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Investor Presentaiton

$/barrel (expressed in 2011 dollars) It's very difficult to predict future oil prices. Historically, people have frequently predicted we have entered a new era of permanently higher oil prices. But historically, oil prices have fluctuated widely, and have been very difficult to predict. In the early 1980s, "real" oil prices (adjusted for inflation) were at record high levels. Many people assumed oil prices would stay high. But oil prices fell to very low levels by 1986, leading to a severe recession in Alaska. The bottom line: Future oil prices are highly $120 $100 $80 $60 $40 $20 $0 40 uncertain. Average Annual Price of Crude Oil (adjusted for inflation) Source: Average annual price, West Texas Intermediate crude oil, from U.S. Energy Information Administration, www.eia.doe.gov/emeu/international/oilprice.html Oil prices are driven by both demand and supply! The sharp drop in oil prices in 2009 was caused by the sharp decline in demand due to a global economic recession. Costs of alternative energy forms, such as natural gas, coal, and nuclear energy, set an upper limit on oil prices over the long-term. 23
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