural Gas 77%

% NGL’s 22%

“3P” 4.7 TCFE

�� Daily Production: ~ 300 MMCFEDDaily Production: ~ 300 MMCFED

�� Q4 '07 Q4 '07 -- Q3 '08 Net Income:Q3 '08 Net Income: $181.1 MM$181.1 MM

�� Employees: Employees: 650650

HighMount E&PHighMount E&PThe Assets The Assets –– The NumbersThe Numbers

* As of 12/31/07

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��A Natural Gas FranchiseA Natural Gas Franchise

��Natural Gas (>99%)Natural Gas (>99%)

�� Long Life (>20 years)Long Life (>20 years)

�� Low Operating CostsLow Operating Costs

��High MarginsHigh Margins

��Additional opportunity Additional opportunity for growth/value creationfor growth/value creation

HighMount E&PHighMount E&PThe AssetsThe Assets

Oklahoma City

Oklahoma City

HoustonHouston

MICHIGANMICHIGAN

SONORASONORA

BLACKWARRIOR

BLACKWARRIOR

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HIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTS

�� Dominant position in a Dominant position in a ““Top 20Top 20””U.S. Gas FieldU.S. Gas Field

�� > 400 wells drilled per year> 400 wells drilled per year

�� > 10,000 locations to drill> 10,000 locations to drill

�� Field Level LOE < $0.65/MCFEField Level LOE < $0.65/MCFE

Sonora Field

Sonora Field

HighMount E&PHighMount E&PThe Assets The Assets –– Sonora FieldSonora Field

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Reservoir SummaryAverage Porosity: 4-10%Average Perm.: .01-.1 mdAverage Sw: 35-65%Apparent Drainage: <20 acres

CROCKETT SCHLEICHER

SUTTON

EDWARDS

SONORA FIELD

SONORA FIELD

Sonora

60 Miles

VAL VERDE


PennsylvanianDeep WaterSands

PennsylvanianShallow WaterLimestones

OrdovicianKarstedDolomites

Field SummaryOGIP: > 20 TCFCumulative Production: ________

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0

BC

F p

er

ye

ar

10

20

30

40

50

60

70

80

90

100

1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005

�� Sonora is a unique major gas field with peak production at Sonora is a unique major gas field with peak production at more than 50 years after discoverymore than 50 years after discovery

Total

“HighMount”

�� From 1992 to 2006 HighMountFrom 1992 to 2006 HighMount’’s predecessors have built s predecessors have built ““THETHE””dominant position in the fielddominant position in the field


10

0

100

200

300

400

500

600

1994 1996 1998 2000 2002 2004 2006 2008

HighMount & predecessors have drilled:• >4,400 wells• >6,500 miles of hard rock drilling


““HighMountHighMount”” Wells DrilledWells Drilled

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Drilling Performance*

91 91 9185

81 81 81 8177 75

107

123

130126

133

50

60

70

80

90

100

110

120

130

140

150

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Rota

ting H

ours

*Rotating Hours to 8500’

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50%

60%

70%

80%

90%

100%

1994 2003 2007


HighMount Well Costs Compared to Other Operators *HighMount Well Costs Compared to Other Operators *

* Comparison of “vintage” well costs - capital costs only.

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�� Top 3 CBM producer in basinTop 3 CBM producer in basin

�� LowLow--risk, longrisk, long--life reserve baselife reserve base

�� Drilling inventory of more than Drilling inventory of more than 250 locations250 locations

�� Infrastructure Infrastructure ““advantagedadvantaged””compared to many operatorscompared to many operators

HighMount E&PHighMount E&PThe Assets The Assets –– Black Warrior BasinBlack Warrior Basin

Alabama

BlackWarrior

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�� Top 3 producer in MichiganTop 3 producer in Michigan

�� ~ 50 wells drilled per year~ 50 wells drilled per year

�� > 750 locations to drill> 750 locations to drill

�� Experienced and long term staffExperienced and long term staff

Michigan

TraverseCity

Lewiston

HighMount E&PHighMount E&PThe Assets The Assets –– Antrim ShaleAntrim Shale

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�� HighMount assets have substantial remaining gas HighMount assets have substantial remaining gas potential after all proved, probable and possible potential after all proved, probable and possible reserves have been recoveredreserves have been recovered

�� An ongoing focus for HighMount technical efforts An ongoing focus for HighMount technical efforts is to commercialize those potential reservesis to commercialize those potential reserves

�� Future potential includes projects focused on Future potential includes projects focused on advanced drilling and completion technologies, advanced drilling and completion technologies, next generation shale projects, enhanced facilities next generation shale projects, enhanced facilities designs, further infill drilling, CBM recovery designs, further infill drilling, CBM recovery enhancement, etcenhancement, etc

HighMount E&PHighMount E&PThe Assets The Assets –– Upside PotentialUpside Potential

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�� DayDay--toto--day focus is on maximizing long term value by:day focus is on maximizing long term value by:

�� Delivering real and meaningful operational excellenceDelivering real and meaningful operational excellence

��Managing costs throughout companyManaging costs throughout company

�� Delivering real, ongoing financial returnsDelivering real, ongoing financial returns

�� Strategically, we believe we will grow by:Strategically, we believe we will grow by:

�� Investing in our existing assets and maximizing their Investing in our existing assets and maximizing their

valuevalue

�� Adding additional assets in our current core areas at very Adding additional assets in our current core areas at very

attractive valuesattractive values

�� Adding additional core areas when they represent special Adding additional core areas when they represent special

values and fit the values and fit the ““HighMountHighMount”” modelmodel

HighMount E&PHighMount E&PStrategyStrategy

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��We believe HighMount will become a company that is:We believe HighMount will become a company that is:

�� Financially and operationally disciplined delivering Financially and operationally disciplined delivering

dependable and meaningful earnings and net cash flowdependable and meaningful earnings and net cash flow

�� Recognized for operational expertise in unconventional Recognized for operational expertise in unconventional

gas reservoirsgas reservoirs

�� Poised for growth when the right opportunities emergePoised for growth when the right opportunities emerge

�� DifferentDifferent

HighMount E&PHighMount E&PThe FutureThe Future

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HighMount E&PHighMount E&PForwardForward--Looking Statements DisclaimerLooking Statements DisclaimerStatements made at this conference or in the materials distributed in conjunction with this conference that contain

"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 include, but

are not limited to, statements using the words “believe”, “expect”, “plan”, “intend”, “anticipate”, “estimate”, “should”

and similar expressions, as well as other statements concerning the presenting companies' future plans, objectives,

and expected performance. Such statements are inherently subject to a variety of risks and uncertainties that could

cause actual results to differ materially from those projected.

Forward-looking statements speak only as of the date they are made, and each of the companies presenting at this

conference expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any

forward-looking statement to reflect any change in their expectations with regard thereto or any change in events,

conditions or circumstances on which any such statement is based.

Important risk factors that could cause the actual results for each of the companies discussed during this conference

today to differ from those expressed in forward-looking statements are discussed in detail in the annual and quarter

reports and other filings made with the Securities and Exchange Commission by Loews Corporation and its

subsidiaries, CNA Financial Corporation, Diamond Offshore Drilling, Inc. and Boardwalk Pipeline Partners, LP.

Copies of these reports are available, as applicable, at the corporate websites of Loews Corporation at

www.loews.com and such subsidiaries at www.cna.com, www.diamondoffshore.com and www.bwpmlp.com, or at

the SEC’s website at www.sec.gov. Given the risk factors discussed in these filings, investors and analysts should

not place undue reliance on forward-looking statements.

loews Highmount Parker

Economy & Finance

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