"Oil & Gas"

	Oil & Gas
	Acquisitions       Exploration   Development HAPL Luncheon Presentation February 22, 2000

Small Company Growth Strategies

	Many different models
	Specialized strategies (i.e. exploration, horizontal)
	Diversified strategies (i.e. acquisition, exploitation)
	Vision of founders / management
	Fundamentals
			Reserves / Production
			Cash flow
			Earnings
			Share price
			Story

Ingredients for Growth

	Equity
	Management
	Quality Properties
	Financial Partners
	Track Record
	Focus
	Company Promotion
	Project Promotion
	Luck
	Perseverance

Current Climate

	O & G investments have generated negative returns and destroyed capital
	Industry consolidations and liquidations will continue to result in divestitures
	Larger independents finding it difficult to economically drill for reserves – looking for acquisitions
	Limited (non-existent) public market
	Private capital is selectively available
	Cost of capital is increasing
	Financial discipline is being forced on the sector
	Investors want earnings and liquidity – not just growth!

Corporate Objectives

	Pursue a comprehensive growth plan - acquisitions, re-engineering, development and exploration
	Generate cash flow and superior returns on investments
	Increase per share value
	Increase earnings per share
	Expose shareholders to significant upside.
	Attract investors and partners
			Industry Partners
			Institutional Investors
			Shareholders

Growth

Production Map

Prospects

Management Advantage

	Big Company Training / Experience
	Entrepreneurial Ability
	Demonstrated Technical and Administrative Ability
	Prior Success
	Solid Reputation
	Equity Owners

Major Shareholders

	Management / Employees
	Vlasic Investments L.L.C.
	EnCap Equity 96
	Energy Capital Investment Company
	First Union Capital Markets Corp.
	Lincoln National Life Insurance
	Resource Investors Management Co.
	Quantum Energy L.L.P.

Focus

	Focus Areas: Texas and Louisiana
	Proved reserves with development and exploratory potential
	Low risk exploratory properties
	Exposure to high potential exploration
	Onshore or offshore waters
	Opportunity to promote partners

Composition of Investment
(3 Year Plan)

Hampton Resources Corp.
Chronology of Events

		Date Event
	1991 Initial concept memo
	Acquire / reorganize Hampton
	1992 implement reorganization plan
	Initial mezzanine financing
	Two acquisitions
	Acquire control of partnerships
	Purchase L.P. interests
	1993 Four acquisitions
	Retire mezzanine debt, acquire equity interest
	Bank financing
	Odd lot tender offer

Hampton Resources Corp.
Chronology of Events (cont.)

		Date Event
	1994 Cadre Field - exploration / development
	Ft. Trinidad waterflood unitization
	Negotiate Cove 3-D shoot
	Sell producing field - 2 x PV 10%
	Merger / sale agreement - Bellwether
	Acquire Hermineta partnerships
	1995 Close merger / sale

Cliffwood / Texoil
Chronology of Events
Acquisitions

		Date Event
	1996 Initial concept memo
	Acquire Cliffwood Energy Company
	Roll up Cliffwood L.P. s
	Three acquisitions
	1997 Acquire affiliated partnership
	Five acquisitions
	Sell producing field - 3 to 1
	Sell non-op interests PV 10%
	Acquire Texoil, inc.
	1998 Acquire affiliated partnership
	Sonat acquisition – South TX, Louisiana
	Incremental acquisitions
	1999 Two acquisitions
	Sell non-op interests
	Incremental acquisitions

Cliffwood / Texoil
Chronology of Events
 Financing

		Date Event
	1996 Raise initial equity
	Private loan / equity
	More equity
	Establish bank financing
	EnCap partnership
	1997 Increase bank line
	More equity
	Deal - cash / stock
	Texoil acquisition
	Texoil convertible sub-debt

Cliffwood / Texoil
Chronology of Events
 Financing (cont.)

		Date Event
	1998 Cut costs
	Exploration partners
	Revise / increase bank facility
	Sell properties
	1999 Increase bank facility
	Repay sub-debt
	Preferred equity

Cliffwood / Texoil
Chronology of Events
Business Strategy

		Date Event
	1996 Acquisitions
	1997 Development
	Re-engineering
	Continue acquisitions
	Establish exploration program
	a) joint venture
	b) internally generated
	Corporate merger

Cliffwood / Texoil
Chronology of Events
Business Strategy (cont.)

		Date Event
		1998 Development
	Re-engineering
	Large acquisition
	Sale of properties
	Maintain exploration
	Minimize write down
	Cut costs / maximize cash flow
	Communicate with banks and financial partners
	1999 Continue acquisitions
	Re-engineering
	Incremental acquisitions
	Expand exploration
	Sales of (non-op) properties

Cliffwood / Texoil
Chronology of Events
Business Strategy (cont.)

		Date Event
		2000 Continue acquisitions / development
	Step up exploration
	Expand mergers
	More equity
	Promote company

Summary

	Focus
		Acquisitions with development potential
		Drilling / exploration potential
		Engineering / technical expertise
	Promote diversified prospect inventory
	Experienced Management
		Large company training
		Independent operator success
	Resourcefulness / demonstrated ability
	Proven ability to find and fund projects
	Capital formation - Equity

…Forward Looking Statements

This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 23E of the Securities Exchange Act of 1934, as amended.  All statements other than statements of historical facts included in this presentation, are forward-looking statements regarding the Company=s business strategy, plans, objectives and beliefs of management for future operations.   Although the Company believes the expectations and beliefs reflected in forward-looking statements included in this presentation are reasonable, it can give no assurance that such expectations will prove to have been correct.  Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those envisioned by such forward-looking statements.