DAUGHERTY RESOURCES, INC.

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DAUGHERTY RESOURCES, INC.
(Nasdaq NGAS)

• IPAA
• Oil Gas Investment Symposium
• New York

April 2004
www.ngas.com
2
Company History

• Daugherty Resources, Inc.
• (Nasdaq NGAS)
• Nasdaq Listed Since 1993
• Oil and Gas Producer Since 1984
• Principal gas production is in eastern Kentucky

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What is Daugherty?

• Appalachian Basin Gas Producer
• 390 Oil and Gas Wells
• 31 BCFE of Proven Net Reserves
• 180,000 Acres
• Two Natural Gas Utilities
• 112 Miles of Gas Gathering Pipeline
• Gold Properties in Alaska

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Nasdaq NGAS
Current Trading Range 5.34 - 7.00
Average Volume (Yahoo) 440,000 shares per day
Market Cap 75 Million
Shares Outstanding 12.8 Million
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Balance Sheet
12/31/2003 12/31/2002
Assets 46,068,442 19,711,033
Liabilities 20,012,454 13,424,936
Stockholders Equity 20,055,988 6,286,097



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Revenue
12/31/2003 12/31/2002
Gross Revenue 27,444,433 8,404,643
Net Income 3,813,740 634,950
Net Income Per Share (Basic) 0.47 0.11


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Management

• William S. Daugherty (Since 1984)
• President and CEO
• IPAA 2004 Board of Directors
• Kentucky Governors Representative to the
  Interstate Oil and Gas Compact Commission
• Past President of Kentucky Oil and Gas
  Association
• Past President of Kentucky Independent Petroleum
  Producers Association

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Management (cont.)

• William G. Barr III (Since 1993)
• Vice President Acquisitions Legal Affairs
• Law Degree with 29 Years of Combined Legal and
  Management Experience
• Former President of 120 Employee Independent Oil
  Gas Producer
• Mineral Law Author, Lecturer and Past Adjunct
  Professor at Chase Law School
• Board of Trustees of the Energy Mineral Law
  Foundation
• Board of Directors and Legislative Chairman of
  Kentucky Oil and Gas Association

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Management (cont.)

• D. Michael Wallen (Since 1995)
• Vice President Engineering and Secretary
• Former Director of Kentucky Division of Oil and
  Gas from 1988 to 1995
• 24 Years Experience in Drilling and Production
  Engineering in the Appalachian Basin
• Immediate Past President of Kentucky Oil Gas
  Association
• Past President of Society of Petroleum Engineers,
  East Kentucky Section

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Management (cont.)

• Michael P. Windisch (Since 2002)
• Chief Financial Officer
• PricewaterhouseCoopers LLP Audit Manager
• Member of the American Institute of Certified
  Public Accountants

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Oil and Gas Partnerships

• 24 Partnerships Since 1996
• 205 Wells Drilled
• 100 Success Rate for our Partners
• 25.9 Annual Return Cash and Tax Savings
• 10.2 Average Annual Cash Return
• Partners - High Net Worth Individuals and
  Industry Partners

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Nature of Our Appalachian Gas Wells

• High BTU Gas With Market Premium
• 25 Year Well Life
• Dry Gas
• No Water Produced
• Typical Well Reserve Range 200-500 Mmcf

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What We Look For

• Large Tracts (5,000 Acres)
• Excellent Geology
• Nearby Proven Production
• Close to Pipeline

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Interstate Pipeline System
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Big Sandy Oil and Gas Field

• Southern Appalachian Basin
• Over 10,000 Wells
• Produced 2.5 TCF of Natural Gas
• 250 Mmcf per Well
• Daugherty Controls 180,000 Acres

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Kay Jay Prospect

• 23,000 Acres
• 120 Successful Gas Wells
• Gas Transportation
• CNR
• Somerset/Texas Eastern
• 60 Drilling Locations

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Fonde Prospect

• 18,000 Acres
• 21 Successful Gas Wells
• Fault Thickened Devonian Shale
• Big Lime Stratigraphic Traps
• Gas Transportation
• CNR

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Straight Creek Prospect

• 22,000 Acres
• 80 Locations Currently Available
• Gas Transportation
• Delta Energy
• Duke Energy
• 31 Gas Wells Drilled
• New 8 Pipeline Installed to Duke Energy

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Leatherwood Project

• 107,000 Acres
• Up to 600 well locations
• Gas Transportation
• Kentucky-West Virginia Pipeline
• Somerset / Texas Eastern
• Duke Energy
• 25 Test program drilled

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2003 Accomplishments

• Drilled 89 Gas Wells 100 Success
• Increased Proved Reserves 46
• Increased Profits to 3.8 Million (0.47/share)
• Added 41 Miles of Gas Gathering System
• Reduced Secured Debt to 735,000
• Raised 22.7 Million in Partnership Drilling
  Funds
• Cash Flow from Operations 9.4 Million

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Plans for 2004

• Fund 140 Gas Wells in Appalachia
• Maintain 30 Interest in Each Well
• Sponsor 2 Drilling Programs
• Increase Acreage Position to 200,000 Acres
• Increase Pipeline Holdings
• Increase Reserves through Acquisitions

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Why Own NGAS?

• Low Cost Natural Gas Producer
• Excellent Drilling Prospects
• Small Cap Company in Tremendous Growth Stage
• Excellent Balance Sheet and Financial Ratios
  (i.e., Debt to Equity)
• Increasing Institutional Ownership
• Experienced Management Team
• Niche Player in Appalachian Basin

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Disclaimer

• The above presentation does not constitute an
  offer or solicitation to sell or purchase any
  security and should only be considered in
  conjunction with a prospectus describing in
  detail the risks and merits of any investment in
  any security offered of Daugherty Resources, Inc.
• The above may contain projections and forward
  looking statements or information based upon
  assumptions relative to the oil and gas industry.
  Except for historical and factual information
  all projections and forward looking statements
  are based upon estimates by Daugherty Resources,
  Inc. and are subject to risks and uncertainties
  that may be beyond their control and may cause
  results that significantly differ from the
  forward-looking statements either expressed or
  implied.

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DAUGHERTY RESOURCES, INC.
(Nasdaq NGAS)

• IPAA
• Oil Gas Investment Symposium
• New York

April 2004
www.ngas.com