Small Cap Natural Gas Stocks McDep Ratio, Present Value and Cash Flow

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1 Small Cap Natural Gas Stocks McDep Ratio, Present Value and Cash Flow Rank by McDep Ratio 2 Rank by Enterprise Value to Ebitda 2 Cross Timbers Royalty Trust Table CRT-1 Present Value 3 Table CRT-2 Distributable Income 4 Dorchester Hugoton, Ltd. Table DHULZ-1 Present Value 5 Table DHULZ-2 Cash Flow 6 Hugoton Royalty Trust Table HGT-1 Present Value 7 Table HGT-2 Distributable Income 8 San Juan Basin Royalty Trust Table SJT-1 Present Value 9 Table SJT-2 Distributable Income 10 Energy Partners, Ltd. Table EPL-1 Present Value 11 Table EPL-2 Cash Flow 12 Kurt H. Wulff, CFA to a buy or sell rating. Mr. Wulff is not paid by covered companies. 1

2 Rank by McDep Ratio: Market Cap and Debt to Present Value Net ($/sh) Market Present Debt/ Symbol/ 10-Aug Shares Cap Value Present McDep Rating 2001 (mm) ($mm) ($/sh) Value Ratio Small Cap Dorchester Hugoton, Ltd.* DHULZ Swift Energy Company SFY Cross Timbers Royalty Tr* CRT San Juan Basin Royalty Tr* SJT Encore Acquisition Corporation EAC Penn Virginia Corporation PVA Hugoton RoyaltyTrust* HGT Energy Partners Ltd.* EPL Total or Median 3, Micro Cap Purcell Energy, Ltd. (US$) PEL.TO Buy/Sell rating after symbol: 1 - Strong Buy, 2 - Buy McDep Ratio = Market cap and Debt to present value of oil and gas and other businesses * For small cap stocks marked with asterisk, estimated present value recalculated weekly. Rank by EV/Ebitda: Enterprise Value to Earnings Before Interest, Tax, Deprec. Dividend or ($/sh) EV/ EV/ Distribution PV/ 10-Aug Sales Ebitda P/E NTM Ebitda Symbol E NTM NTM (%) NTM Small Cap Dorchester Hugoton, Ltd.* DHULZ Cross Timbers Royalty Tr* CRT San Juan Basin Royalty Tr* SJT Hugoton RoyaltyTrust* HGT Swift Energy Company SFY Encore Acquisition Corporation EAC Penn Virginia Corporation PVA Energy Partners Ltd.* EPL Median Micro Cap Purcell Energy, Ltd. (US$) PEL.TO EV = Enterprise Value = Market Cap and Debt; Ebitda = Earnings before interest, tax, depreciation and amortization; NTM = Next Twelve Months Ended June 30, 2002; P/E = Stock to Earnings; PV = Present Value of oil and gas and other businesses * For small cap stocks marked with asterisk, estimated present value recalculated weekly. to a buy or sell rating. Mr. Wulff is not paid by covered companies. 2

3 Table CRT-1 Cross Timbers Royalty Trust Present Value Decline (%/yr): 10 Escalation post 2007 (%/yr): 2.6 Enhancement (%/yr): 10 Discount Rate (%/yr): 6.6 U.S. TIPS Inflation (%/yr): 1.8 U.S. 10 Year Yield (%/yr): 5.2 PV/ ($/mcf): 2.21 PV/EBITDA 2002: 10.1 Natural Gas Oil Tax Present Basic Enhanced Total Revenue Net Distribution Credit Disc Value Year (bcf) (bcf) (bcf) ($/mcf) ($mm) ($mm) ($mm) ($/unit) ($/unit) Factor ($/unit) Total 2001 through to a buy or sell rating. Mr. Wulff is not paid by covered companies. 3

4 Table CRT-2 Cross Timbers Royalty Trust Distributable Income Next Twelve Q2 Q3 Q4 Year Q1 Q2E Q3E Q4E Year Q1E Q2E Months 6/30/00 9/30/00 12/31/ /31/01 6/30/01 9/30/01 12/31/ E 3/31/02 6/30/02 6/30/02 Highlights Tax credit ($mm) Per unit Distributable Income ($mm) Per unit Units (millions) Natural Gas (bcf) Natural Gas (mmcfd) Days Oil (mb) Oil (mbd) Days Total (bcf) Natural Gas (HH lagged three months) Henry Hub ($/mmbtu) Differential ($/mmbtu) (0.26) (0.03) CRT ($/mcf) Oil ($/bbl) (WTI lagged two months) WTI Cushing CRT Total ($/mcf) Revenue ($mm) Natural Gas Oil Total Cost ($mm) Tax, transport & other Production Total Cash flow ($mm) Development Excess Recovery of excess Net proceeds ($mm) Royalty income ($mm) Royalty/Net proceeds 87% 86% 86% 87% 87% 88% 87% 86% 87% 87% 87% 87% Administration (0.01) Distributable income ($mm) Modeling ratios Tax and other/revenue Production exp ($/bbl) to a buy or sell rating. Mr. Wulff is not paid by covered companies. 4

5 Table DHULZ-1 Dorchester Hugoton, Ltd. Present Value Decline (%/yr): 11 Escalation Post 2006 (%/yr): 2.6 Enhancement (%/yr): 7 Discount rate (%/yr): 6.6 Capex/Cash Flow (%): 20 U.S. TIPS Inflation (%/yr): 1.8 Variable Cost (%): 15 U.S. 10 Year Yield (%/yr): 5.2 PV/ ($/mcf): 1.82 PV/EBITDA 2002: 10.3 Fixed Var Cap Present Basic Enhanced Total Revenue Cost Cost Ex Free Cash Flow Disc Value Year (bcf) (bcf) (bcf) ($/mcf) ($mm) ($mm) ($mm) ($mm) ($mm) ($/unit) Factor ($/unit) Total 2001 through Other assets, net to a buy or sell rating. Mr. Wulff is not paid by covered companies. 5

6 Table DHULZ-2 Dorchester Hugoton, Ltd. Cash Flow Next Twelve Q3 Q4 Year Q1 Q2 Q3E Q4E Year Q1E Q2E Months 9/30/00 12/31/ /31/01 6/30/01 9/30/01 12/31/ E 3/31/02 6/30/02 6/30/02 Highlights Revenue ($mm) Cash flow ($mm) Per unit Earnings ($mm) Per unit Distribution ($mm) Per unit Units (millions) Natural gas (bcf) Oklahoma Kansas Total Natural Gas (mmcfd) Days Natural gas Henry Hub ($/mmbtu) Oklahoma ($/mcf) Kansas ($/mcf) Total ($/mcf) Revenue ($mm) Natural Gas Oklahoma Kansas Other Production payment (ORRI) (0.39) (0.47) (1.4) (0.72) 0.16 (0.6) - Total Cost ($mm) Operating General and administrative Management Other (0.07) (0.49) (0.3) (0.10) (0.19) (0.08) (0.08) (0.4) (0.08) (0.08) (0.3) Total Cash flow ($mm) Depletion, deprec. & amort Earnings ($mm) Capital expenditures ($mm) Cost ratios Prod pay/revenue 5.3% 5.3% 5.2% 5.9% -2.3% 0.0% 0.0% 2.0% 0.0% 0.0% 0.0% Operating cost ($/mcf) Depletion ($/mcf) to a buy or sell rating. Mr. Wulff is not paid by covered companies. 6

7 Table HGT-1 Hugoton Royalty Trust Present Value Decline (%/yr): 10 Escalation Post 2006 (%/yr): 2.6 Enhancement (%/yr): 10 Discount rate (%/yr): 6.6 Capex/Cash Flow (%): 25 U.S. TIPS Inflation (%/yr): 1.8 Variable Cost (%): 12 U.S. 10 Year Yield (%/yr): 5.2 PV/ ($/mcf): 1.13 PV/EBITDA 2002: 9.1 Fixed Var Cap Tax Present Basic Enhanced Total Revenue Cost Cost Ex Distribution Credit Disc Value Year (bcf) (bcf) (bcf) ($/mcf) ($mm) ($mm) ($mm) ($mm) ($mm) ($/unit) ($/unit) Factor ($/unit) Total 200 through to a buy or sell rating. Mr. Wulff is not paid by covered companies. 7

8 Table HGT-2 Hugoton Royalty Trust Distributable Income Next Twelve Q2 Q3 Q4 Year Q1 Q2E Q3E Q4E Year Q1E Q2E Months 6/30/00 9/30/00 12/31/ /31/01 6/30/01 9/30/01 12/31/ E 3/31/02 6/30/02 6/30/02 Highlights Revenue ($mm) (80%) Cash flow ($mm) (80%) Per unit Tax credit ($mm) Per unit Distributable Income ($mm) Per unit Units (millions) Natural Gas (bcf) Natural Gas (mmcfd) Days Oil (mb) Oil (mbd) Days Total (bcf) Natural Gas (HH lagged two months) Henry Hub ($/mmbtu) Differential ($/mmbtu) (0.03) HGT ($/mcf) Oil ($/bbl) (WTI Cushing lagged two months) WTI Cushing HGT Total ($/mcf) Revenue ($mm) Natural Gas Oil Total Cost ($mm) Tax, transport & other Production Overhead Total Cash flow ($mm) Development Net proceeds ($mm) Royalty income ($mm) Royalty/Net proceeds 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Administration (0.0) Distributable income ($mm) Cost ratios Tax and other/revenue 10% 10% 9% 9% 8% 9% 10% 10% 9% 10% 10% 10% Production cost ($/mcf) Overhead cost ($/mcf) Development/Cash flow to a buy or sell rating. Mr. Wulff is not paid by covered companies. 8

9 Table SJT-1 San Juan Basin Royalty Trust Present Value Decline (%/yr): 10 Escalation Post 2006 (%/yr): 2.6 Enhancement (%/yr): 10 Discount rate (%/yr): 6.6 Capex/Cash Flow (%): 25 U.S. TIPS Inflation (%/yr): 1.8 Variable Cost (%): 9 U.S. 10 Year Yield (%/yr): 5.2 PV/ ($/mcf): 1.20 PV/EBITDA 2002: 9.2 Fixed Var Cap Tax Present Basic Enhanced Total Revenue Cost Cost Ex Distribution Credit Disc Value Year (bcf) (bcf) (bcf) ($/mcf) ($mm) ($mm) ($mm) ($mm) ($mm) ($/unit) ($/unit) Factor ($/unit) Total 2001 through to a buy or sell rating. Mr. Wulff is not paid by covered companies. 9

10 Table SJT-2 San Juan Basin Royalty Trust Distributable Income Next Twelve Q2 Q3 Q4 Year Q1 Q2E Q3E Q4E Year Q1E Q2E Months 6/30/00 9/30/00 12/31/ /31/01 6/30/01 9/30/01 12/31/ E 3/31/02 6/30/02 6/30/02 Highlights Revenue ($mm) (75%) Cash flow ($mm) (75%) Per unit Tax credit ($mm) Per unit Distributable Income ($mm) Per unit Units (millions) Natural gas (mmbtu) Conventional Coal Seam Total Heat Content(btu/cf) 1,028 1,104 1,084 1,068 1,052 1,095 1,095 1,095 1,084 1,095 1,095 1,095 Natural gas (bcf) Conventional Coal Seam Total Natural Gas (mmcfd) Days Oil (mb) Oil (mbd) Days Total gas & oil (bcf) Natural gas ($/mmbtu) (Henry Hub lagged two months) Henry Hub ($/mmbtu) Differential ($/mmbtu) SJT Conventional SJT Coal Seam Total Natural gas ($/mcf) Conventional Coal Seam Total Oil ($/bbl) (WTI Cushing lagged two months) WTI Cushing SJT Total gas & oil ($/mcf) Revenue ($mm) Natural Gas - Conventional Coal Seam Total Oil Total Cost ($mm) Severance tax Operating Total Cash flow ($mm) Development Net proceeds ($mm) Royalty income ($mm) Royalty/Net proceeds 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 3.0 Administration One-time Distributable income ($mm) Modeling ratios Severance tax/revenue 9.0% 10.8% 9.0% 9.7% 9.9% 10.1% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% Operating cost ($/mcf) to a buy or sell rating. Mr. Wulff is not paid by covered companies. 10

11 Table EPL-1 Energy Partners, Ltd. Present Value Decline (%/yr): 20 Escalation post 2006 (%/yr): 1.8 Enhancement (%/yr): 45 Discount rate (%/yr): 6.6 Capex/Cash Flow (%): 100 U.S. TIPS Inflation (%/yr): 1.8 Variable Cost (%): 16 U.S. 10 Year Yield (%/yr): 5.2 PV/ ($/bbl): 3.10 PV/EBITDA 2002: 5.5 PV/Share ($): Fixed Var Cap Pre- Income Cash Present Basic Enhanced Total Revenue Cost Cost Ex Tax Tax Flow Disc Value Year (mb) (mb) (mb) ($/bbl) ($mm) ($mm) ($mm) ($mm) ($mm) ($mm) ($mm) Factor ($mm) Total 2001 through to a buy or sell rating. Mr. Wulff is not paid by covered companies. 11

12 Table EPL-2 Energy Partners, Ltd. Cash Flow Next Twelve Q3 Q4 Year Q1 Q2 Q3E Q4E Year Q1E Q2E Months 9/30/00 12/31/ /31/01 6/30/01 9/30/01 12/31/ E 3/31/02 6/30/02 6/30/02 Highlights Revenue ($mm) EBITDAX ($mm) Cash Flow ($mm) Per share ($) Net Income ($mm) 5.2 (32.9) (25.4) Per share 0.29 (1.73) Shares (millions) Natural Gas (bcf) Natural Gas (mmcfd) Days Oil (mb) , ,012 1,012 3,939 1,035 1,092 4,151 Oil (mbd) Total (mb) 1,147 1,394 3,752 1,466 1,477 1,549 1,625 6,117 1,710 1,850 6,734 Total (mbd) Natural Gas Henry Hub ($/mmbtu) Differential ($/mmbtu) (0.29) 0.67 (0.66) (1.24) (0.32) (0.13) EPL ($/mcf) Oil ($/bbl) WTI Cushing Differential EPL Total ($/bbl) Revenue ($mm) Natural Gas Oil Other (1.2) Total Cost ($mm) Lease operating Production taxes General and administrative Total EBITDAX ($mm) Other cash incl. int, tax Cash Flow ($mm) Exploration Deprec., Deplet.,& Amort Amort. Financing Cost Other non cash Income before income tax 8.4 (29.6) (14.5) Deferred income tax Net income ($mm) 5.2 (32.9) (25.4) Costs ($/bbl) Lease operating Production taxes General and administrative Deprec., Deplet.,& Amort Tax rate 38% 36% 35% 35% 35% 36% 35% 35% 35% to a buy or sell rating. Mr. Wulff is not paid by covered companies. 12

Small Cap Natural Gas Stocks McDep Ratio, Present Value and Cash Flow

Small Cap Natural Gas Stocks McDep Ratio, Present Value and Cash Flow Rank by McDep Ratio 2 Rank by Enterprise Value to Ebitda 2 Cross Timbers Royalty Trust Table CRT-1 Present Value 3 Table CRT-2 Distributable