Enhanced Oil Recovery with CO 2 Presentation to the Wyoming Pipeline Authority July 25, 2006

1. Enhanced Oil Recovery with CO2Presentation to the Wyoming Pipeline AuthorityJuly 25, 2006 Presented by: Craig Walters Area Manager

2. Agenda • Overview of CO2 Enhanced Oil Recovery (EOR) • Wyoming CO2-EOR Assets • Anadarko Projects • Salt Creek, WY • Monell, WY • Linch, WY

3. # Projects CO2 EOR – A Mature Technology • Industry has over 30 years experience • Anadarko has been involved for 10 years, 3 in Wyoming • Operated in multiple basins • Over 80 projects in existence • Over 230,000 BBL/D due to CO2 injection Source: Oil & Gas Journal

4. Production Phase Recovery (% OOIP) Primary Production 6 – 15 % Waterflood 6 – 20 % 8 – 20 % Miscible CO2 Flood 20 – 65 % At certain temperatures and pressures, CO2 and oil will mix completely – termed miscible. Miscible fluids tend to prefer the same flow paths, resulting in more oil being swept to the producer. Produce Oil, Water & CO2 Inject CO2 How Miscible CO2 Flooding Works

5. CO2 EOR – Attributes • Benefits • Extends life of mature fields – increased production, long-life reserves • Low chance of complete technical failure • Environmentally friendly – sequestration of greenhouse gas • Challenges • Requires the “right” reservoir – rock, fluids, depth, size / OOIP • CO2 availability, cost and distance to pipeline • Significant, up-front capital investments with long payouts • Higher operating expenses – CO2 recycle • Access to resources – expertise, software, technology, goods / services • Future oil prices – Does anyone have a crystal ball?

6. LINCH - Future SALT CREEK 16” BAIROIL 20” 24” MONELL 16” Gas Fields Oil Fields 3rd Party CO2 Pipelines Anadarko CO2 Pipelines 3rd Party CO2-EOR Project Anadarko CO2-EOR Project Wyoming’s CO2 Source, Pipelines and Projects • Current CO2 Source • By-product of natural gas production @ La Barge (ExxonMobil) • Significant CO2 reserves (>100 TCF) • CO2 Infrastructure • ExxonMobil • ChevronTexaco • Anadarko • Anadarko’s Pipeline into Powder River Basin • 125 miles, 16 inch, 290 MMCFD max capacity • 2006 average volume: 50 MMCFD (Peak @ 130) • $45MM when constructed in 2003; $125MM today

7. Development Timeline Pilot WC2 Pilot Pilot WC2 WC2 Phases 3 & 4 Future Phases Phases 1 & 2 Phases 3 & 4 Phases 3 & 4 Phase 5 Phase 5 Pipeline Pipeline Pipeline 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Salt Creek Field – History • Discovered late 1800’s • OOIP 1,680 MMBO • Cumulative production 655 MMBO • APC acquired 2002: 99% WI • First CO2 injection Jan 2004 • Developed 15% of proved reserves • Expect to recover 10-15% OOIP • Sequester 490 BCF CO2 Completed In Progress Future Development

8. Salt Creek Field – Performance Current Rates 7,500 BOPD (Total) 4,300 BOPD (CO2 Flood) 140 MMCFD CO2 Injection 21,000 BOPD

9. PHASE 1 PHASE 3 PHASE 2 31 31 - - 10 10 Development Timeline Future Injector Future Producer Injector Producer Phase 1 Phase 2 Phase 3 CO2 Pilot, Reservoir Analysis, Simulation, Design Pipeline 2000 2002 2004 2006 2006 2008 Monell Unit – History • Discovered 1959 • OOIP 112 MMBO • Cumulative production 40 MMBO • 100% working interest • First CO2 injection Sept 2003 • Completed 1 of 3 phases • Expect to recover 20-25% OOIP • Sequester 150 BCF CO2

10. Monell Unit – Performance Current Rates 3,000 BOPD 33 MMCFD CO2 Injection 15,000 BOPD

11. CO2 Purchases

12. Summary • CO2-EOR is a mature technology • Wyoming has 3 key ingredients for future growth • Amenable field characteristics • Significant CO2 reserves at La Barge – can be utilized for EOR • Good start to pipeline infrastructure • Be prepared / Proceed with caution • Significant up-front capital investments – long term projects • Do your homework • Anadarko’s Wyoming projects have been successful • Questions??