Development Jones Energy continues to concentrate its efforts on the development and implementation of cost-effective exploration methods. Through innovative ideas, such as combining PDC bits with motors, running Packers Plus in horizontal wells and combining the accuracy of 3-D seismic with increased well potentials from horizontal completions, Jones Energy has achieved very high success rates and maintained low finding and development costs. Heritage The Jones family has been a pioneer in oil and gas exploration. In that tradition, Jonny Jones founded Jones Energy in 1988. Jones Energy's early activity was a catalyst for resurrecting exploration in shallow gas reservoirs in the Texas Panhandle, making new discoveries such as the Patten (Krider) field in Hansford County and the Hoover NE (Chase) field in Gray County. Honoring family exploration roots dating back to the 1920's, Jones Energy continues to develop shallow gas fields, while expanding its focus to the development of the Morrow, Atoka and Cleveland formations in the Texas Panhandle. Focus Jones Energy's core area is the Texas Panhandle. Although the exploration team has over 100 years of combined experience throughout the lower 48, the Texas Panhandle is the center of its activity. Primary targets include Atoka, Brown Dolomite, Cleveland and Morrow horizons. The company's 172,000 acre land position provides a significant inventory of prospects and locations for future development. Since its formation, the company has drilled 311 wells with an 80% success rate. The company has averaged over a 70% working interest in all of its wells. The company's assets also include over 100 square miles of proprietary 3-D seismic. In August, Jones Energy teamed with EnerVest Management Partners and closed an asset acquisition which includes 25 sections from D&J; Oil Company in Ellis County, Oklahoma. This acreage provides an additional 80+ locations to its Cleveland Horizontal drilling program. In June 2007, the company sold its Hansford Area production and acreage to Laredo Petroleum Company out of Tulsa, Oklahoma. The sale included 131 producing wells with associated production. Also included in the sale were all the potential PUDs and dedicated acreage of approximately 70,000 gross acres. The sales price was not disclosed. Performance 2006 proved to be an excellent year for the company. It included drilling 66 wells primarily in Lipscomb, Hansford, and Ochiltree counties in Texas. The company’s investment continued to grow with cap-ex increasing to over $70 million and increasing net production to 7.2 bcfe. Currently the company has 4 rigs running and activity peaked this summer with 7 rigs in operation. Current gross production (December) is 63,800 mcfe/d and 27,100 mcfe/d of net production. The company has an active 2007 drilling program planned with a $110 million credit facility in place from BNP Paribas. Business Strategy Drill internally generated prospects Rate of return focus Expand activities in core area Operating Data and Facts 63 operated wells (after sale) 88 producing wells (after sale) 311 drilled wells 172,000 acres under control 2006 activity Increased drilling to 66 wells Increased the success rate on the drilling program to 92% Increased net production by 44% to 7.2 bcfe Increased revenues by 35% to $52.5 million Increased capital spending to $70.2 million Maintained being a low cost driller/operator in Texas Panhandle Decreased average hook-up time from rig release to gas sales to 14 days Leadership One of Jones Energy's goals is to be a leader in advancing the position of natural gas as the fuel of choice for North America. To accomplish this, Jones Energy utilizes state-of-the-art technology to exploit shallow targets in mature gas-prone basins that were previously overlooked, despite the current technology. The company believes that the independent producer is the key to energy security for the country. Partnership Jones Energy believes we can add substantial value to the largest oil and gas companies by being an "outsource exploration arm" in mature areas which are not their primary focus. We have successfully worked with ExxonMobil, BP, and ConocoPhillips to add revenues and reserves in the Texas Panhandle. We have an excellent track record of successfully living up to our commitments, maintaining low drilling costs, staying under budget, and drilling wells with a very high success rate. We passed a significant milestone in 2006 by drilling our 100th well with ExxonMobil. One of the company's key focus areas is safety. The company has a long history of safe operations. Jones believes that safe drilling and an environmental focus is critical to the success of the company. © 2004-2007 Jones Energy Ltd