Carlyle/Riverstone to Invest $250 Million in Phoenix Exploration Company, a New Oil and Gas Company Focused on Exploration and Acquisitions in the Gulf Coast and Gulf of Mexico Shelf Regions; Leadership Team Has Proven Record of Value Creation

New York, NY and Houston, TX – With an initial financial commitment of $250 million from Carlyle/Riverstone Global Energy and Power Funds, a team of exploration and production executives today announced the formation of a new company for oil and gas exploration and property acquisitions in the Gulf Coast and Gulf of Mexico regions. Phoenix Exploration Company, headquartered in Houston, Texas, will be led by a team of five energy industry veterans who most recently were associated with the highly successful performance of Gryphon Exploration Company. Funds for the investment will come from Carlyle/Riverstone Global Energy and Power III, LP, a $3.8 billion fund.

David M. Leuschen, Co-founder of Riverstone, said, "Bill Flores and his management team have extensive and distinguished careers in the oil and gas industry. Their track record is well established, as evidenced by their prior success at Gryphon, and they have a common vision of how to build value in today’s competitive environment. We are excited to pursue opportunities in a geographic area where the Phoenix management has had considerable success."

William H. Flores, Chief Executive Officer of Phoenix, said, "Our goal is to build a dynamic and agile company focused on value creation. A proven team and business strategy with access to capital and a proven energy investor in Carlyle/Riverstone will enable us to efficiently execute our strategy of exploration and acquisitions. We look forward to working with the Carlyle/Riverstone team and appreciate their confidence and support. With this initial commitment, we are now actively building a proven, experienced exploration team and a robust exploration infrastructure to support their efforts. Also, with the core leadership of our operations and business development teams in place, we are assembling the remaining elements of a group of high performance individuals who know how to create value and operate efficiently with an emphasis on safety and integrity. The environment in which we operate today is challenging, but nonetheless, it is full of opportunities for teams that focus on these attributes. I am happy to be associated with such a team."

Daniel A. D’Aniello, Co-founder of The Carlyle Group, said, "Carlyle/Riverstone funds achieve premium returns through innovative and thoughtful investing. We have great confidence that Phoenix will sustain and bolster this track record."

The principals of Phoenix each most recently served in senior positions at Gryphon. Gryphon was formed in late 2000 and was acquired in August 2005 by Woodside Energy for approximately $310 million. Gryphon was capitalized by equity contributions from its management team and Warburg Pincus, as well as the contribution of certain assets from Cheniere Energy.

Executive Team

William H. Flores, Chief Executive Officer: Mr. Flores served as Senior Vice President and Chief Financial Officer of Gryphon until September 2005. While at Gryphon, he was responsible for all finance and administrative functions, including M&Amp;A, planning, hydrocarbon marketing and hedging activities. Prior to Gryphon, Mr. Flores served as Senior Vice President and Chief Financial Officer of Western Atlas from 1997 until its sale to Baker Hughes and as Chief Financial Officer and Chief Operating Officer of Marine Drilling Companies from 1990 to 1997. Mr. Flores, a CPA, earned his BBA from Texas A&M University and his MBA from Houston Baptist University and has more than 20 years of industry experience.

Stephen E. Heitzman, Chief Operating Officer: Mr. Heitzman is an engineer and team leader who was responsible for the formation, staffing and supervision of the Operations Team of Gryphon from 2000 through January 2006. While at Gryphon, he oversaw aggregate capital expenditures of more than $250 million and led the team that was responsible for industry leading metrics. Prior to Gryphon, Mr. Heitzman was Senior Vice President of Planning and Development for Harken Energy, Vice President of Engineering for ATP Oil & Gas, and held various engineering and management positions both domestically and in Indonesia for Roy M. Huffington, Inc. Mr. Heitzman earned his BS in Mechanical Engineering from Texas Tech University and has more than 30 years of industry experience.

John A. Parker, Senior Vice President of Exploration: Mr. Parker was a founder of Gryphon and a key contributor to the company’s success, responsible for a significant portion of Gryphon’s discovered reserves. Mr. Parker also played an active role in Gryphon’s liquidity event. While at Gryphon, he was Exploration Manager of the Texas Shelf, where he developed new play areas in Texas, generated many prospects and made several significant discoveries. Prior to joining Gryphon, Mr. Parker was Project Geologist at EOG Resources and Province Leader in the Gulf Coast Onshore for Shell Oil Company. Mr. Parker earned his BA from Louisiana State University and his MS in Geology from the University of New Orleans and has more than 22 years of industry experience.

Timothy S. Duncan, Senior Vice President of Business Development: Mr. Duncan joined Gryphon as the Manager of Reservoir Engineering and Evaluation in December of 2000, shortly after the Company’s formation. While at Gryphon, he led all of the Company’s evaluation efforts, including exploration portfolio management, reservoir management, corporate asset and business development evaluations. Prior to Gryphon, Mr. Duncan worked for Amerada Hess, Zilkha Energy and Pennzoil Exploration & Production in various evaluation capacities in the Gulf of Mexico and Gulf Coast areas. Mr. Duncan earned his BS in Petroleum Engineering from Mississippi State University and his MBA from the Bauer Executive Program at the University of Houston.

Keith O. Westmoreland, Senior Vice President of Operations: Mr. Westmoreland served as Production Manager for Gryphon from 2001 through early 2006, where he was responsible for production, safety and environmental management for offshore operations. During that period, Gryphon achieved several significant operating performance benchmarks. Mr. Westmoreland began his career at ARCO as a production engineer, and held various positions in engineering and operations in both offshore and onshore projects. Mr. Westmoreland earned his BS in Petroleum Engineering from Texas A&M University and has more than 23 years of industry experience.