Latigo Petroleum, Inc. Announces Formation and Funding of New Oil and Gas Company in Mid-Continent

Business Wire, Dec 17, 2002

Business Editors & Energy Writers

TULSA, Okla.--(BUSINESS WIRE)--Dec. 17, 2002

Warburg Pincus and JPMorgan Partners Team With Veteran Energy

Management Group Led by Randy Foutch to Build a New Exploration and

Production Company

Latigo Petroleum has secured a $300 million equity program from Warburg Pincus LLC and JPMorgan Partners. Latigo's management will also invest in the program, with funding from all parties to be provided over time and subject to certain conditions.

Randy A. Foutch, founder, Chairman and CEO of this newly formed, Tulsa-based independent oil and gas company, announced today that Latigo Petroleum will launch an exploration and development drilling program, and make strategic acquisitions in targeted areas within the Mid-Continent region of the United States.

"I am pleased to have the opportunity to once again launch a company with two of the most highly regarded and experienced private equity investors in this sector," said Foutch. "In forming this venture we are focused on acquiring and exploiting acreage with proven reserves while concurrently exploring for hydrocarbons in less developed areas," he said.

Previously Foutch was the founder, Chairman and CEO of Lariat Petroleum, Inc., an exploration and production company focused in the Anadarko Basin in Oklahoma. Lariat was founded in 1997 and sold in January 2001 to Newfield Exploration Company (NYSE:NFX) for approximately $333 million. In launching Latigo, Foutch is joined by several members of the management team that helped build Lariat Petroleum and by other industry senior managers.

Latigo's targeted areas of the Mid-Continent Region will be located in the Arkoma, Anadarko and Permian Basins. Latigo initially will concentrate on areas within the Arkoma Basin to generate drilling prospects and selected acquisitions.

Jeffrey A. Harris, a Warburg Pincus Managing Director, said: "Our investment in Lariat was very successful due primarily to Randy Foutch and his talented management team. We are thrilled to have the opportunity to once again partner with them to take advantage of the under-exploited Mid-Continent region." Peter R. Kagan, also a Warburg Pincus Managing Director, added: "We believe Latigo is well positioned to become an industry leader, particularly in light of today's market pressure for producers to economically find and develop reserves in the United States. This investment is consistent with our practice in the energy sector of backing strong management to build meaningful companies."

"We are pleased to partner with the Latigo management team who bring deep regional experience to the table and are committed to building an equity-oriented company in the oil and gas arena," said Arnie Chavkin, Partner of JPMorgan Partners. "Our firm is committed to supporting ventures such as Latigo in the oil and gas sector and feel that this will be a strong addition to our other ventures in this area," Chavkin said.

In the second quarter of 2003, Latigo intends to expand its activities into the Anadarko Basin, the principal area of activity for Lariat Petroleum, Inc. Latigo will also consider selective opportunities located in the Permian Basin. Latigo intends to pay very close attention to the activity and opportunities that occur in each of its targeted areas.

About Latigo Petroleum

Latigo Petroleum, Inc. is a newly-formed independent oil and gas company with headquarters in Tulsa, Oklahoma. Latigo's strategy is to conduct an active exploration and development drilling program and to make strategic acquisitions in a targeted area of the Mid-Continent Region of the United States.

About Warburg Pincus

With nearly $10 billion under management and approximately $6 billion available for investment, Warburg Pincus has been a leading private equity investor since 1971. The firm has invested more than $14 billion in over 466 companies in 29 countries. Warburg Pincus has invested approximately $400 million in early stage exploration and production companies over the last 12 years including; Newfield Exploration (NYSE:NFX), Lariat Petroleum, Spinnaker Exploration (NYSE:SKE), Encore Acquisition Company (NYSE:EAC) and Bill Barrett Corporation. Warburg Pincus has also taken an active role in building businesses with energy companies involved in energy and power, oilfield and other services. Throughout its history in private equity, Warburg Pincus has invested at all stages of a company's lifecycle, from founding start-ups and providing growth capital to leading restructurings, recapitalization and buyouts. For more information, please visit www.warburgpincus.com.

About JPMorgan Partners

JPMorgan Partners (JPMP), formerly Chase Capital Partners, is a global partnership with over $25 billion under management. It is a leading provider of private equity and has closed over 1,000 individual transactions since its inception in 1984. JPMP has more than 150 investment professionals in eight offices throughout the world. JPMorgan Partners' primary limited partner is J.P. Morgan Chase & Co. (NYSE:JPM), one of the largest financial institutions in the United States. For additional information, please visit our website at www.jpmorganpartners.com.