Introduction to CIT Energy January 16 2007 IPAA

Introduction to CIT Energy January 16, 2007 IPAA Confidential. For discussion purposes only. 1

The World’s Largest Independent Finance Company § Headquartered § Over in New York City $80 billion in managed assets § Rated A/A 2 § Market Capitalization of $4 Billion § Fortune 500 Company; member of the S&P 500 § 80% of clients are Fortune 1000 companies § Over 7, 000 employees worldwide Confidential. For discussion purposes only. 2

The World’s Largest Independent Finance Company CIT is not… Ø Ø …a commercial bank – we are not regulated like a bank allowing us to invest across the entire capital spectrum … a hedge fund - we are an arranger, underwriter and distributor of both 1 st and 2 nd Lien paper, as well as junior capital investments. CIT is… Ø …an Energy Merchant Bank with a unique ability to arrange and underwrite solutions across the entire capital spectrum. Confidential. For discussion purposes only. 3

CIT Energy - Overview Industry Sub-Vertical Focus Houston Upstream New York Midstream CIT Energy provides advice and financial solutions for clients that operate throughout the energy industry value chain Power/Renewables Power Generation E&P Gathering & Service Transmission & Services Oil Field Services Transmission Alternative Energy Sources Conversion Confidential. For discussion purposes only. Delivery 4

U. S. Middle Market Lead Arranger “Traditional Middle Market” = Deal size $100 -500 million Source: Reuters Loan Pricing Corporation Confidential. For discussion purposes only. 5

CIT Energy – Life Cycle Solution Life Cycle Example Initial Capitalization. Equity Financing Stage of Growth Company Acreage acquired, drilling begins; reserve mix of some PDPs, but mostly PUDs CIT provides $10 million Stretch 1 st Lien CIT Solution Additional drilling; more PDPs, some PDNPs & PUDs; large acreage position CIT provides $25 million Stretch 1 st Lien Refinancing 6 months later; 1 st & 2 nd Lien structure now available CIT provides $25 million Conforming 1 st Lien & $15 million 2 nd Lien $100 million Acquisition CIT arranges, underwrites and syndicates $100 million 1 st Lien & $40 million 2 nd Lien CIT begins initial dialogue Time Confidential. For discussion purposes only. 6

CIT Energy: Start-Up Acquisition Financing Profile Former executive of major oil companies making a $15 million start -up acquisition Situation Start-up acquisition with drop dead date CIT Energy to underwrite debt (Unitranche equivalent to 1 st, 2 nd, and Mezz) Equity bows out of transaction at 5: 00 p. m. on Friday with deal set to close the following Wednesday CIT Solution CIT Energy obtains approval to bridge the equity (based on soft circle from new equity provider) on the following Tuesday and the deal closes on Wednesday as scheduled Confidential. For discussion purposes only. 7

CIT Energy: Early Development Financing Profile Early Stage Development Financing - $12 million Situation Very small producer in business for two years No PDPs and in need of development capital Use of proceeds: 1) buy out other 50% owner, 2) lay gathering line, 3) refinance existing debt, 4) fund drilling and acquisition of additional acreage CIT Solution Arranged and hold both 1 st ($0 outstanding) and 2 nd Lien facility Debt facilities structured to grow with the company with appropriate pricing for 1 st and 2 nd Lien risks Confidential. For discussion purposes only. 8

CIT Energy: Gulf of Mexico Profile Gulf of Mexico - $34 million development capital Situation Producer seeking financing for additional development capital Positioning company for sale CIT Solution CIT Energy arranged $16 million 1 st Lien and $18 million 2 nd Lien Use of proceeds: $30 million refinancing and $4 million for new drilling capital Noteworthy 2 nd Lien underwriting and hold on GOM properties Confidential. For discussion purposes only. 9

CIT Energy Overview – Sample Transactions $25, 000, 000 $18, 000 Senior Secured 2 nd Lien Credit Facility Senior Secured Revolving Credit Facility Ascent Oil and Gas, Inc. ERG Resources, LLC Corkran Energy, LP Trans. Energy, Inc. July 2007 October 2007 June 2007 Co-Lead Arranger Sole Lead Arranger $15, 000 $400, 000 $65, 000 $38, 000 Senior Secured Credit Facility Senior Revolving Facility Term Financing Senior Secured Revolving Credit Facility and 2 nd Lien Credit Facility Natural Gas Compression August 2007 March 2007 Sole Lead Arranger Co-Syndication Agent September 2007 Sole Lead Arranger Confidential. For discussion purposes only. Sole Lead Arranger 10

Questions and Follow-Up Confidential. For discussion purposes only. 11