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BUT...Pioneer Natural Resources - September 22, 2005 “Deepwater Sale Positive, But Growth Prospects Remain Modest” PXD elected to divest deepwater Gulf of Mexico and Argentina assets, a move that would remove risk from its capital budget and volatility from its production profile, in our opinion. We believed the strategy would let the company refocus spending on more-predictable growth projects. In our estimation, while divesting the Gulf and Argentina assets would lower cash flow by about 20%, the corporate decline rate would improve to an excellent 12% from 18%. In contrast, Deep Gulf assets had been declining at a rate exceeding 30% annually. Using recent transaction multiples as a guide, we projected PXD would realize between $1.5 and $2.0 billion for the assets, a sum accretive to our NAV estimate of $46.70/share. About six months after our report was published, PXD sold Argentina and most GOM assets for $1.975 billion.

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Experts’ View – ARC Energy Trust - January 11, 2005 “Noah Would Have Trusted This ARC” After hitting the market in July 1996, AET derived 81% of proved reserve growth from acquisitions. Entering 2005, the trust made its intention known to become a 'driller' by proposing a record capital budget and targeting a record number of wells. Would AET be capable of executing the strategy? Having evaluated more than 14,000 working interest wells in Western Canada, we detected a decline rate that ranked best among the peer group, a diversified reserves base, and assets that would allow the company to reach guidance by spending only 50% of cash flow.

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The Macro Perspective - October 6, 2005 “Another Day In The Desert” Is Saudi Arabia's oil production teetering on the brink of steep and irrevocable production decline? Hardly. We saw no evidence of Saudi production being in imminent danger of collapse -- the premise at the foundation of the book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. We believed the process used by the author to arrive at the conclusion was impaired by incorrect interpretation of reservoir engineering concepts and common oilfield operations. For example, Twilight interprets Saudi Aramco's strategy to manage the water cut at Ghawar as evidence that things must be going very wrong whereas, in fact, an already low water cut had been reduced in four of the previous five years. This book posited a crisis where in our opinion none existed. To the contrary, we detected evidence of prudent operatorship and a conservative practice of assigning reserves. As independent petroleum engineers, we disagreed with the primary conclusion of this book.

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