Chalker Energy Partners, LP

2007 IPAA Private CapitalConference

Houston, TexasJanuary 2007

Background on Chalker?

Chalker I Formed in December 2003

Built an East Texas Focused Company

Exceptional Operational & Geological Team

Total Equity Commitment of $25MM from QEP II

Sold to Forest Oil for $225MM, Closed 3/31/06

Chalker II Up and Running

The Chalker I Team

Alan Smith President & CEO

Tom Campbell EVP & COO

Gary Hall VP – Geoscience

Larry Tolleson VP – Operations

Janie Isbell Sr. Engineering Tech

Gayla Massey Sr. Executive Assistant

Chalker I Strategy

Initially an Acquire/Exploit Approach in Tight Gas Sand Basins

Evolved into Drilling Strategy in East Texas

Focus in Cotton Valley Sands

Utilize Relationships & Local Knowledge to Access Opportunities

Leverage Engineering, Operational & Geological Strengths

Creative Deal Structures

Why Tight Gas Basins & Multiple Pays?

Longer Life Assets with Predictable Reserves

Higher Margin Assets – Lower Operating Costs

Few Dry Holes Drilled – Basin Centered Gas, Stacked Pays

East Texas Stratigraphy

- Rodessa - Cotton Valley A-D Sands

- Pettet - Bossier

- Travis Peak - Cotton Valley Lime

Technology has Enhanced Reserve Recoveries

Focus Areas

South Texas

East Texas

Panhandle4 County

Drilling Area

Chalker I Results

Made 17 Producing Property Acquisitions - $17MM

Acquired 16,000 Net Acres in Cotton Valley - $6MM

Gained Access to Three Drilling Rigs

Drilled 42 Wells, 30 Operated, All Successful

Spent $46MM Through the Drill Bit, Avg F&D $1.40/Mcfe

Lease PositionEast Texas

Production – Base + UpliftActual Results

-

2

4

6

8

10

12

14

16

Jan-05

Feb-05

Mar-05

Apr-05

May-05

Jun-05

Jul-05

Aug-05

Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

(Mm

cfed

)

Base Uplift

1 Rig 3 Rigs

PNP5% PDP

71%

PUD24%

Reserves & Production Summary

4.45.5

4.4 3.93.4 3.8

14.4

10.0

6.4

1Q 2A 3Q 4Q 1Q 2Q 3Q 4Q 1QE

2004 2005 2006

Production

PNP13%

PDP24%

PUD63%

Proved Reserves

2005 YE112.8 Bcfe, 90% Gas

2004 YE15.7 Bcfe, 58% Gas

Chalker I Sale

Proved Up Acreage Thru the Drill Bit Excellent Market Fundamentals Simmons & Griffis Ran a Formal Process Forest Preempted with Signed PSA on 2/9/06 Sales Price - $225MM

Reserve Cost - $2.32/Mcfe (Announced) Production Multiple - $19,900/Mcfed

(Announced) Outstanding Results

ROI – 7.4X IRR – 331%

Lessons Learned

We can Make Money in Up or Down Cycle – Must Adjust Acquisitions & Drilling Allocations

In Drilling Mode, Land Function Highly Critical

Deal Creativity is Very Important

Geographically Focused Asset Base Adds Significant Premium at Exit

Equity Partner Can & Did Add Value in Managing Leverage, Risk Management, Exit Deal Structure & As a Technical Sounding Board

Chalker II Formation & Strategy

Smith is Chairman of Chalker II, Full-Time at Quantum

Doug Krenek Joined Chalker Team, April 1, 2006 as President & CEO

Equity Commitment of $50MM from QEP III, $7MM from Management and Other Investors

Continued Focus in East Texas & Other Tight Gas Basins in Texas

Leverage Off of Technical Knowledge in Focus Areas

Be Opportunistic!

The Chalker II Team

Alan Smith Chairman

Doug Krenek President & CEO

Gary Hall VP – Geoscience

Larry Tolleson VP – Operations

Bill Dukes VP - Land

Janie Isbell Sr. Engineering Technician

Chalker II Update

Closed Two Acquisitions - $50MM

• $45MM Acquisition in Rusk County

• $5MM Acquisition in North Texas

Total Net Acerage – 35,000 Acres

• East Texas – 13,000 Acres

• Houston County – 14,000 Acres

• North Texas – 8,000 Acres

Current Production – 4.5 Mmcfed

Four Rigs Running in East Texas

2007 Drilling Capex - $60MM