ENERGY SECTOR STOCK

PRESENTATIONJanelle R. Courtright

John C. Williams

Summer Quarter, 2007

SECTOR RECOMMENDATION

Continue to underweight to S&P 500

Recommend to keep holdings at 270 basis points below S&P

Look to underweight in the next 6 months− Short-term returns to outperform S&P

500− Long-term returns will under perform

Drop in oil prices, cheaper alternatives becoming more available

CRUDE OIL PRICES

Recommendation Sell all of Schlumberger, Ltd.

− 308 basis points

Buy 308 basis points of BP ADS

Hold Exxon (XOM) and Peabody (BTU)

Remain at 270 basis points below S&P 500

Schlumberger, Ltd.

SLB Profile World’s leading oilfield services

provider

Been in business since 1926

Mature company

Cyclical company

Main driver: OIL PRICES

DCF Valuation

SLB Absolute Valuations

StockVal®SCHLUMBERGER LIMITED (SLB) Price 87.741997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PRICE / YEAR-FORWARD EARNINGS0

20

40

60 HI 69.4 LO 13.7 ME 30.4 CU 18.4

08-01-199708-03-2007

PRICE / SALES2

4

6HI 6.09 LO 2.05 ME 3.75 CU 5.08

08-01-199708-03-2007

PRICE / EBITDA5

10

15

20 HI 99.9 +LO 6.5 ME 14.3 CU 13.9

08-01-199708-03-2007

PRICE / CASH FLOW ADJUSTED6

12

18

24 HI 27.8 LO 7.6 ME 16.6 CU 17.7

08-01-199708-03-2007

SLB Absolute Valuations

StockVal®SCHLUMBERGER LIMITED (SLB) Price 87.742002 2003 2004 2005 2006 20072002 2003 2004 2005 2006 2007 2008

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd1

2

3HI 3.15 LO 1.49 ME 2.16 CU 1.74

08-02-200208-03-2007

PRICE / EBITDA RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd0.8

1.2

1.6

2.4HI 99.90 +LO 0.91 ME 2.58 CU 2.64

08-02-200208-03-2007

PRICE / SALES RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd2

3

4

5 HI 5.19 LO 2.06 ME 3.61 CU 4.21

08-02-200208-03-2007

PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd0

1

2HI 2.72 LO 0.88 ME 1.88 CU 2.17

08-02-200208-03-2007

SLB Multiple Valuations

Absolute Valuation High Low Mean Current #Your Target Multiple

*Your Target E,S, B, etc/Share

Your Target Price (FxG)

A. B. C. D. E. F. G. H.P/Forward E 69.4 14.3 30.6 20 30.6 3.01 92.106P/S 6.09 2.05 3.75 5.44 3.75 16.32 61.2P/B 10.9 2.5 5.5 9.8 5.5 8.39 46.145P/EBITDA 99.9 6.5 14.4 15.2 14.4 3.98 57.312P/CF 27.8 7.6 16.6 19.2 16.6 3 49.8

Market Price 87.74

Avg $61.31

SLB OVERVALUED DCF Value is lower than market price

Target price is below current market price

Market Price of stock is too expensive based on valuations

Cyclical stock will fluctuate with the price of oil

Recommend: Sell

BP Profile Top 5 Energy Company

Mature company

Investing in and applying new, rapidly evolving technologies from new sources of energy that are low carbon and renewable

During 2006 renewable energy portfolio maintained a profit

Main driver: OIL PRICES

BP DCF

BP – Absolute Valuations

BP – Absolute Valuations

StockVal®BP PLC ADS (BP) Price 66.501997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd0.6

0.8

1.0

1.2 HI 1.23 LO 0.77 ME 1.01 CU 0.92

08-01-199708-03-2007

PRICE / EBITDA RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd0.6

0.8

1.0

1.2HI 1.55 LO 0.80 ME 1.12 CU 0.89

08-01-199708-03-2007

PRICE / SALES RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd0.4

0.8

1.2

1.6 HI 1.82 LO 0.65 ME 1.04 CU 0.68

08-01-199708-03-2007

PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P ENERGY SECTOR COMPOSITE ADJ (SP-10) M-Wtd0.8

1.0

1.2HI 1.35 LO 0.80 ME 1.01 CU 0.86

08-01-199708-03-2007

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

BP PLC ADS (BP)PRICE 66.50 DATE 08-03-2007PRICE 66.50 DATE 08-03-2007StockVal®

2727

2929

3232

3535

3838

4242

4646

5050

5555

6060

6565

7171

78

85

93

The Ohio State UniversityFisher College of Business

Price Change % Diff SP5

1-Day -3.60 -0.94

1-Week -4.25 -2.47

4-Weeks -9.52 -3.16

QTD -7.82 -3.14

YTD -0.89 -1.93

2006 4.48 -9.13

2005 9.97 6.96

2004 18.34 9.34 FYE Dec 2006 EPS 6.54

First Call Data 2007 2008 2009

Mean Estimate 6.20 6.61 7.16Change -5% +7% +8%

High 6.89 8.78 9.42

Low 5.75 5.35 6.15

Total 15 15 6

# Up 7 9 3

# Down 7 4 3

House Estimate

PE Ratio 10.7 10.1 9.3

Revenues ($Mil) 262,933

Market Value ($Mil) 237,818

Shares Out (Mil) 3,576.2

Volume 60-Day Avg (Th) 4,107

Volume 60-Day Avg ($M) 273.1

Dividend Estimate 2.48

Payout Ratio 40%

Retention Rate 60%

Dividend Yield 3.73%

Data Page # 1

BP UNDERVALUED DCF Value is higher than market

price

Absolute valuation shows value in stock

Company investing in future beyond petroleum

Recommend: Buy

Recommendation Sell all of Schlumberger, Ltd.

− 308 basis points

Buy 308 basis points of BP ADS

Hold Exxon (XOM) and Peabody (BTU)

Remain at 270 basis points below S&P 500

ANY QUESTIONS????

SLB DCF

BP DCF