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									HEFG/IPAA Capital Markets Breakfast


August 9, 2007
Summary of the Leveraged Bank Markets


   With treasuries at historically low levels, overall                                                 Number of Active Bank Investors and Market Share
     rates remain attractive though market depth will
     likely be challenged over the next several weeks.                                                125                                                                                            100%
                                                                                                                                                                    Active Lenders
                                                                                                                                                                    Bank Market Share
   While the market for larger financings that require




                                                                                                                                                                                                            Pro Rata Lender Market Share
                                                                                                      100                                                                                            80%




                                                                            Active Pro Rata Lenders
     institutional participation for successful execution is
                                                                                                       75                                                                                            60%
     effectively closed, financings that are distributed
     exclusively to traditional bank investors remain                                                  50                                                                                            40%
     viable.
      Number of banks participating in the syndicated
                                                                                                       25                                                                                            20%


         loan market is at highest level since 1999.                                                    0                                                                                            0%




                                                                                                          96


                                                                                                                 97


                                                                                                                        98


                                                                                                                               99


                                                                                                                                      00


                                                                                                                                             01


                                                                                                                                                     02


                                                                                                                                                            03


                                                                                                                                                                   04


                                                                                                                                                                           05


                                                                                                                                                                                  06


                                                                                                                                                                                            07
   Wachovia expects pricing on all bank or “pro rata”




                                                                                                        19


                                                                                                               19


                                                                                                                      19


                                                                                                                             19


                                                                                                                                    20


                                                                                                                                           20


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                                                                                                                                                                         20


                                                                                                                                                                                20


                                                                                                                                                                                           /
                                                                                                                                                                                        30
                                                                                                                                                                                       6/
                                                                                                                                                                                   M
                                                                                                                                                                                 LT
     deals to ultimately follow the broader market;
     however, we believe there may now be a limited            Source: Wachovia Securities and S&P/LCD

     window for certain issuers to lock in relatively
     attractive terms.                                                                                                Pro Rata BB and B Pricing Averages

                                                                                           500
                                                                                                                                                                            BB/ BB-                B+/ B

                                                                                           400
                                                                   LIBOR+




                                                                                           300

                                                                                                                                                                                                           263.5
                                                                                           200
                                                                                                                                                                                                           178.1

                                                                                           100
                                                                                                       8


                                                                                                                9


                                                                                                                         0


                                                                                                                                    1


                                                                                                                                           2


                                                                                                                                                     3


                                                                                                                                                             4


                                                                                                                                                                        5


                                                                                                                                                                                6


                                                                                                                                                                                               7
                                                                                     '9


                                                                                                              '9


                                                                                                                        '0


                                                                                                                               '0


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                                                                                                                                                    '0


                                                                                                                                                            '0


                                                                                                                                                                    '0


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                                                                                   1Q


                                                                                                            1Q


                                                                                                                      1Q


                                                                                                                             1Q


                                                                                                                                        1Q


                                                                                                                                                  1Q


                                                                                                                                                          1Q


                                                                                                                                                                  1Q


                                                                                                                                                                            1Q


                                                                                                                                                                                       1Q
                                                               Source: Wachovia Securities and S&P/LCD


                                                                                                                                               HEFG/IPAA Capital Markets Breakfast                                                         2
Leveraged Loan Market Conditions

 The leveraged/non-investment grade loan market is in the                                             Institutional Loan Default Rate by Number of Issuers
  midst of an unprecedented technical correction.
     Fundamentals remain strong with default rates at low            10%

      levels.
                                                                        8%
 The correction is driven primarily by a liquidity crisis in the
  market for collateralized loan obligations (“CLOs”), structured       6%
  vehicles set up to invest principally in floating rate, secured
  “bank” debt.                                                          4%
                                                                                                                                                                                                      3.23%
     Record leverage multiples for LBOs and aggressive
                                                                        2%
      covenant-lite structures, as well as concerns surrounding
      the sub-prime mortgage market, raised doubts about the                                                                                                                                          0.29%
                                                                        0%
      soundness of CLO/CDO financing vehicles.                           1998                                    1999       2000        2001         2002       2003      2004     2005     2006

     Rating agencies issued across the board downgrades on             Source: Wachovia Securities and S&P/LCD
      the debt of many of these structured vehicles.
                                                                                                                  Loan Forward Calendar vs. CLO Issuance
     CLO/CDO bond issuance to fund the purchase of assets
      (bank loans, sub-prime mortgages, etc.) has dried up and                                         $300                                                                                          $15
                                                                                                                         Loan Forward Pipeline
      new issuance is expected to be limited for the                                                                     CLO Issuance
      foreseeable future.                                                                              $250
                                                                                                                                                                                                     $12



                                                                         Forward Pipeline (Billions)
     Underwriters of CLO paper have also hampered liquidity




                                                                                                                                                                                                           CLO Issuance (Billions)
                                                                                                       $200

      by restricting the availability of “warehouse” credit lines.                                                                                                                                   $9

                                                                                                       $150
 With little liquidity among institutional investors and a record                                                                                                                                   $6
  forward calendar, the market is in a state of grid lock with                                         $100

  widespread uncertainty regarding the direction of the market                                                                                                                                       $3
  in the 4th quarter.                                                                                   $50



     Underwriters have had to fund a large number of                                                    $0                                                                                          $0
                                                                                                              Jun-05    Sep-05   Dec-05     Mar-06     Jun-06    Sep-06   Dec-06   Mar-07   Jun-07
      underwritten financings on their own balance sheets as
      they have been unable to attract any meaningful interest
      from potential investors.                                      Source: Wachovia Securities and S&P/LCD

                                                                                                                                           HEFG/IPAA Capital Markets Breakfast                                        3
Leveraged Loan Market Conditions

                                     LCDX* Price / Spread                                                                                                                  Discounted Spread

          102                                                                                               400                     L+400
                                                                                           Price                                                          B

                                                                                           Spread                                                         BB
          100                                                                                               350                     L+350
                                                                                                                                                                                                                       338.8


           98                                                                                               300
                                                                                                                                    L+300




                                                                                                                     Spread (bps)
  Price




           96                                                                                               250                                                                                                        267.9
                                                                                                                                    L+250

           94                                                                                               200

                                                                                                                                    L+200
           92                                                                                               150


                                                                                                                                    L+150
           90                                                                                               100
                                                                                                                                            5/ 31       6/ 7       6/ 14        6/ 21   6/ 28   7/ 5   7/ 12   7/ 19
                5/ 22   6/ 1         6/ 12          6/ 21         7/ 2             7/ 12            7/ 23


 Source: Wachovia Securities and Markit; *Index of 100 loan credit default swaps                                                    Source: Wachovia Securities and S&P/LCD


                               Average Cash Loan Levels                                                                                                            Secondary Trading Levels

   103
                         Ask                                                                                                         L+400
                         Bid


   101                                                                                                                               L+350



                                                                                                                                     L+300
      99

                                                                                                                                     L+250

      97
                                                                                                                  96.6               L+200


                                                                                                                  95.4
      95                                                                                                                             L+150
                                                                                                                                      De 1

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                                                                                                                                           07
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      07




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 Source: Wachovia Securities and S&P/LCD                                                                                            Source: Wachovia Securities and S&P/LCD


                                                                                                                                                                              HEFG/IPAA Capital Markets Breakfast       4
High Yield Market Conditions

                                                                                                                                  10-Year Treasury Yield
    The high yield market has also been pressured with
                                                                                           10%
            secondary spreads and new issue premiums widening.                                                                                                                           10 Year Treasury
                                                                                               9%                                                                                        20 Year Average
             The secondary market was down for the 9th week in
                                                                                               8%
                 a row with yields on BB and B indices widening 31
                 bps and 49 bps, respectively, last week.                                      7%




                                                                                       Yield
                                                                                                                                                                                                                 6.26%
             Despite this, with treasuries at historically low levels,                        6%


                 overall rates remain historically attractive though                           5%
                                                                                                                                                                                                                 4.79%
                 market depth will probably be challenged over the                             4%
                 next several weeks.
                                                                                               3%




                                                                                            87

                                                                                            88

                                                                                            89

                                                                                            90

                                                                                            91

                                                                                            92

                                                                                            93

                                                                                            94

                                                                                            95

                                                                                            96

                                                                                            97

                                                                                            98

                                                                                            99

                                                                                            00

                                                                                            01

                                                                                            02

                                                                                            03

                                                                                            04

                                                                                            05

                                                                                            06

                                                                                            07
                                                                                          19

                                                                                          19

                                                                                          19

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                                                                                          19

                                                                                          19

                                                                                          19

                                                                                          19

                                                                                          20

                                                                                          20

                                                                                          20

                                                                                          20

                                                                                          20

                                                                                          20

                                                                                          20

                                                                                          20
                                                                                           Source: Bloomberg L.P.


                                       BB High Yield Index                                                                             B High Yield Index

           14%                                                                                     20%
                                                             BB HY Index                                                                                                                      B HY Index
           13%
                                                             20 Year Average                       18%                                                                                        20 Year Average
           12%
                                                                                                   16%
           11%

           10%                                                                             Yield   14%
   Yield




           9%                                                                  9.27%
                                                                                                   12%
                                                                                                                                                                                                                11.34%
           8%                                                                  7.87%
                                                                                                   10%
           7%                                                                                                                                                                                                   8.89%
                                                                                                   8%
           6%

           5%                                                                                      6%
                                                                                                    87
                                                                                                         88
                                                                                                              89

                                                                                                                   90
                                                                                                                        91
                                                                                                                             92
                                                                                                                                  93
                                                                                                                                       94
                                                                                                                                            95

                                                                                                                                                 96
                                                                                                                                                      97
                                                                                                                                                           98
                                                                                                                                                                99
                                                                                                                                                                     00
                                                                                                                                                                          01
                                                                                                                                                                               02

                                                                                                                                                                                    03
                                                                                                                                                                                         04
                                                                                                                                                                                              05
                                                                                                                                                                                                   06
                                                                                                                                                                                                        07
             87

             88

             89

             90

             91

             92

             93

             94

             95

             96

             97

             98

             99

             00

             01

             02

             03

             04

             05

             06

             07




                                                                                                   19
                                                                                                        19
                                                                                                             19

                                                                                                                  19
                                                                                                                       19
                                                                                                                            19
                                                                                                                                 19
                                                                                                                                      19
                                                                                                                                           19

                                                                                                                                                19
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                                                                                                                                                                              20

                                                                                                                                                                                   20
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                                                                                                                                                                                             20
                                                                                                                                                                                                  20
                                                                                                                                                                                                       20
           19

           19

           19

           19

           19

           19

           19

           19

           19

           19

           19

           19

           19

           20

           20

           20

           20

           20

           20

           20

           20




  Source: Merrill Lynch Global Index System                                                    Source: Merrill Lynch Global Index System



                                                                                                                                           HEFG/IPAA Capital Markets Breakfast                                    5
High Yield Market Conditions


                                                                                          Historical Market Performance

                9.0%                                                                                                                                              101
                                                    LCDX Price

                8.5%


                                                                                                                                                                  99
                8.0%


                              B Index Yield
                7.5%

                                                                                                                                                                  97
                7.0%
        Yield




                                                                                                                                                                        Price
                6.5%
                                                                                                                                                                  95

                6.0%



                5.5%
                                                                                                                                                                  93


                5.0%          10 Year Treasury Yield



                4.5%                                                                                                                                              91
                       5/ 1                 5/ 10                   5/ 21               5/ 31      6/ 11     6/ 20        6/ 29        7/ 11        7/ 20
  Source: Markit, Merrill Lynch Global Index System and Wachovia Securities Analysis.
  Note: LCDX Index was launched on 5/22/2007.



                                                                                                                                  HEFG/IPAA Capital Markets Breakfast           6
High Yield Market Conditions


                                    Representative Upstream Bond Performance vs. Broader Market


                                                                                                                                                    D YTW
                                                                                                                                                  6/1 – 7/27

              9.00%                                                                                                                       8.89%    145 bps


                                                                                                                                          8.88%    177 bps
              8.50%


                                                                                                                                          7.87%    110 bps
              8.00%
                                                                                                                                          7.85%    113 bps

                                                                                                                                          7.70%    117 bps
      (YTW)




              7.50%



              7.00%



              6.50%



              6.00%
                  6/ 1/ 07   6/ 8/ 07      6/ 15/ 07     6/ 22/ 07      6/ 29/ 07   7/ 6/ 07     7/ 13/ 07      7/ 20/ 07     7/ 27/ 07

                             BB Index                                                 B Index
                             Chesapeake Energy 6.5% Sr. Notes due 2017                Newfield Exploration 6.625% Sr. Sub. Notes due 2016
                             Plains Exploration 7% Sr. Notes due 2017




                                                                                                             HEFG/IPAA Capital Markets Breakfast               7
High Yield Market Conditions


                                       Representative Midstream Bond Performance vs. Broader Market


                                                                                                                                                D YTW
                                                                                                                                              6/1 – 7/27

             9.00%                                                                                                                    8.89%    145 bps

                                                                                                                                      8.58%    101 bps

             8.50%                                                                                                                    8.55%    120 bps

                                                                                                                                      8.29%     98 bps


             8.00%
                                                                                                                                      7.87%    110 bps


                                                                                                                                      7.74%    130 bps
     (YTW)




             7.50%



             7.00%



             6.50%



             6.00%
                 6/ 1/ 07   6/ 8/ 07       6/ 15/ 07   6/ 22/ 07   6/ 29/ 07   7/ 6/ 07     7/ 13/ 07     7/ 20/ 07       7/ 27/ 07

                               BB Index                                        B Index
                               Markwest 8.5% Sr. Notes due 2016                Williams 7.25% Sr. Notes due 2017
                               Copano 8.125% Sr. Notes due 2016                Atlas Pipeline 8.125% Sr. Notes due 2015




                                                                                                        HEFG/IPAA Capital Markets Breakfast                8
High Yield RVA: Upstream




   Comparable High Yield Issuers

   ($ in Millions)
                                                            Issue                                                Next Call                      June 1, 2007                   July 31, 2007          D
   Issuer                                   Security       Amount    Coupon   Rating      Maturity       Date                Price     Price       YTW         STW    Price        YTW         STW   STW

   Upstream
   Berry Petroleum Co                    Sr. Sub. Notes   $200.0     8.250%    B3/ B     11/ 01/ 16   11/ 01/ 11         104.125      102.375     7.82%        286    96.500      8.81%        404   118

   Chesapeake Energy                       Sr. Notes      $1,100.0   6.500%   Ba2/ BB    08/ 15/ 17       Make Whole T+50              98.750     6.67%        165    92.250      7.62%        280   115

   Compton Petroleum Corporation           Sr. Notes      $450.0     7.625%    B2/ B     12/ 01/ 13   12/ 01/ 09         103.813      101.000     7.36%        243    93.500      8.99%        436   193

   Comstock Resources, Inc.                Sr. Notes      $175.0     6.875%    B2/ B     03/ 01/ 12   03/ 01/ 08         103.438       97.750     7.44%        251    92.500      8.90%        433   182

   Denbury Resources Inc                 Sr. Sub. Notes   $225.0     7.500%   B1/ B+     04/ 01/ 13   04/ 01/ 08         103.750      103.000     6.92%        200    96.000      8.17%        344   144
                                         Sr. Sub. Notes   $150.0     7.500%   B1/ B+     12/ 15/ 15   12/ 15/ 10         103.750      102.500     6.74%        182    97.250      8.11%        353   171

   Encore Acquisition Co                 Sr. Sub. Notes   $150.0     6.250%    B1/ B     04/ 15/ 14   04/ 15/ 09         103.125       91.250     7.46%        249    86.000      8.45%        372   123
                                         Sr. Sub. Notes   $300.0     6.000%    B1/ B     07/ 15/ 15   07/ 15/ 10         103.000       92.750     7.63%        268    87.000      8.86%        420   152
                                         Sr. Sub. Notes   $150.0     7.250%    B1/ B     12/ 01/ 17   12/ 01/ 10         103.625       96.250     7.78%        275    90.000      8.74%        391   116

   Newfield Exploration Co.              Sr. Sub. Notes   $550.0     6.625%   Ba3/ BB-   04/ 15/ 16   04/ 15/ 11         103.310      100.500     6.53%        159    94.500      7.50%        273   114

   Plains Exploration & Production Co.     Sr. Notes      $500.0     7.000%   B1/ BB-    03/ 15/ 17   03/ 15/ 12         103.500       99.250     7.11%        213    89.250      8.67%        391   178

   Quicksilver Resources                 Sr. Sub. Notes   $350.0     7.125%    B1/ B     04/ 01/ 16   04/ 01/ 11         103.563       99.250     7.24%        227    92.750      8.31%        356   129

   Range Resources                       Sr. Sub. Notes   $200.0     7.375%    B1/ B     07/ 15/ 13   07/ 15/ 08         103.688      103.000     6.53%        159    99.500      7.48%        287   128
                                         Sr. Sub. Notes   $150.0     6.375%    B1/ B     03/ 15/ 15   03/ 15/ 10         103.188       98.500     6.62%        165    93.000      7.60%        288   123
                                         Sr. Sub. Notes   $250.0     7.500%    B1/ B     05/ 15/ 16   05/ 15/ 11         103.750      104.250     6.72%        177    98.250      7.78%        301   124

   Southwestern Energy Company             Sr. Notes       $60.0     7.625%   Ba3/ BB-   05/ 01/ 27    Putable           Putable      102.449     7.39%        223   102.875      7.35%        234   11

   Whiting Petroleum Corp                Sr. Sub. Notes   $150.0     7.250%    B1/ B     05/ 01/ 12   05/ 01/ 08         103.625       97.750     7.81%        287    94.500      8.68%        410   123
                                         Sr. Sub. Notes   $220.0     7.250%    B1/ B     05/ 01/ 13   05/ 01/ 09         103.625       97.500     7.78%        287    93.500      8.71%        412   125
                                         Sr. Sub. Notes   $250.0     7.000%    B1/ B     02/ 01/ 14     Bullet               Bullet    96.750     7.63%        270    93.500      8.32%        366   96

                                                                                                      Average                          99.201     7.22%        226    93.822      8.26%        355   130




Source: Advantage Data & Bloomberg



                                                                                                                                                   HEFG/IPAA Capital Markets Breakfast                     9
High Yield RVA: Midstream




   Comparable High Yield Issuers

   ($ in Millions)
                                                  Issue                                               Next Call                      June 1, 2007                   July 31, 2007          D
   Issuer                            Security    Amount   Coupon    Rating     Maturity       Date                Price     Price       YTW         STW    Price        YTW         STW   STW

   Midstream MLP
   Williams Partners L.P.            Sr. Notes   $600.0   7.250%   Ba3/ BB+   02/ 01/ 17     Bullet               Bullet   107.750     6.83%        171   101.500      7.43%        253   82

   Holly Energy Partners, L.P.       Sr. Notes   $185.0   6.250%    B1/ B+    03/ 01/ 15   03/ 01/ 10         103.125       96.500     6.84%        187    90.500      7.94%        322   135

   MarkWest Energy Partners, L.P.    Sr. Notes   $225.0   6.875%    B2/ B     11/ 01/ 14   11/ 01/ 09         103.438       98.000     7.23%        227    93.000      8.17%        348   121
                                     Sr. Notes   $275.0   8.500%    B2/ B     07/ 15/ 16   07/ 15/ 11         104.250      105.000     7.58%        262   100.000      8.50%        382   120

   Copano Energy, L.L.C.             Sr. Notes   $225.0   8.125%    B2/ B+    03/ 01/ 16   03/ 01/ 11         104.063      104.250     7.31%        237   100.000      8.12%        347   110

   Atlas Pipeline Partners, L.P.     Sr. Notes   $250.0   8.125%    B2/ B+    12/ 15/ 15   12/ 15/ 10         104.063      104.000     7.34%        242    98.500      8.38%        364   122

   Regency Energy Partners L.P.      Sr. Notes   $550.0   8.375%    B2/ B     12/ 15/ 13   12/ 15/ 13         104.188      103.500     7.59%        269   103.000      7.68%        313   44

   SemGroup, L.P.                    Sr. Notes   $600.0   8.750%    B1/ NR    11/ 15/ 15   11/ 15/ 10         104.375      104.500     7.85%        293    98.500      9.01%        426   133

                                                                                           Average                         102.938     7.32%        236    98.125      8.15%        344   108




Source: Advantage Data & Bloomberg



                                                                                                                                        HEFG/IPAA Capital Markets Breakfast                     10
Upstream MLP Yields Since IPO Date

  For upstream assets with the appropriate reserve profile, an upstream MLP IPO offers a compelling alternative for the
   monetization of oil and gas assets.
     C-corps are likely to face increasing competition for long-lived reserves from tax-advantaged flow-through
      vehicles.
     Emergence is similar to historical trends in the midstream market and in the Canadian E&P market.
  Wachovia has been involved in all but one upstream MLP/LLC IPO completed to date.



                                                                                                           Upstream MLP/LLC Distribution Yields Since 1/13/2006

   9.50%
                                                                                                                                                                                                    Breitburn Energy
                                                                                                   Linn Energy                                                                                                    Constellation Energy Legacy Reserves
   8.50%
                                                                                                                                                                                                                                                   Atlas Energy
   7.50%                                                                                                                                                                            EV Energy


   6.50%

   5.50%

   4.50%


   3.50%
                         2/ 3/ 2006




                                                                  4/ 7/ 2006




                                                                                                           6/ 9/ 2006




                                                                                                                                                                       9/ 1/ 2006




                                                                                                                                                                                                                                                                  1/ 5/ 2007




                                                                                                                                                                                                                                                                                                              3/ 9/ 2007




                                                                                                                                                                                                                                                                                                                                                                     6/ 1/ 2007




                                                                                                                                                                                                                                                                                                                                                                                                              8/ 3/ 2007
           1/ 13/ 2006




                                      2/ 24/ 2006


                                                    3/ 17/ 2006




                                                                               4/ 28/ 2006


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                                                                                                      Linn Energy                     EV Energy                      Breitburn Energy                               Constellation Energy                              Atlas Energy                          Legacy Reserves




                                                                                                                                                                                                                                                                                                           HEFG/IPAA Capital Markets Breakfast                                                                             11
Upstream MLPs/LLCs Have Been Active Acquirers

       MLP/LLCs tend to purchase properties with high reserve to production ratios and significant PDP components.
       The highlighted rows represent transactions where the buyer is an MLP or has announced it is contemplating an MLP
            formation.




                                                                                                    Recent Upstream Acquisition Activity
 As of 07/ 31/ 07


                                                                                                                    Proved
                                                                                                    Transaction    Reserves    Production
       Announced                                                                                       Value         Value        Value
         Date              Buyers                               Sellers                                ($MM)       ($/ Mcfe)   ($/ Mcfe/ d)   % Gas    R/ P    Key Assets
         7/ 17/ 2007      Plains Exploration & Production Co.   Pogo Producing Co.                      $3,740.1       $2.48      $11,425      65.0%   12.6x   Producing assets: Mid-Continent, Rockies, and Gulf Coast regions
          7/ 2/ 2007      Linn Energy LLC                       Dominion Resources Inc.                  2,050.0        2.09       12,627      93.0%   16.5x   Producing properties in Oklahoma the Texas Panhandle and Kansas
         6/ 21/ 2007      McMoRan Exploration Co.               Newfield Exploration Co.                 1,100.0        3.36        4,074      70.0%    3.3x   Producing properties: GoM shelf region; operated stake in Treasure Island deep gas prospect
          6/ 4/ 2007      Loews Corp.                           Dominion Resources Inc.                  4,025.0        1.31       12,460      77.0%   26.0x   Producing reserves: Texas Permian Basin, Michigan Antrim Shale, Alabama Black Warrior Basin
          6/ 4/ 2007      XTO Energy Inc.                       Dominion Resources Inc.                  2,500.0        1.69        8,937      95.0%   14.5x   Producing properties: Rocky Mountains, San Juan Basin, and South Texas
         5/ 20/ 2007      Atlas Energy Resources LLC            DTE Energy Co.                           1,258.0        2.01       20,871     100.0%   28.5x   Producing properties in the Antrim Shale in northern Michigan
         5/ 14/ 2007      Newfield Exploration Co.              Stone Energy Co.                           577.9        2.63       13,135      70.0%   13.7x   Producing properties and acreage throughout the Rocky Mountains region
          5/ 1/ 2007      Occidental Petroleum Corp.            BP plc                                     550.0         NA            NA        NA      NA    Oil and gas interest in the Seminole San Andres Unit Sheep Mountain in Permian Basin
          5/ 1/ 2007      BP plc                                Occidental Petroleum Corp.                 550.0         NA            NA        NA      NA    One third interest in Horn Mountain property located in the Gulf of Mexico
         4/ 30/ 2007      Eni SpA                               Dominion Resources Inc.                  4,730.0        4.47        9,669      48.0%    5.9x   GoM deepwater and shelf producing properties development grade assets and exploratory acreage
         4/ 18/ 2007      Plains Exploration & Production Co.   Laramie Energy LLC                         945.4        2.13       22,692      97.0%   29.2x   Colorado Piceance Basin gas weighted producing properties
         4/ 16/ 2007      EV Energy Partners LP                 Anadarko Petroleum Corp.                   728.0        1.98           NA      52.0%     NA    Texas Austin Chalk producing properties
         3/ 12/ 2007      Nippon Oil; Mitsubishi Corp.          Anadarko Petroleum Corp.                 1,200.0         NA            NA        NA      NA    23.2% working interest in deepwater K2 Unit in Gulf of Mexico
          2/ 2/ 2007      EXCO Resources Inc.                   Anadarko Petroleum Corp.                   860.0        2.13        8,285      87.0%   10.6x   Natural gas-weighted reserves in Oklahoma and Texas
         1/ 18/ 2007      Apache Corp.                          Anadarko Petroleum Corp.                 1,000.0        2.36       13,567      18.5%   15.8x   Controlling stakes in 28 West Texas Permian Basin fields - oil weighted production
          1/ 7/ 2007      Forest Oil Corp.                      The Houston Exploration Co.              1,827.5        2.42        7,844      96.0%    8.9x   Lower 48 producing properties concentrated in the Mid-Continent and Rockies regions


                                                                Comparable Transactions - Jan-07 - Jul-07
                                                                High (Average of values > median)                      $2.95      $15,892      94.7%   21.8x
                                                                Median                                                  2.13        11,942     77.0%   14.1x
                                                                Low (Average of values < median)                        1.91         8,372     57.2%    9.2x

    Source: John S. Herold, Inc. and public information.




                                                                                                                                                                                     HEFG/IPAA Capital Markets Breakfast                                       12
Volumetric Production Payment

                       Overview of a VPP                                    Transaction Description

    A VPP is a limited term overriding royalty interest    The VPP Seller sells a VPP to a Wachovia entity.
     in oil and gas reserves.                                In addition to the conveyance, the Wachovia
    The VPP entitles the purchaser to receive               entity records a mortgage on the reserves.
     scheduled production volumes over a specific           The VPP Seller (or the existing operator)
     time period from specific lease interests.              continues to operate the properties.
    The VPP guarantees first priority on a specific                         VPP and related production
     volume of production from specific lease                                                             Wachovia
                                                               VPP Seller
     interests.                                                              Cash (VPP purchase price)
    A VPP is free and clear of all operating costs,
     capital expenditures and taxes.
                       Acquisition VPP                                         Monetization VPP

   The VPP transaction can also be used in                 The VPP can be used as a monetization vehicle
     conjunction with an acquisition.                        through which the oil and natural gas producers sells a
   The VPP is put in place with the seller of the           term royalty in the reserves it already owns.
     property before the property purchaser buys the        The VPP Seller would not book the VPP reserves.
     reserves (burdened by the VPP).
                                                            The VPP would be disclosed in the footnotes to the
   The VPP Seller (property purchaser) would book           financial statements.
     the cushion reserves, LOE reserves, tail reserves
     and all upside.
                                                            With a Monetization VPP, the VPP volumes would most
                                                             likely be reflected as Deferred Revenue.
   The VPP volumes would not be booked as
     Deferred Revenue.
   The Deferred Revenue account would only reflect
     the present value of the LOE volumes.




                                                                               HEFG/IPAA Capital Markets Breakfast     13
Agented VPP – Lowest Cost VPP


                                                                                      VPP and
                                                                                        related
   The Seller would sell a VPP to the VPP Buyer, a                                   production
                                                                                                                    Floating
                                                                                                                     Price    Wachovia
      Wachovia administered entity.                            VPP Seller                        VPP Buyer
     The VPP purchase price will be based on the forward                                                           Fixed     Bank, N.A.
      prices hedged by the VPP Buyer.                                           Purchase Price                      Price
     The VPP Buyer raises 100% debt financing for its
      acquisition of the VPP in the institutional market.                            Rated Debt              Cash
     Typical pricing is approximately LIBOR + 50 to 75 bps
      (based on term of the VPP and the factors listed below).                                  Institutional
     Class sizes will vary based upon:                                                         Debt Market
       Predictability and stability of the production profile
          and operating cost profile
       Well concentration
       Amount of capital raised against the underlying                           Comparison of VPP Structures
          reserves (i.e., size of “cushion”)                                                                    Standard VPP Agented VPP
       Operator / VPP seller                                     Retain ownership of upside                        Yes          Yes
       Credit quality of the off-takers and basis volatility     Retain control of properties and operations       Yes          Yes
                                                                  No FAS 133 requirements for hedges                Yes          Yes
       Hedging LOE
                                                                  Cost of capital                                   Low        Lowest
       Ability to effectively hedge basis                        Quick execution                                   Yes          No
       Size of NGL component                                     Rating required                                    No          Yes
     Typical transaction of minimum $300 million.




                                                                                                   HEFG/IPAA Capital Markets Breakfast     14
Reversionary Interest Partnership Considerations

   A reversionary interest partnership structure can be used to partially monetize and develop existing properties or in
    conjunction with an acquisition.
     Wachovia would buy a portion of the property and contribute its pro rata share of capital expenditures required for
       development drilling as well as operating, maintenance and COPAS expenses.
     The Seller and Wachovia can continue developing the properties, thereby increasing the value of the reserves.
     Wachovia’s contribution to development costs gives the Seller access to future proved developed reserves with
       minimal upfront capital commitment and reduces risk during the exploitation period.
   This product can be also be used for acquisitions where Wachovia and the Seller can partner to acquire large properties.
     The Seller would have the opportunity to purchase Wachovia’s portion of the property to achieve its growth objectives.

                                          Reversionary Interest Transaction Example
                                                                                        Partnership Mechanics Assuming an Initial Split of 98%/2%
   The Seller sells its working interest in a $400 million property. The property is    IRR Target                       TBD
    purchased by a newly formed Partnership Co. in which the company is the                                             PDP       PDNP     PUD
    general partner (“GP”), with an interest of 2% and a Wachovia-administered
    entity (“WAE”) is the limited partner, with an interest of 98%.                      Before Flip
                                                                                           Wachovia’s Share
   The partnership agreement entitles WAE and the GP to receive their                                                    98%      98%       98%
    proportionate units of the net revenue from the reserves until WAE achieves a          Company’s Share                2%         2%       2%
    predetermined IRR target (cash on cash), which is based on the property              After Flip
    profile. At this time, WAE will receive 65% of the net cashflows while the GP          Wachovia’s Share               65%      65%       65%
    receives 35%. The IRR calculation will include cashflows from production               Company’s Share                35%      35%       35%
    (including hedging) and any proceeds from the sale of the property.
   Net revenues will be calculated by taking COPAS, capital expenditures, LOE                                Working Interest
    and cash flow from hedges into account.
   This structure can be used as a complement to a partial direct working interest
    purchase of a property.                                                                                    Partnership Co.



                                                                                                      WAE        VPP Seller      Hedge Provider

                                                                                                      98%            2%          Wachovia Bank


                                                                                            HEFG/IPAA Capital Markets Breakfast                   15
Case Study – EnerVest Management Partners, Ltd.



                                                                 EnerVest Management Partners, Ltd.
                                           EnerVest Management Partners, Ltd. (“EnerVest”) was founded on October 30,
                                             1992, to acquire, exploit, operate, and manage oil and gas properties on behalf
                                             of institutional investors.
                                              Currently operates approximately 11,500 wells in 11 states including
                 $170,000,000                    Colorado, Kansas, Louisiana, Michigan, New Mexico, New York, Ohio,
           Co-Investment through a               Oklahoma, Pennsylvania, Texas and West Virginia
         Wachovia Reversionary Interest           Serves as the general partner or manager of various institutional funds and
                   Partnership                     partnerships, including EV Energy Partners (“EVEP”), a publicly traded master limited
                                                   partnership
                        •                     Has made over $2.0 billion in acquisitions, including the $750 million
                Sole Arranger               acquisition from Anadarko, and over $467 million in divestitures since
                                            January 2005
         Asset Description & Acquisition Rationale                               Wachovia’s Role
   April 16, 2007 – EnerVest announced that EVEP and               Wachovia co-invested in the Transaction through its
    certain institutional partnerships it manages have signed        Reversionary Interest Partnership product.
    an agreement to acquire oil and natural gas properties          Wachovia will be entitled to its proportionate share of
    in Central and East Texas from Anadarko Petroleum                cash flows and will provide capital for its share of the
    Corp. for $728 million (the “Transaction”).                      necessary capital expenditures, thus reducing the
     1,297 active wells (892 operated)                              developmental risk to EnerVest and EVEP.
     82% PDP                                                         Wachovia’s initial interest in the partnership is
     52% gas, 21% crude and 27% NGLs                                    reduced as certain IRR targets are met
     R/P of 8.1 years                                              Through the Reversionary Interest Partnership and
     Estimated productive life of over 40 years                     EnerVest’s institutional funds, EnerVest and Wachovia
                                                                     allowed EVEP to participate in an acquisition that would
   Implied value of $2.48/Mcfe and $7,029/MMCfe/d.                  have been too large to conduct independently.
   EVEP expects the acquisition to be 45% accretive to             Wachovia’s participation also allowed EnerVest to
    distributable cash flow per unit in 2H 2007.                     allocate its investment capital available to other
   The acquisition closed on June 27, 2007.                         ventures and reduce any investment concentration
                                                                     risks.
                                                                                                 HEFG/IPAA Capital Markets Breakfast       16
Disclaimer




 Wachovia Securities is the trade name for the corporate and investment banking services of Wachovia Corporation and its subsidiaries. Debt and equity underwriting, trading,
 research and sales, loan syndications agent services, and corporate finance and M&A advisory services are offered by Wachovia Capital Markets, LLC, member NASD, NYSE
 and SIPC. Mezzanine capital, private equity, municipal securities trading and sales, cash management, credit, international, leasing and risk management products and
 services are offered by various non-broker dealer subsidiaries of Wachovia Corporation.




                                                                                                                           HEFG/IPAA Capital Markets Breakfast                  17
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