The global energy industry is large, complex, highly technical and undergoing significant structural changes as a result of evolving economic, environmental and geopolitical conditions. According to Platts, a leading provider of energy information, the largest 250 energy companies generated revenues in excess of $3.5 trillion in 2004, making the energy industry one of the world\\\'s largest industrial activities.

Energy for consumption is generally derived from naturally occurring fossil fuels such as oil, natural gas and coal, wind, water, sunlight, and via the synthesis of nuclear elements. In occupying one or more stages of the energy industry supply chain, primary energy industry participants invest significantly in their own operations and infrastructure, as well as in research and development. These companies are supported by secondary industry participants that provide a variety of related products and services such as construction, transportation, storage, packaging, measurement and testing.

The energy industry represents a growing segment of the overall market in the U.S. and internationally. In recent years, the percentage of the S&P 500 Index market capitalization represented by energy companies has increased significantly. This growth has been driven primarily by the significant increase in commodity prices combined with the expansion in capital investments in the energy sector. The energy industry continues to grow as U.S. energy consumption exceeds domestic levels of production across the energy spectrum.

Over the past two decades, the energy industry has consistently represented a significant share of U.S. capital markets and merger and acquisition, or M&A, transactions. In 2005, U.S. energy industry M&A transactions accounted for approximately $98 billion in transaction value and 254 announced transactions. This compares favorably to the $37 billion in M&A transaction value and 189 announced M&A transactions in the energy industry in 2004. Similarly, capital markets activity within the energy industry has increased in recent years. The energy industry accounted for 87 equity offerings in 2005, representing aggregate proceeds of more than $20 billion. This represented an increase from the 82 equity offerings and more than $13 billion of aggregate proceeds raised by energy companies in 2004.

The Company provides a broad range of strategic and financial advisory services, including merger and acquisition, divestiture and corporate finance advisory services to corporations, partnerships, governments and individual clients, both domestically and abroad. The Company is a leading advisor to the oil and gas industry in all of these segments and is generally involved at each stage of a transaction, from initial structuring to final execution.

The Company’s merger and acquisition services include advising its corporate clients, including boards of directors and special committees, on the sale of public companies, mergers, acquisitions, spin-offs and takeover defenses, providing fairness and adequacy opinions, and assisting clients in evaluating strategic alternatives designed to enhance stockholder value.

In its divestiture advisory business, the Company provides advice and transaction execution services to energy industry clients seeking to sell certain assets or entire private companies. These services include evaluating properties, developing a \\\"roadmap to value,\\\" designing and implementing a customized marketing process, soliciting acquisition proposals, and structuring, negotiating and closing transactions.

The Company’s restructuring advisory business includes advising debtor companies or creditors involved with bankruptcies, recapitalizations, reorganizations and restructurings. The Company provides restructuring services in complex Chapter 11 proceedings and out-of-court situations that include recapitalizations, reorganizations, alternative financings, exchange offers, consent solicitations, divestitures and mergers.

Revenues increased by $27.4 million or 79% to $62.3 million in the first half of 2006 compared to the same period in 2005.

Expenses increased by $27.8 million or 81% to $62.2 million in the first half of 2006 compared to the same period in 2005.