Natural Gas Market Overview

Highlights Natural Gas production continues to rise driven by liquids focused producers. Production growth led by the Marcellus/Utica, Eagle Ford, and Anadarko basins. Diverging values for crude oil, natural gas liquids (NGLs) and natural gas drive investment decisions New assets for processing, transportation, fractionation and export are needed to balance markets Power generation demand rises as inroads into coal fired generation continue while industrial demand growth increases especially in the Gulf Coast. New North American gas production exceeds domestic demand growth in forecast; exports (LNG + Mexico) required to balance market 2

Gas, Oil and NGL Price Comparison: MMBTU Equivalent $/MMBtu Equivalent $30.00 $30.00 $25.00 $25.00 $20.00 $20.00 $15.00 $15.00 $10.00 $10.00 $5.00 $5.00 $0.00 $0.00 CAPP WTI HH MB NGL Brent 3

Eagle Ford Oil Perm Delaware Utica Oil Utica Wet Bakken Anad - Cleve/Tonk Perm Midland Niobrara Anad - Miss Lime Eagle Ford Wet Granite Wash Marcellus Wet Perm Central Basin Uinta Cana-Woodford Marcellus Dry Fayetteville Pinedale Haynesville Arkoma-Woodford Piceance 2018 Prices Tilt IRRs to Dry Gas 70% 60% 50% 40% 30% 20% 10% 0% 45% 25% 2013 2018 2013 Price Assumptions: Gas = 12 month forward average curve for each regional pricing point (range $4.03-$4.28/Mcf) Oil = 12 month forward average WTI +/- differential (range $79-$96/barrel) NGLs = weighted average $/barrel, 12-mo forward average Mt. Belvieu prices (range $25-$51/barrel) 2018 Forward Curve Price Assumptions: Gas = $4.91/Mcf, NGLs = $44/barrel, Oil = $77/barrel)

Drilling Rig Migration: 44 Months 33/+8 50/+22 4/+1 20/-10 Rig Increases Dry Gas Focused Areas 3/+0 4/-4 Rig Increases Liquids-Rich/Oil Focused Areas Rig Declines CALIFORNIA OTHER ROCKIES 28/+19 178/+101 POWDER RIVER WIND RIVER GREEN RIVER UINTA SAN JUAN 14/-9 PICEANCE 0/+0 RATON PERMIAN 460/+242 WILLISTON 47/+29 D-J ANADARKO 206/+84 56/-53 FT WORTH OTHER MIDCONTINENT 116/+79 208/+148 EAST TX 59/+0 2/-27 35/-55 34/-95 ILLINOIS ARK FAYETTEVILLE 4/-2 32/+28 12/+4 14/-23 ARK WOODFORD ARKLA TX GULF EAGLE FORD 12/-3 105/+21 MICHIGAN 20/+9 AL-MS-FL LA GULF TX GULF UTICA OFFSHORE 51/-25 43/+25 1/-11 OTHER APPALACHIAN MARCELLUS DRY MARCELLUS WET TOTAL 1853 CHANGE +504 Source: BENTEK, Aug. 2013 Active rig count: Aug. 16, 2013 / Change in rig count from Jan. 1, 2010

Crude and Gas Prices Higher Since Beginning of Year Continuing to Prompt Drilling Investment Across Country HH ($/MMBtu) WTI ($/Barrel) Mt. Belvieu ($/Gal) Jan. 2013 $3.34 $94.57 $0.95 Jul. 2013 $3.62 $104.78 $0.88 45/+4 33/+2 4/-1 22/+5 Rig Increases Dry Gas Focused Areas 2/-3 5/+0 Rig Increases Liquids-Rich/Oil Focused Areas Rig Declines CALIFORNIA OTHER ROCKIES 25/-2 181/+14 POWDER RIVER WIND RIVER GREEN RIVER UINTA SAN JUAN 15/+3 PICEANCE 0/+0 RATON PERMIAN 459/+16 WILLISTON 49/+13 D-J ANADARKO 207/+2 62/+5 FT WORTH OTHER MIDCONTINENT 218/+0 115/+17 EAST TX 66/+9 3/+0 32/-9 30/+4 98/+1 ILLINOIS 10/+3 ARK FAYETTEVILLE 15/+0 ARK WOODFORD ARKLA TX GULF EAGLE FORD 16/-4 MICHIGAN 2/-5 14/+0 AL-MS-FL LA GULF TX GULF 30/+4 UTICA OFFSHORE 53/+4 41/+8 3/-1 OTHER APPALACHIAN MARCELLUS DRY MARCELLUS WET TOTAL 1857 CHANGE +89 Source: BENTEK, July 2013 Active rig count: July 12, 2013 / Change in rig count from January 4, 2013

Horizontal Rig Count Shale Gas Production up 6 18 16 14 12 10 8 6 4 2 0 300 250 200 150 100 50 0 Fayetteville Haynesville Marcellus Horizontal Rig Count Source: BENTEK Production Monitors

Rig Count Does Not Reflect Improving Drilling Efficiencies No. Wells Drilled/Active Rigs Well per Rig per Month Eagle Ford Wells Drilled vs. Active Rigs 400 350 300 250 200 150 100 50-2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 - Source: Bentek, RIGDATA Wells per Month per Rig Horizontal Rigs Horizontal Wells Drilled

Drilling Efficiencies Up 600% 1st Quarter 2007 1st Quarter 2008 1st Quarter 2010 2nd Quarter 2012 Source: Southwestern Energy Financials Fayetteville Shale +607% 129,813 +190% +130% +144% -66% 53 4,840 2,454 +8% 20 7 18 2,104 1,006 18,360 $2.6 $2.8 Drill Time (Days) Wells Per Yr. Per Rig Avg. Lateral Length ( Feet) 30 Day Ave. Prod Rate (Mcfd) IP Additions Per Rig Per Yr. (Mcf/d) Drill & Complete Costs ($MM)

Liquids Growth Drives 2013-2014 Production Higher 16 14 12 10 Dry Basins Dominate Growth Trend Incremental Growth Since Jan. 2010 Transition Year Liquids Basins Dominate Growth Trend 8 6 4 2 - Lean Gas Rich Gas 10

Net Change in Lower 48 U.S. Natural Gas Fundamentals from 2007 to 2013 Total Supply Production Imports from Canada LNG Demand from Power ResComm Demand Industrial Demand Exports to Mexico LNG Exports Pipe Loss Total Demand 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0 2007-2013 Fundamentals 12.3 14.3 (1.9) (0.1) 5.1 0.7 2.3 1.9 2.7 0.2 13.0 Source: BENTEK Cell Model 11

Net Change in Lower 48 U.S. Natural Gas Fundamentals from 2013 to 2023 Total Supply Production Imports from Canada LNG Demand from Power ResComm Demand Industrial Demand Exports to Mexico LNG Exports Pipe Loss Total Demand 2013-2023 Fundamentals 30.0 25.0 20.0 21.0 24.7 20.4 15.0 10.0 5.0 0.0-5.0-10.0 (3.6) (0.1) 6.4 0.7 2.9 2.0 8.2 0.3 Source: BENTEK Cell Model 12

North American Production Growth Focused in East and Texas 0.9 +0.3-0.1 Note: Forecasts Compare 2013 to 2023 () +0.3 +5.6 +1.0 +3.6 5.2 +9.1 Total Increase: 25.9 Source: Bentek Cell Model 13

Southeast Leads Demand Growth +0.1 +0.3 +1.6 +0.2 +3 +1.1 +2.5 +9.4 Demand Growth: 2013-2023 Source: BENTEK Cell Cast 14

East Gets Long/West Gets Short 15 10 5 0 W. Canada Balance () 0-2 -4-6 -8 Southwest Balance () 5 0-5 -10-15 Northeast Balance () 15 Texas Balance () 8 MCP Balance () 5 Southeast Balance () 10 5 6 4 2 0-5 0 0-10

Black Hole of Demand Appears Southeast and Southeast Texas demand cause a demand pull attracting supply from Texas, Midcontinent and Northeast to supply new demand 30.0 20.0 10.0 0.0 Southeast Demand Poised to Explode Source: BENTEK Cell Model LNG EXPORTS POWER RES/COM INDUSTRIAL PIPE LOSS

Growth in Demand Not Enough: Exports Needed 95 90 85 80 75 70 65 60 55 50 45 U.S. Supply/Demand Balance 24.7 9.3 10.2 17.1 Dry Production US Domestic Demand Source: BENTEK Cell Model US Production Forecast US Domestic Demand Forecast 17

Northeast, Texas, and Southeast Lead Production Growth Bcf/D 100 90 80 65.0 70 60 47.9 50 40 30 20 10-88.7 Change 2013-2023 CAGR NE 8.6 5.7% SE 4.0 3.7% TX 6.0 2.8% MCP 3.5 4.4% MCM 1.0 7.3% ROX 0.1 0.1% SW -0.2-0.4% Offshore 0.7 1.3% Total 23.8 3.2% NE SE TX MCP MCM ROX SW Offshore 18

Power Gen and LNG Drive Demand Growth 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 - Change 2013-2023 CAGR Elec Gen 6.4 2.5% Res/Com 0.7 0.3% Indus 2.9 1.4% LNG Exp 8.2 N/A Mex Exp 2.0 8.1% Other 0.3 1.4% Total 20.4 2.6% Elec Gen Res/Com Industrial LNG Exports Mex Exports Other 19

Southeast and Northeast Lead Gas Fired Power Gen Growth 30 25 20 15 10 5 - Change 2013-2023 CAGR NE 1.6 2.9% SE 2.4 3.0% TX 0.3 0.6% MCP 0.3 2.7% MCM 0.6 4.7% ROX 0.2 5.1% SW 0.9 2.3% NW 0.1 1.9% Total 6.4 2.5% NE SE TX MCP MCM ROX SW NW 20

Gas Fired Power Gen has come from Coal and Oil Million MWH 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Very little Oil market left but lots of Coal left. Change 2001-2012 Million MWH CAGR Nuke 1 0.0% Coal -387-2.0% Oil -102-14.3% Gas 592 6.1% Hydro 60 2.2% Sol/Win 137 31.2% Other Ren 9 2.4% Other 9 1.6% Total 318 0.7% Nuclear Coal Oil Natural Gas Hydro Solar and Wind Other Renewable Other Sources 21

Million MWH Coal is Still King in Mid West 2,500 2,000 1,500 1,000 500 0 Change 2007-2012 Million MWH CAGR SE -181-9.0% NE -192-8.0% TX -9-1.3% MCP -16-2.2% MCM -76-3.6% ROX -11-1.7% SW -7-2.0% PNW -7-13.0% Total -493-5.5% MCM NE SE TX MCP ROX SW PNW 22

$/mmbtu Gas vs. Coal Prices $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Henry Hub Gas Powder River Basin Coal Central Applachian Coal 23

Southeast and Texas Dominate Industrial Demand Growth 25 20 15 10 5 0 Change 2013-2023 CAGR NE 0.4 1.4% SE 1.3 2.4% TX 0.4 0.9% MCP 0.0 0.2% MCM 0.6 1.6% ROX 0.1 1.4% SW 0.1 0.3% NW 0.0 0.4% Total 2.9 1.4% NE SE TX MCP MCM ROX SW NW 24

US Industry Expansion U.S. Industrial Sector Projects Regional Demand Region Chemical Industrial Metals Petroleum Total Projects Estimated Demand (MMcf/d) Southeast 1,004 49 41 1,311 112 2,405 Midcon Market 1,082 45 31 0 60 1,158 Northeast 107 26 0 165 52 298 Texas 539 4 2 198 40 743 Midcon Producing 232 7 0 0 20 239 Rockies 0 62 0 0 6 62 Southwest 0 0 0 0 3 0 Pacific Northwest 0 0 0 8 2 8 To be determined 0 0 0 0 3 0 Total U.S. 108 112 48 31 298 4,913 Demand (MMcf/d) by sector 2,964 193 74 1,682 Projects from December 2012 through year-end 2018 Source: US Industrial Demand Tracker 25

North American Proposed Export Projects 14 5 24 1.8 9.6 9 296.8 mtpa (39.6 ) of capacity is proposed for North America more than current global liquefaction capacity (~38.2 ). Only a handful of this will be built 5 16 12 1.5 17.6 24 8 8 4 22.5 15.6 11.5 2.1 1.8 15.6 10 21 8 18 24 7.8 mtpa Source: BENTEK 26

North American LNG Export Facilities HN DC LNG Kitimat LNG LNG Canada Canadian Exports: DC LNG 0.25 (1.8 mtpa) Kitimat LNG 1.4 (10 mtpa) LNG Canada (Phase 1 ) - 1.6 (12 mpta) Gulf Coast Export Terminals: Freeport LNG 1.76 (13.2 mtpa) Lake Charles 2 (15 mtpa) Sabine Pass 2.4 (18 mtpa) Cameron 1.6 (12 mtpa) North East Exports: Cove Point 0.75 (5.6 mtpa) Lake Charles Cove Pt. South East Exports: Elba Island FLNG 0.5 ( 4mtpa) Freeport Elba Island Existing Import + Proposed Export Proposed Export Cameron Sabine Pass Source: BENTEK 27

North American Production Forecast North American LNG exports will average 10.32 in 2023 14 12 10 8 6 4 2 0 12.375 Kitimat Sabine Pass Freeport Cameron Cove Point Lake Charles Elba Island DC LNG Canada Capacity 28

Mexican Demand Outpacing Production 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Mexico - Dry Gas Production Nearly Flat Up 0.13 2007-2012 10.0 8.0 6.0 4.0 2.0 0.0 Mexico - Gas Demand Growing Rapidly Up 1.17 2007-2012 Power Burn Industrial Demand Other Demand 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Mexico - LNG Imports Rise Up 0.22 2007-2012 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Mexico - Gas Imports from U.S. Climb Fast Up 0.83 2007-2012

Mexico Plans 30 Gas-Fired Power Projects; $10 Billion Pipe Expansion Program Mexican Power Expansion 2013 2025 17,405 MW 2.5 @ 80%; 7.5 heat rate $10 Billion Pipeline Expansion Program: 9 Major Pipeline Groups; 17 Pipeline Expansions; 7 Border Crossing Projects; 4 US Import Capacity Increase 30

New Demand Projects Double Exports 1/1/2005 12/1/2005 11/1/2006 10/1/2007 9/1/2008 8/1/2009 7/1/2010 6/1/2011 5/1/2012 4/1/2013 3/1/2014 2/1/2015 1/1/2016 12/1/2016 11/1/2017 10/1/2018 9/1/2019 8/1/2020 7/1/2021 6/1/2022 5/1/2023 5.0 4.0 Project Name Capacity City State In-Service Date El Paso Willcox Lateral 2013 Expansion 185 Douglas Arizona 4/1/2013 El Paso Norte Crossing* 366 Clint Texas 8/1/2013 3.0 El Paso Samalayuca Lateral* 237 Clint Texas 8/1/2013 Kinder Morgan Mier Monterrey Expansion 275 Salineno Texas 4/1/2014 2.0 TETCO South Texas Expansion 300 Reynosa Texas 6/1/2014 1.0 El Paso Sierrita Pipeline** 812 Sasbe Arizona 10/1/2014 Net Midstream/PEMEX -- Agua Dulce - Frontera 2,100 Reynosa Texas 11/1/2014 0.0 US Exports to Mexico Grow 2.0 to an Average of 3.8 Mexican Border Crossing Expansions by 2023 Total Export Capacity Additions 4,275 Total U.S. Export Capacity with Expansions 9,648 * Samalayuca and Norte Crossing exports are limited to a total of 545 MMcf/d by current Samalayuca lateral capacity. **Sierrita is expected to have an initial capacity of 0.2, expanding to 0.8 by 2016. Samalayuca presidential permit for exports is 545 From Texas From Southwest 31

Transportation Scenario Vehicle Type Total Gallons Consumed (Millions) Full Conversion Passenger 130,144 44.57 Bus 1,106 0.38 Truck (Long Haul) 26,672 9.13 Rail 3,573 1.50 Marine Vessel 4,560 3.01 Total 166,055 58.59 2018: 5% of Long Haul Trucks = 0.5 80% of all Buses = 0.3 0.25% of Passenger Cars = 0.1 5% of Rail = 0.1 5% of Marine Vessel = 0.1 TOTAL = 1.1 Source: BENTEK, EIA, Federal Highway Administration 32

Northeast = Paradigm Shift in Gas Flow 16 Northeast Inflows & Production 14 12 10 8 6 4 2 0 2009 2010 2011 2012 2013 REX Canada Midcon Southeast NE Production Source: Bentek Cell Model 33

Northeast Adds 9.1 by 2023 25.0 Total Northeast Production Forecast 20.0 15.0 10.0 5.0 0.0 N. PA Dry Marcellus SW Wet & WV Marcellus and Legacy SW PA Dry Ohio Utica and Legacy 34

Northeast Production Growth is Only Limited by Takeaway Capacity 12.0 10.0 8.0 TGP NSD; NFG NE PA Forecast and Takeaway Capacity TGP to NYC; Transco Millennium Constitution TCO East Side Transco Leidy SE New England Takeaway? 6.0 4.0 2.0 0.0 North & Central PA Capacity Planned Source: BENTEK (revised 7-21-13)

NGL Supply Growth US supply growth from gas plants expected to reach 4.5 MMb/d by 2023 MMb/d 5.0 US NGL Production from Gas Plants 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Ethane Propane Normal Butane Iso Butane Natural Gasoline Source: Bentek 36

Nearly 80% of U.S. NGL Production Coming from 6 Regions by 2023 2013 Production 2023 Production Marcellus/ Utica, 125 Other, 986 Marcellus/ Utica, 794 Other, 995 Eagle Ford, 474 Bakken, 546 Bakken, 79 Rockies, 363 Eagle Ford, 949 Rockies, 403 Anadarko, 389 Total Production 2.37 MMb/d Permian, 389 Anadarko, 465 Permian, 465 Total Production 4.6 MMb/d 37

Northeast Fractionation Capacity and Pipeline Takeaway Capacity Mb/d 800 700 600 500 400 300 200 100 0 Fractionation Capacity Mb/d 800 700 600 500 400 300 200 100 0 Pipeline Takeaway Capacity PADD 1 C3+ Fractionation Capacity PADD 1 Ethane PADD 1 Ethane PADD 1 C3+ Mariner West ATEX Mariner East Bluegrass Fractionate in Northeast Satisfy demand markets for purity products Send Y-grade and fractionate in US Gulf Established infrastructure in the region Export from US Gulf provides option to supply to multiple foreign markets beyond Western Europe 38

Over 3 of Processing Plants Coming Online in the NE in 2013 39

Several New NGL Pipes Proposed By the end of 2015, could be as much as 1,178 MB/d of incremental NGL pipeline capacity into Mont Belvieu 40

$/Mmbtu (Real) Natural Gas Price Forecast $9.00 $8.00 $7.00 Vast increases in gas supply potential combined with subsidizing impact of NGL production keeps gas prices low throughout the forecast period. $6.00 $5.00 $4.00 $3.00 $2.00 Note: Price forecast as of Aug 12, 2013 NYMEX Bentek 41

Highlights Natural Gas production continues to rise driven by liquids focused producers. Production growth led by the Marcellus/Utica, Eagle Ford, and Anadarko basins. Diverging values for crude oil, natural gas liquids (NGLs) and natural gas drive investment decisions New assets for processing, transportation, fractionation and export are needed to balance markets Power generation demand rises as inroads into coal fired generation continue while industrial demand growth increases especially in the Gulf Coast. New North American gas production exceeds domestic demand growth in forecast; exports (LNG + Mexico) required to balance market 42