Development and Acquisition of Natural Gas and Oil Reserves

About

Formed in 2001, Laredo Energy is a privately held company engaged in the acquisition and development of natural gas and oil reserves in South and East Central Texas. Laredo has more than 360 Bcfe in proved reserves and more than 58 MMcfe per day in gross operated production. The company’s assets include 40 operated producing wells, more than 140,000 gross acres of operated leases and non-operated interests in more than 31,000 gross acres. Laredo expects to drill 25 to 30 wells per year.

The company’s management team has has drilled more than 300 wells in South Texas. Laredo continues to target multi-stacked natural gas pay zones in Webb County. Today Laredo is also leasing acreage in Brazos, Burleson and Robertson counties where we are targeting the emerging Eaglebine formation. Laredo is backed by private equity investments from Avista Capital Partners and Old Ironsides Energy, LLC.

Since 2001, Laredo Energy has sold the majority of its assets to larger public companies on three separate occasions. On October 31, 2003, Laredo Energy and certain working interest partners sold a portion of their producing and undeveloped properties to Chesapeake Energy Corporation (NYSE: CHK) for $200 million. Production at the time of the sale was approximately 30 MMCFE per day. Chesapeake announced that they acquired an estimated 196 BCFE of reserves, of which 108 BCFE are proved and 88 BCFE are possible or probable.

On March 31, 2005, Laredo Energy and certain working interest partners sold a portion of their producing and undeveloped properties to Chesapeake Energy Corporation for $369 million. The assets consisted of approximately 41,000 gross (38,400 net) acres with 415 BCFE of proved and probable reserves. Gross daily operated production at the time of the sale was approximately 40 MMCFE per day.

On January 1, 2007, Laredo Energy and certain working interest partners sold a portion of their producing and undeveloped properties to El Paso Corporation for $255 million. The assets consisted of approximately 27,000 gross (23,000 net) acres with 84 BCFE of proved reserves. Gross daily operated production at the time of the sale was approximately 19 MMCFE per day.