31 May 2015 Integrated Oil US Integrated Oils Updated Equities Outlook Getting a Bit Defensive Given the relatively cautious medium-term oil price outlook, our preference remains largely for names whose combination of asset quality and balance sheet allow them to support moderate, capital efficient growth within a moderate oil price environment. We upgrade OXY to BUY and downgrade HES to HOLD (additional color within). Other preferred names include MRO, DVN, EOG. Figure 471 Key metrics for the group WA 103 .0r% 20% 14% .51% .0l% 1f, 51, 10% 2% ft% CCP 21 1-10I 31% 1 514 • d% r0. )0, 03.51 311 V% r==nr=rmilmilil"ii311MIMIIIMMINIC:=Itaill:MilalrEhiiiltia/CiiiiiUladrAllik—B.....«77„WraiiiIrdalflifiliffilillaifilifiliffiThIrdifilEMINEMEll FOG (3611 1% 2114 0 1% -3 2% -I V% Pt. It. 47% :14 00% allinillillEtlir 813 illIIIIMIIIIIIHNIMINMEEMINKIIIIIIIIIIMINSMIIIIIIIIMAWIIIIIIIE4CillaellinanfillillinntenlIIIIIIIMIIIIIIIMIIIIIIIIKIIIIIIIMIIIIIEIIIIIIIIIMISIIIIIII9 alifillitininiginillitifilliniEnnilla ..a.mffithatonitita..1147.ilaniiiii....a.....,...;;;,......ffiaithinoui NEL 0i0.32 2% 34% 16% .70% •l I% 8l. II, 03% 15% 1614 ClitithEill00105211340112100000220000101110040004001IIII00001210301010000ffillitlifiC11010n1liaililliiillffaMililliMilliMMIONIfflillillIMINKillinillilllifflililliallillifillinillifillilillinaltnitilliiiIIIII 1300 0.3 0% if% 01% -1%5 .1 5% 1381 II 0. 45% in 21% Sane Deurrere erns We provide two scorecards (Figure 48) for the two types of investors - ones favoring a relatively defensive positioning (which we favor) and ones playing an oil price bounce. Although several key investment attributes, such as select qualitative drivers (e.g. near-term catalysts), NAV-based valuations, etc fall outside of the scope of this exercise, we use the scorecards to help frame our view on stock-specific calls. When stacking up the names by focusing mostly on key metrics for a defensive positioning - 4015 annualized outspend (% of market cap), net debt/total cap, div yield, FCF yield, EV/DACF multiple, CF/DAS growth, and liquids leverage (the lower the better) - we find that OXY, MRO, APA, COP and DVN round out the top five. Interestingly, we find that MRO and OXY both stack up well (1st and 5th, respectively) in the "oil bounce" scorecard, one in which four key metrics are taking into consideration - EV/DACF multiple, headline production growth CAGR (2015-2017), CF/DAS growth (2015-2017) and liquids leverage (the higher the better). Deutsche Bank Securities Inc. Page 29 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058880 CONFIDENTIAL SDNY_GM_00205064 EFTA01367347