Exhibit 99.1

Forward-Looking Statements

Statements contained or incorporated by reference in these slides regarding

future events and developments are “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933. Forward-looking
statements are based on management’s beliefs and assumptions that derive from
information currently known by management. Because such statements are
based on expectations and not historical facts, actual results may differ materially
from those projected in the particular statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date of this document, or in the case of documents incorporated by
reference, as of the date of those documents.

Additional detailed information concerning a number of factors that could cause

actual results to differ materially from the information that is provided to you here
is readily available in our annual report on Form 10-K filed with the Securities and
Exchange Commission on February 16, 2007.

Contact:

Steven M. Schein

VP – Investor Relations

812-491-4209

sschein@vectren.com

ProLiance Energy

Vectren Source

Miller Pipeline

Energy Systems Group

Prosperity Mine

Energy Marketing

& Services

Energy Infrastructure

Services

Coal Mining

Cypress Creek Mine

Strong utility operations supported by

complementary nonutility businesses

Gas Utility Operations

Customers: 995,000

Assets: $2.0 billion

States served: Indiana, Ohio

Electric Utility Operations

Customers: 141,000

Assets: $1.3 billion

States served: Indiana

Core Businesses

Utility Strategies

Consistent, stable earnings growth

Rate base growth over 5%

Timely rate relief/earnings stabilization

Maintain strong capital structure

Control O&M

Earn allowed returns

Nonutility Strategies

Linked to core utility business

Reinvest earnings

Acquire gas storage capacity

Develop and market new coal reserves

Expand replacement of aging infrastructure

Advance energy efficiency opportunities

Our Goals

Increase utility earnings at an average annual rate of 3.5% to 4%

Increase nonutility earnings at an average annual rate of 10+%

Increase Vectren EPS at an average annual rate of 5+%

Continue superior dividend record – 47 consecutive years of increased dividends

Provide a total return to shareholders of 9+%

Positioned For Growth

Highlights

Low-Risk Utility Platform Positioned for Growth

–

Rate base growth at 5+%

–

Timely and equitable regulatory treatment

•

2007 incremental revenue from lost margin recovery over 2006 between $9-$11 mm

•

South Gas & Electric rate relief 3^rd Qtr 2007 - Settlement agreements on file -

$10-$15 mm in 2007, remainder in 2008

•

Obtain rate relief in Indiana North & Ohio in 2008

Successful and Sensible Nonutility Businesses

–

Primary businesses closely aligned with utility & sustainable long-term growth

•

90% of coal is pre-sold in 2007 at 4-5% average price increase

•

Optimize use of natural gas storage and midstream assets through ProLiance

•

Miller Pipeline 100% owned – exited meter reading and line locating

•

ESG growth through energy conservation programs and recurring revenues

Strong Financial Position and Clear Path to Future Earnings Growth

–

Continue history of dividend increases – 47 consecutive years

–

Increase Vectren EPS at average annual rate of 5+%

Q1 2007 Highlights

1^st Quarter 2007 EPS, exclusive of synfuels, of $0.88 per basic share

compared to $0.75 per basic share in 2006, an increase of 17%

–

1^st Quarter 2007 EPS, inclusive of synfuels, of $0.92 per basic share

compared to $0.76 per basic share in 2006.

Fiscal 2007 earnings guidance reaffirmed with emphasis at upper

end of the range of $1.65 to $1.80, exclusive of synfuels

Filed settlement agreement with IURC on proposed increases to

Vectren South gas base rates, hearing on settlement agreement held
March 23 – order expected within 90 days from hearing

Filed settlement agreement with IURC on proposed increases to

Vectren South electric base rates, hearing on settlement agreement
to be held May 3 – order expected within 90 days from hearing

First Call’s 1^st Quarter consensus estimate - $0.79

–

Emphasis on upper end of annual range of $1.65 - $1.80

–

Approved South gas and electric orders will improve opportunity to earn allowed ROE

Low risk utility platform positioned for growth

–

Earnings from utility operations increased $7.5 million

Nonutility businesses closely aligned with the utility for sustainable long-term growth

–

Earnings from nonutility businesses, exclusive of synfuels results, increased $2.1 million

Synfuel earnings for 2007 estimated between $0.11 - $0.13

–

Synfuel operations contributed earnings of $3.4 million, or $0.04 per share in 2007

compared to $0.7 million or $0.01 per share in 2006

–

100% hedge of planned production

–

“Mark to market” accounting on spreads impacts timing of earnings recognition

1^st Quarter Sets Tone For Future

Utility Operations 1^st Quarter Results

Earnings per Share

Gas Margin increased $15.9 million

Higher usage including lost margin recovery increased

margin $7.2 million

Ohio weather 1% warmer than normal & 6% colder than

Q1 2006 increased gas margins $2.4 million

Pass through riders & taxes increased $5.9 million

Electric Margin increased $0.4 million

Increase related to weather of $1.2 million

Offset by lower wholesale and municipal

O&M flat quarter over quarter excluding $5.6

million increase related to pass through
expenses recorded dollar for dollar in
margin

Ohio Bad Debt and PIPP, Indiana Integrity Management &

Energy Efficiency Programs offset by Nox/Multipollutant

$0.10 EPS increase quarter over quarter

$0.05 - Lost margin recovery and usage

–

Similar lost margin recovery expected in Q4

$0.03 - Weather -- Ohio $0.02 & Electric $0.01

Target 3.5% to 4% long-term average

annual increase in utility earnings

Utility Business Growth Strategy

Continued focus on O&M control

–

2006 growth managed below 1% excluding

propane sale credit

–

Q1 2007 Flat excluding pass through trackers

Continued investment in utility rate base

–

5+% rate base growth next 5 years

Consistent, stable earnings growth

Achieve allowed returns at each utility

growth

Target 3.5% to 4.0% annual EPS

Rate Base

Vectren Utility Holdings

Gas

North

(Indiana Gas)

South

(SIGECO)

Gas

Electric

Gas

Ohio

(VEDO)

Consistent Rate Base Growth

Air emissions reductions since

1970

National

–

SO2 emissions are down 40%

–

NOx emissions are down 70%

Vectren

–

SO2 emissions are down 90%

–

NOx emissions are down 80%

Electric Generation by Fuel Type

(in billion kWh)

Source: EIA Annual Energy Outlook

2007

Wholesale Power Marketing

Functions within the regulated

electric utility operation

Markets surplus power from

generating units through MISO

History

Forecasts

Electricity Demand

Competitive Power Generation Facilities

Generation Portfolio

Coal-fired base units – 1,006 MW

–

Burn 3+ million tons of coal annually

–

Affiliate agreements in place for 90%

of coal needs

–

125 MW base load need - 2011

Gas-fired peak-use turbines – 295

Lost Margin Recovery Mechanism/Conservation

Tariffs effective Sep
2006 (Ohio) and Dec 2006

(Indiana North)

Normal Temperature Adjustment (NTA) effective

Oct 2005 (Indiana North and South)

Total Gas Margin

12 months ended 12/31/06

Commercial

21%

Industrial

13%

Residential

66%

Weather protected margin includes base

load consumption and fixed service charges

Lost margin recovery mechanisms for

Vectren South requested as part of general
rate order

Residential and Commercial Gas Margins

Residential and Commercial Gas

Margins

Stabilizing Gas Margin

Vectren South Gas Base Rate Case

Key Points

Favorable accounting treatment of annual expenditures associated with new, multi-year bare

steel and cast iron replacement program

–

Accrual of AFUDC and deferral of depreciation expense after placed in service but before placed in

rates – annual expenditures up to $3 million per year and up to 3 years on each project

Gas cost expense related to bad debts and unaccounted for gas removed from base rates to

be recovered through the existing gas cost adjustment mechanism

Lost margin recovery mechanism excludes the 15% adjustment currently used in North

territory

Petitioner’s

Case-in-Chief

Intervener

Filings

Settlement

Hearing

Order

1^st Hearing

Settlement

Reached

9/1/06

1/30/07

12/4/06

3/16/07

3/23/07

Within 90

Days

Vectren South Electric Base Rate Case

Key Points

Continued timely recovery of ongoing costs associated with the Midwest Independent System Operator

(MISO)

Recovery of return at FERC approved rates and recovery of expenses pertaining to approved Regional

Expansion Criteria and Benefit Process (RECB) transmission investments mandated by MISO greater than
50% of Transmission 5-year CapEx of $160 million

Creation of a 50/50 sharing arrangement with customers of Wholesale Power Marketing margins above

and below the annual base rate level of $10.5 million

Increased O&M expenses necessary to maintain and improve customer reliability and expenses related to

managing the aging workforce to ensure proper knowledge transfer, safety and system reliability

Environmental CWIP recovery continued under Indiana SB29

Petitioner’s

Case-in-Chief

Intervener

Filings

Settlement

Hearing

Order

1^st Hearing

Settlement

Reached

9/1/06

2/29/07

12/11/06

4/20/07

5/3/07

Within 90

Days

Constructive Regulatory Environment

Accomplishments

Timely recovery of environmental & clean coal generation expenditures

–

NOx - $255 million – Aug. 2001 – Dec. 2005

–

Multi-pollutant – $110 million – Feb. 2006 – Dec. 2008

Normal temperature adjustment implemented in Indiana - Oct. 2005

ProLiance service agreement extended through 2011 - Apr. 2006

Ohio decoupling/conservation order - Sep. 2006

Honda expansion - 10-year service contract - Sep. 2006

Indiana decoupling/conservation order - Dec. 2006

Pending/Planned

South Gas rate case filed - Sep. 2006 – Expected order Jun./Jul. 2007 (settlement filed Mar.

15 and hearing held Mar. 23, 2007)

South Electric rate case filed - Sep. 2006 – Expected order Jul./Aug. 2007 ( settlement filed

Apr. 20 and hearing to be held May 3)

IGCC generating facility petition filed - Sep. 2006 (Feed Study filed Apr. 2, hearing scheduled

June 18, and expect decision Oct. 2007)

Expect to file North rate case in April/May 2007 and VEDO in June/July 2007 time frame

$1,500

$300

$160

$80

$175

(in millions)

–

capital expenditures with timely rate
relief rec overy

–

SB - 29 recovery for environmental

and new clean coal generation

–

Generation strategy under review

–

Provisions for new transmission &

bare steel/cast iron included in recent
settlements

–

Remaining capital expenditures

approximate depreciation

Rate Base Growth

6.7% 3-year CAGR

5.2% 5-year CAGR

5-year Total Utility

Cap Ex

Major Expenditures

–

Generation Plant

–

Electric Transmission

–

Environmental

–

Bare Steel/Cast Iron

Utility Capital Summary

Growing Electric and Gas Rate Base

Equity Forward Rationale

Sell equity to permanently finance capital invested in Vectren South

Draw down proceeds following implementation of new South Gas and Electric rates

Equity issuance supports credit ratings and regulatory initiatives

Minimal, if any, dilution in 2007

Vectren Credit Facilities

Utility - $520 million

Nonutility - $274 million

Strong Credit Ratings

ProLiance Stand-Alone Credit Facility

Available at peak - $400 million

As of Dec. 31,

2006

Liquidity and Credit Ratings

Vectren Enterprises

ProLiance

Energy

Vectren

Source

Energy

Marketing and
Services (EMS)

Coal Mining

Operations

(CM)

Energy

Systems

Group

Miller

Pipeline

Cypress

Creek Mine

Prosperity

Mine

Earnings Per Share

(EMS, CM & EIS)

Energy

Infrastructure
Services (EIS)

ProLiance record earnings in 2005 from market

volatility created by gulf coast hurricanes

2007 Synfuel production 100% hedged

(1)

The Right Nonutility Businesses

Nonutility Business Growth Strategy

Growth through reinvestment of earnings

–

Expansion of Liberty Gas Storage – 6 Bcf in 2007

–

Acquired 80 million tons of coal reserves

–

Purchased remaining 50% of Miller Pipeline

Continued to narrow focus of nonutility

businesses

–

Sold broadband investment

–

Exited meter reading and line locating businesses

Target 10+% annual EPS growth

ANR

Columbia Gas

Columbia Gulf

Midwestern Gas

Panhandle Eastern

Southern Natural

Tennessee Gas

Texas Gas

Texas Eastern

Trunkline Gas

Storage Capacity

Pipeline Access

ProLiance Energy

Storage & Transportation Optimization

75% of earnings stream

6 Bcf of Liberty Gas Storage scheduled to be

fully operational in 2007

Retail Gas Marketing

1,300 commercial and industrial customers

Wholesale Services

Members’ gas supply agreement extended

until 2011

Utilities, municipals, power generators and

other marketers

Midstream Investments

Two intrastate pipelines

Three storage fields

#1 Gas Marketer 2006 – MastioGale Annual

Natural Gas Marketer Customer Value
Study

100 + employees - based in Indianapolis, IN

Approximate sales volumes of 1 Bcf per day

Balanced book approach

Standalone credit facility

JV – 61% owned by VVC – governance 50/50

Annual Tons

(S) Scrubbed plant

(SU) Scrubber under

construction

Power plant

Mine site

Indiana Southern

Rail Road

CSX Rail Road

Cities

Legend

Oaktown Mines #1 & #2 – underground mines

~80 million tons of reserves – high-sulfur 6.0 lbs

SO2

~5 million tons projected to be mined annually when

fully operational

Competitive location - Land acquisition complete

–

Within 50 miles of 8 coal-fired plants

–

Adjacent to low-cost mainline rail service

–

Within 10 miles of proposed Duke/Vectren IGCC plant

Ordered

Initial

Equipment

Break

Ground on

Oaktown
#1

Oaktown #1

Operational

State

Mining
Permits

Approval

Break

Ground on

Oaktown #2

2006

2007

2008

2009

Oaktown #2

Operational

2010

Executed

Option on

Reserves

2006

Coal Mining Operations

Supplies Vectren’s generating plants approximately

3 million tons annually

Regulatory support for Indiana coal generation

100% of coal is presold for 2007 and 2008

–

4% to 5% average price increase for 2007

–

40% of coal sold in 2008 has price reopener

Prosperity Mine – underground mine

~31 million tons of reserves – mid-sulfur 3.5 lbs

SO2

~3 million tons mined per year

Cypress Creek Mine – surface mine

~2.5 million tons of reserves – high-sulfur 7.5 lbs

SO2

~1.2 million tons mined per year

Miller Revenue

12 months ended 12/31

Construction - Performance Contracting

Development of energy efficiency facility

improvements that pay for themselves from
energy/operational savings

Territory expansion and development of

recurring revenues

Renewable natural gas & waste to energy

projects

170 employees in 14 states

ESG Back Log

As of 12/31

Energy Infrastructure Services

Gas Pipeline/Waste Water

Construction and Repair

Replacement of aging infrastructure

100% ownership by Vectren on July 1, 2006

One of the largest gas distribution contractors

in the United States

Over 50 years of construction experience and

over 1,300 employees

Future Presents Opportunity

2007 and 2008 outlook

Full year benefit from decoupling/conservation orders and lost margin recovery mechanisms

Partial year benefit from South gas and electric rate cases - full year in 2008

Managed O&M growth – 2007 target below 3% with most increases recovered through trackers

or tied to rate cases

Rate base growth of 5+% long-term

FERC return on greater than 50% of transmission investment and recovery of expenses

pertaining to approved RECB investments

North and Ohio rate cases to be filed Q2 or Q3 2007 with expected orders in 2008

Significant increase in gas storage capacity at ProLiance

Continued use of highwall miner at Cypress Creek

Price reopener on 40% of 2008 coal production

Full year benefit of owning 100% Miller Pipeline with expanding territory and replacement of

aging infrastructure

Continued growth at Energy Systems Group driven by focus on conservation

NOTE: Ownership Percentage in ( )

Vectren

Corporation

Vectren Utility

Holdings Inc.

Vectren

Enterprises

Energy Marketing

and Services

Other

Businesses

Energy

Energy

Infrastructure
Services

ProLiance

Energy (61%)

Vectren

Source

Coal Mining

Operations

Synfuels

Miller Pipeline

Other

Haddington

Energy (13%)

Pace Carbon

Synfuels (8%)

Energy

Systems
Group

Vectren North

(Indiana Gas)

Vectren South

(SIGECO) - Gas

Vectren Energy

Delivery of Ohio
(VEDO)

Vectren South

(SIGECO) - Electric

Appendix

Appendix

Coal Mining

Corporate Structure

Overview

Vectren provides reliable delivery service to 141,000

customers in southwestern Indiana.

Markets

6 counties in southwestern Indiana

Top Industrial Customers

AK Steel (Steel)

Berry Plastics (Plastics)

Bristol Myers (Pharmaceuticals/Food)

General Electric (Plastics)

PPG Industries (Automotive)

Toyota (Automotive)

Whirlpool (Metal Products)

Principal Industries

The principal industries include resin and plastic

products, aluminum smelting and recycling, aluminum
sheet products, automotive assembly, steel finishing,
appliance manufacturing, pharmaceutical and
nutritional products, automotive glass, gasoline and
oil products, and coal mining.

Vectren Utility Holdings, Inc. (VUHI) - The Company’s wholly-owned subsidiary serves as the intermediate

holding company for its three operating public utilities: Indiana Gas Company, Inc. (Indiana Gas), Southern Indiana
Gas and Electric Company (SIGECO) and the Ohio operations. VUHI also has other assets that provide information
technology and other services to the three utilities.

Overview

Vectren’s three operating utilities provide reliable

delivery service to 995,000 natural gas customers,
including 565,000 located in central and southern
Indiana, 112,000 located in southwestern Indiana, and
318,000 located in west central Ohio.

Markets

57 counties in central and southern Indiana

17 counties in west central Ohio

Top Industrial Customers

ALCOA (Aluminum)

AE Staley (Grain Processing)

AK Steel (Steel)

Eli Lilly (Pharmaceuticals)

General Electric (Plastics)

General Motors (Automotive)

NUCOR (Steel)

Principal Industries

The principal industries include automotive assembly,

parts and accessories, feed, flour and grain
processing, metal casting, aluminum products,
appliance manufacturing, resin and plastic products,
gypsum products, electrical equipment, metal
specialties, glass, steel finishing, pharmaceutical and
nutritional products, gasoline and oil products, and
coal mining.

Natural Gas

Electric

Appendix

Energy Delivery

Vectren Utility Holdings, Inc. (VUHI) - The Company’s wholly-owned subsidiary serves as the intermediate

Overview

Provides low-cost, reliable electric generation for

delivery to retail and firm wholesale customers in
Southwest Indiana. Optimizes assets by marketing
unutilized capacity to the open market.

Markets

Southwest Indiana – Retail and Wholesale

Midwest – Wholesale

Generating Capacity

5 coal-fired base units – 1,000 MW

–

Brown – 2 units, 490 MW

–

Culley – 2 units, 360 MW

–

Warrick – 1 unit, 150 MW

–

Burn approximately 3 million tons of coal

annually

6 natural gas peaking units – 295 MW

Member of Midwest Independent Transmission

System Operator (MISO)

Has 6 interconnects

Wholesale Power Marketing

Functions within the regulated electric utility

operation

Markets surplus power from generating units

through MISO

Appendix

F.B. Culley

A.B. Brown

Power Supply

Storage Capacity

* Includes 5 Bcf of Liberty Gas Storage

scheduled to be fully operational in early
2007.

Created in 1996 as an unregulated joint venture

between Vectren (61%) and Citizens Gas & Coke
(39%) to provide gas portfolio services to Member
companies.

100+ employees; headquartered in Indianapolis with

market presence in Chicago, Cincinnati, Dayton,
Evansville, Houston, Louisville, and St. Louis.

45 BCF of gas storage either owned or leased

Asset ownership in 3 storage fields (White River, Lee

8 and Liberty).

Owner and developer of two intrastate pipelines (Ohio

Valley Hub & Heartland Gas Pipeline).

Approximate sales volumes of .8 billion cubic feet

(BCF) per day.

Customers in 17 Midwestern and Southeastern

states.

70%+ of volume with third-party customers including

over 1,300 commercial and industrial.

Balanced book approach - VaR capped at $2.5

million

Stand alone $300 million credit facility plus $100

million surge line.

2006 Unconsolidated Revenues (000s): $2,506,000.

Total Investment 3/31/07 (000’s): $161,000.

Pipeline Access

ANR

Columbia Gas

Columbia Gulf

Midwestern Gas

Panhandle Eastern

Southern Natural

Tennessee Gas

Texas Gas

Texas Eastern

Trunkline Gas

Appendix

ProLiance Energy

Appendix

Vectren Source

Founded in 2001 as retail gas marketer in “Choice States”

–

Provides natural gas and related services to

approximately 150,000 residential and small commercial
customers in competitive markets in Indiana, Ohio,
Georgia, and New York.

–

Annual volumes have grown from 1.8 Bcf in 2002 to

12.8 Bcf in 2006.

State-of-the-art customer information and billing system,

forecasting and data warehouse decision support tools.

–

Full-service web capabilities from enrollment to bill

presentment and payment.

–

Forty full-time employees, in-house call center with

seventeen full-time customer service representatives
and seven contract IT staff.

ProLiance Energy serves as agent for commodity

purchases, day-to-day operations, hedging, and
optimization activities.

Emphasis on providing excellent customer service and

maintaining outstanding regulatory relationships.

2006 Revenue (000’s): $163,000.

Total Assets 3/31/07 (000’s): $37,000.

Annual Tons

Prosperity Mine

–

Underground mine – mid-sulfur 3.5

lbs

–

~31 mm tons of reserves at 3/31/07

–

Mines ~3 mm tons per year

Cypress Creek Mine

–

Surface mine – high-sulfur 7.5 lbs

–

~2.5 mm tons of reserves at 3/31/07

–

Mines ~1.4 mm tons per year

Appendix

Coal Mining

Established in 1996 as an effort to control fuel costs

through the elimination of costly long-term coal
contracts with harmful escalations or market
reopeners.

Supplies Vectren’s generating plants with over 3

million tons of coal annually.

Currently invested in two operating mines, Cypress

Creek and Prosperity that produce over 4 million
tons per year with remaining coal reserves estimated
over 33 million tons.

Currently developing two underground coal mines in

Knox County, IN that upon full completion in 2010 will
produce 5 million tons per year. The Oaktown
complex has 80 million tons of estimated coal
reserves.

Staff of 4 in addition to 400 contract mining

employees.

2006 outside customers include the following:

–

Industrial customers: Domtar (Wisconsin) and

Hydraulic Brick (Indiana).

–

Generating stations: PSI Gibson/Wabash River,

Alcoa/Warrick, Crawfordsville, IN and Peru, IN.

2006 Revenues (000s): $159,000.

Total Assets 3/31/07 (000’s): $137,000.

Appendix

Miller Pipeline Corporation started in 1953.

–

Reliant Services, 50/50 JV with Duke Energy,

purchased Miller Pipeline in 2000.

–

Vectren purchased Duke’s ownership in Miller Pipeline

in 2006.

Provides construction, maintenance and

rehabilitation services primarily to gas and water
utilities.

–

Gas construction and utility divisions: 1,300 employees

Gas Pipeline Construction and Repair

–

Expand work in cast iron and bare steel replacement

•

Pipeline Integrity Act

•

Pending Distribution Integrity Act

2006 Revenues (000s): $152,000.

Total Assets 3/31/07 (000’s): $113,000.

Miller Pipeline Corp

Building Performance with Energy

Appendix

Energy Systems Group

Established in 1994

Three primary business lines:

–

Energy performance contracting

•

Designs & installs facility

improvements that pay for
themselves from energy and
operational savings to Hospitals,
Universities, Governments & Schools
(HUGS)

•

Veteran’s Administration

•

5 military base program centers

–

Operations and Maintenance (O&M)

services

•

3 energy centers operated by ESG

–

Developing, constructing, and operating

renewable energy facilities

•

One operating landfill gas plant

174 customers since inception

167 employees in 15 states

Total assets 3/31/07: $39,000

Other Nonutility Businesses

Haddington Energy Partners

–

Overview – The company is a partner in equity method investments that

invest in energy-related ventures. Haddington has two remaining
investments, a compressed air energy project to be used for generating
electricity in Ohio and a liquefied natural gas facility in Texas.

–

Strategy – Continue to harvest energy investments as opportunities arise.

–

Total VVC Investment 3/31/07: $14 million

Vectren Financial Group

–

Overview – Energy Realty and Southern Indiana Properties hold

investments in affordable housing partnerships, leveraged leases, and real
estate notes.

–

Strategy – Hold leveraged leases and affordable housing partnerships.

Exit real estate notes upon refinancing.

–

Total VVC Net Assets 3/31/07: $57 million

Appendix

Produces synfuel from coal which qualifies for tax credits under Section 29 of

the Internal Revenue Code. Vectren owns 8.3% of a partnership (Pace
Carbon) that owns four facilities.

In July 2006, opted out of participation in production of synfuels due to high

oil prices

–

Recorded impairment charge totaling $9.5 million, or $5.7 million after tax

–

Company has generated an Alternative Minimum Tax (AMT) credit carry forward of

approximately $42 million as of December 31, 2006

In October 2006, resumed participation due to decline in oil prices

–

Continue to evaluate 2007 opportunities and monitor oil prices and minimize

exposure/opportunities with hedges until sunset of credits 12/31/07

–

Expect synfuels-related operations to produce net income of $0.11 to $0.13 per

share related to 2007 production

Total Investment 3/31/07 (000s): Investment written off in 2006.

Appendix

Synfuels