Intervention energy

EnerCom -- February 2011

IE at a glance One of the largest private, non-operating E&P companies focused on the

Bakken and Three Forks/Sanish resource play

– Acreage: 45,000 net (20,000 “current core ”)

– Pure-play focus on acquiring Bakken and Three Forks/Sanish acreage and participating with our pro-rata working interests

– We are not operators -- we simply seek to team with the best possible partners

– Goal is to create a diversified well portfolio with imbedded optionality Founded in February 2007

– Seed funding by five Goldman Sachs alums

– Bootstrapped financing by design; no institutional funding to date

– Member syndicate now ~30 friends/co-workers of seed investors

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Introduction

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Accidental early accretion evolving into consistent and straightforward mission

– Create and optimize lease option portfolio largely focused on Bakken and Three Forks/Sanish resource play

– Arbitrage difference between inherent option value per acre and market clearing price --- public comps increasingly exploiting this ‘trade’

– Actively manage and trade assets to high grade lease ‘option’ portfolio, reducing ‘theta’ risk by getting acres under the drill bit

– Identify and exploit other technology-driven, high-return opportunities Uniquely qualified leadership team and engaged member syndicate capable of

developing a leading private non-operator in the Bakken

– Local roots and relationship network = proprietary deal flow

– Deep experience in commodities, hedging and option portfolio management

– Key investors and advisors are senior and prior members of:

• Goldman, Farallon, Ospraie, SAC, Moore Capital, TPG

Introduction

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Why can career traders and finance guys build out a non-op E&P company? IE first and foremost manages an options portfolio that happens to be in the oil

and gas space (we’re geeks, not nerds) IE is a focused play on the Bakken/Three Forks - the most compelling and

explosive North American oil discovery in decades Technology and analytics are driving the play, not traditional oil calculus

The non-operator business model is highly scalable given the world-class economics and rapid development in the Bakken/Three Forks resource play

Pure comp NOG was the first NYSE listed company in history to reach $1B market cap with < 10 employees

– One of the most operationally leveraged (legal) business models in history

A few smart, highly focused guys making the right decisions alongside the right capital partners can create enormous value

Introduction

Williams County - Activity Explosion

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10 years in 30 seconds Time lapse of oil

production in Williams County

Animation slowed to show dramatic expansion

of footprint and production in 2009+

Source: DrillingInfo, Feb 2011

<< CLICK ON THE GRAPHIC AT LEFT TO BEGIN ANIMATION

Significant progress in 2010

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Company SnapshotIntroduction

Data Point Apr-10 Dec-10 Dec-11

IE Total Net Acres Leased (ND/MT) 31,000 45,000 45,000

Net 'Core' Bakken/Three Forks Acreage 11,000 17,000 17,000

Gross Producing Wells 6 30 200

Net Producing Wells 0.15 0.73 8.20

Daily Production (BOEPD)* 30 275 1,600

Annualized EBITDAX ($80/bbl wellhead) $7.7mm $44.9mm

Acres HD-WOC-HBP** 131 1,730 9,500

ND Daily Production (BOEPD)* 285,000 350,000

ND Rig Count 107 160

*December 2010 figures represent best estimates at this time as production data lags from operators; ND production is IE estimate.

-December 2011 are modeled estimates as of January 2011 and assume no further acreage acquisition and full development as currently anticipated.

**HD-WOC-HBP = Acreage “Held-By-Drilling + “Waiting On Completion” + “Held-By-Production”

STATIC ACREAGE

ROLL FORWARD

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Downspacing

BEXP (and others) have shown that multiple wells can be drilled in close proximity without adversely affecting neighboring well performance

Increased frac stages by the same operator in side-by-side wells also demonstrate the clear correlation between frac count and well production

BEXP has commented that frac stages cost $80k but currently add ~20k BOE in P1 reserves at a cost of $4/BOE >> Frac stages likely to increase

Investment Highlights

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Unit Economics Unitization creates leverage for IE -- we enjoy the benefits of partnering with

major operators simply by sharing acres in a legally defined drilling unit


BEXP’s Heen 26-35H Well

Drilling unit = 1,280 acres Wellhead

IE lease covers 80 net acres

80 / 1280 = 6.25% of unit

Bakken development is within drilling units established by the state of North Dakota.

As long as you have leased acreage within a drilling unit, you participate in the well with all other leased interests on a pro-rata basis.

As a leasehold owner of 6.25% of the drilling unit (the “working interest”), IE will pay for 6.25% of all related drilling and development costs of the well and get 6.25% minus royalties related to the IE lease of all future revenues from this well and any others drilled within the unit and zone.

CRITICAL POINT: Once a unit becomes HBP, it creates a 30+year, zero cost option for IE to participate pro rata in future activity (surface to basement)

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Unit Economics

The Heen 26-35 1-H Well is a solid performer, with a peak 24hr IP of 3,425bbl and 2,194 MCF

Initial 28d production = 32,581 BBLS Oil or 1,163/day (excludes 1/6 * 25,865 MCF Gas = 154 BOE/day flared)

– Gross economic value of first two months oil production: ~$4.0mm


STATISTICS AND INITIAL PRODUCTION FOR HEEN 26-35 WELL (source: NDIC)

Notable sidebar: BEXP flared approximately $300k in gas during its first two months of production. Improved infrastructure will allow even more efficient capture of this valuable byproduct

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Unit Economics Groundwork is already being laid to take advantage of downspacing


Based on current estimates, downspacing appears to be an effective strategy of better draining the reservoir

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Unit Economics Cash-on-cash analysis for IE’s participation in the Heen Well, based on BEXP

estimated EUR and typical decline curve Initial economics are highly compelling with unlevered IRR of 53% Additional well (with no lease cost) shows an unlevered IRR of 89%

– No capital is required from IE until future wells commence

– Technology advances should improve future well F&D costs


Projected Unit Economics for actual IE position in Heen Well Projected Unit Economics for IE option on additional Heen wellsNAV Discount Rate 10.0% Output

PV10 ($) $427,011Assumptions Unlevered IRR 53%

Net IE Potential (boe) 28,750$/boe $14.85

Land PositionAcreage ($/acre) 1,535.00$ Acreage (net) 80.00 Acreage Cost 122,800$ Working Interest 6.2500% Drilling/Completion Cost 461,375$ Royalty 20.0000%NRI 5.0000% Total Upfront Cost 584,175$ Acreage (gross) 1,280 Risk Factor 100%Spacing (acres) 1,280 10 year cash-on-cash return $1,606,929Drilling Locations 1 MOM Return multiple 2.75

Productive life cash return $1,992,196Gross Well Stats MOM Return multiple 3.41 EUR per Well (boe) 575,000 Cost per Well ($) 7,382,000 WTI assumed $89.0030-Day IP Rate (boe/d) 1,163 Wellhead price /bbl $77.88Implied F&D ($/boe) $12.84 (12.5% discount to WTI)Implied Net F&D ($/boe) $16.05

NAV Discount Rate 10.0% OutputPV10 ($) $521,408

Assumptions Unlevered IRR 89%Net IE Potential (boe) 28,750$/boe $18.14

Land PositionAcreage ($/acre) -$ Acreage (net) 80.00 Acreage Cost -$ Working Interest 6.2500% Drilling/Completion Cost 461,375$ Royalty 20.0000%NRI 5.0000% Total Upfront Cost 461,375$ Acreage (gross) 1,280 Risk Factor 100%Spacing (acres) 1,280 10 year cash-on-cash return $1,606,929Drilling Locations 1 MOM Return multiple 3.48

Productive life cash return $1,992,196Gross Well Stats MOM Return multiple 4.32 EUR per Well (boe) 575,000 Cost per Well ($) 7,382,000 WTI assumed $89.0030-Day IP Rate (boe/d) 1,163 Wellhead price /bbl $77.88Implied F&D ($/boe) $12.84 (12.5% discount to WTI)Implied Net F&D ($/boe) $16.05

In IE’s core counties, max average monthly oil production has increased with strong regularity, showing a 5-yr CAGR of 44% or roughly 230bbls per month

y = -232.27x + 17155R² = 0.8082

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First Production, Months prior to Feb 2011

Max Average Monthly Oil Production for Key Counties, Months Prior to Feb 2011

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Technology As A DriverInvestment Highlights

20102009200820072006

Collapse of global markets forced temporary

pullback in capex and production in 2009

Source: DrillingInfo, Feb 2011, based on composite results of all 2,036 wells drilled in core counties during prior 60 mos

Dramatic improvements in

technology may be driving even more significant results

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Compelling Returns Outstanding unlevered returns can be generated by the ‘mean performer’

1,280 acre Bakken well, where the tech-driven current average 30d IP is1,025bbl/day (source: Seeking Alpha research)

As shown below, compelling unlevered returns are available well above the current ~$1,500 per acre clearing price

HOWEVER, given the high probability of future downspacing in most units, any analysis must include a blending of returns generated by subsequent wells in a given unit (yellow shading below) once it becomes HBP for 30+ years


80% 80$ 85$ 90$ 95$ 100$ 105$ -$ 68% 75% 82% 89% 96% 103%500 56% 62% 68% 74% 81% 87%

1,000 47% 53% 58% 63% 69% 74%1,500 40% 45% 50% 54% 59% 64%2,000 34% 39% 43% 47% 52% 56%2,500 30% 34% 37% 41% 45% 49%3,000 26% 29% 33% 36% 40% 44%3,500 23% 26% 29% 32% 35% 39%4,000 20% 23% 26% 28% 32% 35%4,500 17% 20% 23% 25% 28% 31%5,000 15% 18% 20% 23% 25% 28%5,500 13% 16% 18% 20% 23% 25%6,000 12% 14% 16% 18% 21% 23%6,500 11% 12% 14% 16% 19% 21%

Acre price vs WTI Price

IE has diversified holdings among the top operators in the Bakken 70% of acres are operated by 5 Bakken heavyweights (BEXP, Hess, Oasis,

Continental & Whiting)

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Partner ProfileNon-Op Portfolio Diversification

OTHERS

19%

10%

5%

17%6%2%

4%

14%

5%

2%

10%4%

3.17%

17.60%

23.53%

17.05%

27.67%

4.88%

2.35% 1.98%

0.51% 1.02%

2011 2012 2013 2014 2015 2016+ HBP WOC Drilling Permitted

Perc

enta

ge

Year of Expiration

LEASE EXPIRATION - % OF ACRES PER YEAR

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Lease ExpirationIE Options Portfolio Mentality

Drilling pipeline / HBP acreage already represents

nearly 2,700 net acres

We add approximately 175 net acres to HBP per week

Expected actual expiry during 2011: 850 acres

(<2%), nearly all non-core

Rather than chase ‘hot’ properties, IE has historically targeted out-of-the-money lease options with high likelihood of flipping to HBP

$-

$20,000

$40,000

$60,000

$80,000

- 20 40 60 80

2011

2012

2013

2014

2015

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Lease Acquisition CostIE Metrics

$1,000 per acre lease parity cost line

$2,000 per acre lease parity cost line

Gro

ss le

ase

pric

e pa

id

Net lease acres acquired

Year of lease expiry

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IE Comps Validate Non-Op Model

Total Bakken Wells Net Bakken

Date Gross NetNet

BOEPD Acreage Mkt CapNOG 122,000 $1.62 BIO

End 2010 300+ 3,670

End 2011 8,200 (GHS estimates for YE 2010 & 2011 BOEPD)

VYOG 24,000 $238 mio

End 2010 15 0.48 200

End 2011 35 6.5 2,150 (Company estimates for gross/net wells; GHS for BOEPD estimates)

TPLM 13,000 $165 mio

End 2010 3 0.46 29

End 2011 20 5.3 500 Company estimates for gross/net wells; Canaccord for BOEPD est (assumes 3.1 net completed)

ANFC 3,700 $44 mio

End 2010 4 0.02 3

End 2011 n/a n/a n/a Company estimates for gross/net wells; IE est on 2 producing wells

IE 20,000 n/a

End 2010 30 0.73 275

End 2011 200 8.2 1,600 Company estimates for gross net/net wells & BOEPD estimates

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Capital Markets Activity Non-op public comps recognize the critical role of dry powder and have actively tapped the public

markets throughout the prior year. Market reception has been strong as the investing public has come to embrace the Bakken-focused non-op model.

Investors have rushed to grow their positions in the smaller, more rapidly expanding names in particular; both VYOG and TPLM have seen ~300% market cap increases in less than 12 months.

Comparable Companies

Firm Date Type Synopsis Mkt Cap % CHG

NOG 4/15/2010 Equity Offering $82.6 mio (750k share over-allotment) at $15.00/share $725 mio 6/1/2010 Debt Financing Moved revolver to Macquarie from CIT -Borrowing base minimum $25 mio; maximum $100 mio 11/18/2010 Equity Offering $201 mio raised (1.34 mio share over-allotment) at $20.25/share 2/4/2011 Closing Price $26.76 $1,620 mio 123%

VYOG 4/16/2010 Reverse Merger VYOG evolves out of ANTF (formerly World Poker Tour) $63 mio 9/23/2010 Debt Financing $15 mio senior secured notes (2-yr max term) at 12%

2/1/2011 Unit Offering $50mm units; 1 common share, ½ warrant at 50% premium 2/4/2011 Closing Price $5.24 $238 mio 278%

TPLM 3/11/2010 Private Placement $9.24 mio via 28 mio shares at $0.33/share $41 mio 7/30/2010 Private Placement $0.88 mio via 2 mio shares at $0.43/share 8/10/2010 Equity Offering Announces $50 mio equity offering 11/4/2010 Equity Offering $62.6 mio raised (1.62 mio share over-alloment) at $5.50/share -Offering coincided with reverse 1-for-10 stock split

1/31/2011 Shelf Filing $300 mio mixed shelf filing 2/4/2011 Closing Price $7.32 $165 mio 302%

ANFC 12/20/2010 Private Placement $11 mio raised (1 mio share over-allotment) at $1.00/share 2/4/2011 Closing Price $1.65 $44 mio

Views on the Future

“Expanding the Edges”

Land rush is really a drilling/HBP stampede AFE Adversity / Opportunity Top Lease Wedges Technology Transfers – don’t forget ‘oil is where you find it’

Continuing Consolidation

– Acreage and opportunity scarcity

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What We’re Watching…

Spearfish

Tyler Madison 3.0

Original Vertical Holes Vertical Infill w/ Waterfloods

Horizontal Infills w/ advanced bits and steering ability

Bullish on the Basin… It’s

Not Just The Bakken

Flaring – currently 25% of daily production Take-away Capacity -- Doubts and Differentials

Water – Forget about whiskey Frac’ing – Supply and Suspicion

Challenges

What’s next for Intervention Energy? Anticipating $40mm - $50mm in AFE’s during 2011 Looking at ~1,600 boepd by FYE 2011

– Annualized Dec 2011 EBITDAX of ~$45mm

– With a bit of hard work, good luck and great partners, we can become a ‘real company’ by this time next year Actively exploring financial alternatives

– Considering potential partnership(s) with large balance sheets

– Always open to making new friends Our goals

– Continue to build the leading private Bakken-focused non-op company

– Optimize alternatives and outcomes for our investors

More info on us at: www.interventionenergy.com

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Intervention energy

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