energy quarterly dialogue...

QUARTERLY D I ALOGUE

Distressed Real Estate

TH I RD QUARTER 2 0 1 0 EnergyQUARTERLY D I ALOGUE | S E COND QUARTER 2 0 1 3

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INVESTMENT BANKING • RESTRUCTURING • VALUATION & F INANCIAL RISK MANAGEMENT

Realizing Value … Delivering Results

www.ncacf.com | 847.583.1618 | Atlanta • Chicago • New York

Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC. Member FINRA/SIPC.

August 2013

To The Friends and Clients of Navigant Capital Advisors (“NCA”):

We are pleased to share with you Navigant Capital Advisors’ Energy Quarterly

Dialogue for the second quarter 2013, which provides coverage and analysis of

key news, valuation, M&A, and capital markets activity in the NCA Energy

universe: (i) Energy Assets and Services, (ii) Oil and Gas Refining and

Marketing, (iii) Oil and Gas Transportation and Storage, and (iv) Independent

Power Producers (IPPs)/Merchant Generators.

The energy sector continues to be impacted by the expansion of new drilling

technologies, resulting in discovery of new energy sources, declining commodity

prices, and regulatory uncertainty. The shift of the U.S. becoming energy self-

sufficient is underway, as U.S. gas production continues to increase due to the

discovery of new shale gas reserves and improved drilling technologies. The

following pages offer insight into the current trends in natural gas in the

“Industry Perspectives” section. Expanding upon an emerging theme presented

in our last Quarterly Dialogue, natural gas continues to be at the forefront of the

changing energy market, particularly liquefied natural gas (“LNG”).

Overall, the industry experienced a slight uptick in the second quarter as M&A

transaction volume increased; however, leveraged loan volumes remained

stagnant and loan default rates remain stable at their lowest levels since the first

quarter 2009.

We welcome your comments and hope that you find our Quarterly Dialogue

informative.

Edward R. Casas Laurie Oppel Kim J. Brady

Senior Managing Director Managing Director Managing Director

Head of NCA Energy Practice Navigant Capital Advisors

[email protected] [email protected] [email protected]

847.583.1619 202.481.7534 847.583.1718

Navigant Capital Advisors is the dedicated corporate finance business unit of Navigant (NYSE: NCI). Navigant is a specialized, global expert services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities. Through senior level engagement with clients, Navigant professionals combine technical expertise in Disputes, Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism in highly regulated industries.

Contents

Market Overview 2

Industry Perspectives 5

Notable Industry Developments 10

Selected M&A Transactions 14

Valuation & Performance Metrics 16

EnergyQUARTERLY DIALOGUE | SECOND QUARTER 2013




Energy: Market Overview

Fig. A – Global M&A Transactions ($ in billions) Fig. B – Monthly Net Power Generation by Source

Fig. C – NCA Energy Indices Annual Returns (2012) Fig. D – NCA Energy Indices Quarterly Returns

Fig. E – New Issue Oil & Gas Loan Volume ($ in billions) Fig. F – Cumulative Institutional Loan Default Rates

* Please see following page for NCA Energy Universe and additional information in the “Notes” section at the end of this report of 24




Energy: Market Overview (cont.)

NCA Energy Universe

NCA Energy Assets & Services NCA Energy Oil & Transportation & Storage

BHI Baker Hughes Incorporated ATLS Atlas Energy, L.P

BAS Basic Energy Services, Inc. BKEP Blueknight Energy Partners, L.P.

DVR Cal Dive International Inc BPL Buckeye Partners, L.P.

CAM Cameron International Corporation LNG Cheniere Energy, Inc.

CRR CARBO Ceramics Inc. CPNO Copano Energy LLC

DWSN Dawson Geophysical Company XTXI Crosstex Energy Inc.

DRC Dresser-Rand Group Inc. DPM DCP Midstream Partners LP

DRQ Dril-Quip, Inc. EPB El Paso Pipeline Partners, L.P.

EXH Exterran Holdings, Inc. EEP Enbridge Energy Partners LP

FTI FMC Technologies, Inc. ETE Energy Transfer Equity, L.P.

GEOK.Q (Invalid Identifier) EPD Enterprise Products Partners L.P.

GIFI Gulf Island Fabrication Inc. GEL Genesis Energy LP

GLF Gulfmark Offshore, Inc. GLP Global Partners LP

HAL Halliburton Company NRGY Inergy, L.P., Prior to Reverse Merger

HLX Helix Energy Solutions Group, Inc. KMP Kinder Morgan Energy Partners, L.P.

HOS Hornbeck Offshore Services, Inc. MMP Magellan Midstream Partners LP

IO ION Geophysical Corporation MWE MarkWest Energy Partners, L.P.

KEG Key Energy Services Inc. MMLP Martin Midstream Partners LP

MTRX Matrix Service Company NS NuStar Energy L.P.

NBR Nabors Industries Ltd. OKS ONEOK Partners, L.P.

NOV National Oilwell Varco, Inc. PAA Plains All American Pipeline, L.P.

NGS Natural Gas Services Group Inc. RGP Regency Energy Partners LP

NR Newpark Resources Inc. SE Spectra Energy Corp.

NOF Northern Offshore Ltd SXL Sunoco Logistics Partners L.P.

OIS Oil States International Inc. TCP TC PipeLines, LP

RES RPC Inc. TLP Transmontaigne Partners L.P.

SLB Schlumberger Limited WMB Williams Companies, Inc.

SPN Superior Energy Services, Inc. WPZ Williams Partners L.P.

TESO Tesco Corporation

TTI TETRA Technologies, Inc. NCA Oil & Gas Marketing & Refining

WG Willbros Group Inc. CLMT Calumet Specialty Products Partners LP

CVI CVR Energy, Inc.

NCA IPP & Merchant Generators HFC HollyFrontier Corporation

ATP Atlantic Power Corporation NS NuStar Energy L.P.

CPN Calpine Corp. TSO Tesoro Corporation

DYN Dynegy Inc. VLO Valero Energy Corporation

NRG NRG Energy, Inc. WNR Western Refining, Inc.

AES The AES Corporation INT World Fuel Services Corp.

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Energy: Market Overview (cont.)

� As presented in Fig. A, global energy M&A picked up slightly in the second quarter of 2013, as

activity increased during the quarter with 415 transactions reported, a 6.7% decrease over the

average of 445 transactions reported for each of the prior three quarters, and down 17.0% from

the second quarter of 2012.

� Unlike M&A deal volume, from an aggregate dollar value perspective, global M&A decreased

nearly 55%, from an average aggregate value of $88.6 billion for the last three quarters, to $39.8

billion, but is down only 14.1% when compared to the same prior year quarter (Fig. A).

� Recently published data by EIA (refer to Fig. B) indicates that, while the net production of

electricity is down 2.7% from the end of the prior quarter to 325.7 million MWH, the portion of

electricity generated from coal fired plants continues to remain dominant. In March 2013, nearly

40% of all electricity generated came from coal fired plants, on par with the end of the prior

quarter. Though natural gas fired plants’ share of generated electricity decreased 4% from the

same quarter prior year, it still accounts for over 26% of total power generation.

� The S&P 500 Energy Sector Index decreased 0.9% over the first quarter as compared to a 2.4%

gain in the broader S&P 500, as shown in Fig. C and D. Losses in the NCA Energy index were

experienced across all sectors, with Oil & Gas Refining and Marketing posting the most

significant losses, down 16.9% over the quarter.

� NCA’s Energy Assets and Services, IPP/Merchant Generators, and Oil and Gas Transportation

and Storage subsectors declined at a rate of 1.4%, 1.7%, and 0.1%, respectively.

� The Oil & Gas sector saw a significant boom in institutional loan volumes, with a 219% increase

from the prior quarter to $15.6 billion, as shown in Fig. E.

� Typical of historical cycles, Fig. F shows a continued downtrend in the number of defaults in the

Oil & Gas and Utilities sectors. This may reflect diminished credit quality over time, portending

a rise in future default rates as the current environment of loose monetary policy results in

inflationary pressures, ultimately impacting lower credit quality borrowers.

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Lessons from the Natural Gas Market

Why a Market Solution to the LNG Export Question Makes Sense

Background

The issue of liquefied natural gas (LNG) exports seems to be front and center of many news programs, policy journals, newspapers, and magazines. Everyone seems to have an opinion about how much natural gas should be exported, or more accu-rately, whether or not the U.S. should even consider exporting natural gas. Opinions range from having the government closely monitor market conditions and attempt to virtually prescribe the trajectory of liquefaction facility development, to allowing the market to determine the ultimate allocation and use of capital resources. The reason there is a controversy at all is the “shale revolution” that fundamentally revised the outlook for the U.S. gas market from one of expected imminent declines in gas pro-duction to one of abundant supply possibly into the next century.1

As U.S. natural gas production has increased to record highs2 (as shown in Figure 1), the market has adjusted to account for the change. Not surprisingly, plans for the de-velopment of LNG import facilities have been abandoned3, while plans for the development of LNG export facili-ties have taken off. In fact, the proposed projects of some LNG export de-velopers are actu-ally located at sites where proposed im-port facility projects have been aban-doned4. As outlined

A publication by Navigant’s Energy Practice » June 2013

Contents1 Lessons from the

Natural Gas Market – Why a Market Solution to the LNG Export Question Makes Sense

6 Natural Gas Market Charts

9 Legislative and Regulatory Highlights

12 About Navigant

1. The “shale revolution” has been caused by technical advances in the combined use of horizontal drilling and hydraulic fracturing that have made

FIGURE 1: U.S. DRY GAS PRODUCTION

14,000

16,000

18,000

20,000

22,000

24,000

26,000

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

Bcf

21.7 Tcf

24.0 Tcf

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2

June 2013

in various Navigant studies5, these export projects will be an important element in providing stable, incremental demand to help sustain the development of shale gas re-sources and foster the long-term stability of the U.S. natu-ral gas market. In any event, there are currently applica-tions before the Department of Energy (DOE) seeking LNG export authorization for 17 major projects represent-ing approximately 26 bcfd in LNG exports. The recent ap-proval by the DOE of its second shale-era LNG export li-cense, Order No. 32826, which conditionally grants export authority to Freeport LNG (Freeport Order), provides a good opportunity to review the LNG export question.

Analytical Framework for DOE Export Approvals

As the DOE summarized in the Freeport Order, the cri-teria for export approval set forth in Section 3(a) of the Natural Gas Act create a rebuttable presumption that a proposed export of natural gas is in the public interest and DOE/Fossil Energy (FE) must grant such an appli-cation unless the opponents of the application overcome that presumption by making an affirmative showing of inconsistency with the public interest. In reviewing ex-port applications, the Freeport Order list-ed the following areas of focus by DOE/FE: 1) the domestic need for the natural gas to be exported, 2) whether the pro-posed exports pose a threat to the secu-rity of the domestic natural gas supplies, 3) whether the arrangement is consis-tent with DOE/FE’s policy of promoting market competition7, and 4) any other factors bearing on the public interest as described in the Freeport Order.8

In the only other recent DOE order au-thorizing LNG exports, Order No. 2961 regarding Sabine Pass LNG9 (Sabine Pass Order), DOE stated in its approval that the application contained substantial

evidence of sufficient future supplies of domestic natu-ral gas, as well as modest price increases10 that DOE did not find to be due to “an alleged convergence of domes-tic natural gas prices with prices in certain international markets where the price of natural gas is linked to the price of oil”11. However, as the DOE noted in the Freeport Order, because of the number of LNG export applications that had been filed after the Sabine Pass approval, further study of the economic impacts of LNG exports was war-ranted to better inform its public interest review.12 A map showing the locations of projects is shown in Figure 2. Thus, in late 2011, the DOE commissioned a two-part LNG Export Study to examine 1) potential effects on domes-tic energy markets of LNG exports (the EIA Study), and 2) potential macroeconomic impacts on the U.S. economy (the NERA Study).

The Freeport Order focused extensively on analysis of the LNG Export Study, ultimately finding that “the best available evidence supports the conclusion that [Freeport LNG’s] proposed exports will benefit the U.S. economy overall and are consistent with the public interest.”13

FIGURE 2: MAP OF MAJOR LNG EXPORT PROJECTS, APPROVED (#1-5) AND PENDING (#6-20)14

11.

13

123

46 5 7

8

9

11

12

14

1013 15 16 17

1819 20

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June 2013

DOE Analysis of Freeport LNG

While the DOE/FE found that Freeport LNG had intro-duced substantial evidence of the sufficiency of domestic natural gas supplies, as well as evidence of a modest price increase and significant local and regional economic bene-fits15, much of Order No. 3282 focused on the LNG Export Study and the various comments filed both supporting and challenging the study. Two main areas of contention centered on 1) sufficiency of supply, especially in relation to natural gas price levels, and 2) distributional aspects of capturing the benefits of natural gas abundance. In both instances, the DOE/FE favored the power of free markets to optimize production and allocation decisions.

With respect to the sufficiency of supply, two areas of concern emerged. First, opponents criticized the use of the EIA’s Annual Energy Outlook (AEO) 2011 data, based on the claim that more recent data would show large increases in natural gas demand that would have led to much higher estimated price impacts of LNG exports.16 The DOE/FE, however, dispensed with these claims by quoting a Navigant analysis, stating that Navigant “cor-rectly notes the increasing gas production projections in later EIA Analyses:

For the period of 2013-2035, there was an average percentage increase in forecast total domestic natural gas consumption between AEO 2011 and AEO 2013 of 5.6 percent, while the increase in forecast total natural gas production was 16 percent. This important context helps explain why the more recent AEO 2013 assumptions actually indicate the beneficial market impacts that come along with LNG exports.”17

The fact that gas production increased dramatically in AEO 2013 (which actually included LNG exports) is consistent with the DOE/FE’s statement that “in light of our findings regarding domestic natural gas reserves explained above, we see no reason why LNG exports would interfere with the market’s supply response to in-creased prices,” which the DOE/FE explains is part of the normal business cycle.18

Second, in rejecting arguments that LNG exports will exacerbate projected price increases, the DOE/FE ac-knowledged the point made in the NERA Study — that in many circumstances, the a priori export levels assumed in the EIA Study that generated some significant project-ed price increases were not even economically feasible in the global market19. Thus, the EIA Study did not (and could not) reflect the reality, as noted in the Freeport Or-der, that LNG exports from the U.S. will be constrained by competitive conditions in the global marketplace.20 We believe this to be a key finding by the DOE that clearly recognizes some of the global developments in the LNG area. For example, roughly 40 percent of new liquefaction capacity needed to meet global LNG demand projections in 2030 is already under construction in Australia alone, as can be seen from reviewing BP’s market projections.21

With respect to the distributional question, some oppos-ing commenters claimed, in essence, that domestic use of natural gas in manufacturing would be more produc-tive or valuable than exporting it.22 The DOE/FE noted, however, that such competition was captured by NERA’s modeling in that no exports occurred in the majority of scenarios, indicating that the gas was of greater value to domestic rather than foreign uses, but where exports were projected to occur, the model “found that greater economic value was being placed on the LNG by for-eign markets and, at the same time, greater economic benefits, both in terms of welfare and GDP accrued to the U.S. economy due to those exports.”23 The Freeport Order goes on to reiterate the “long-standing principle established in our Policy Guidelines that resource alloca-tion decisions of this nature are better left to the market, rather than the Department, to resolve.”24

A second distributional issue raised by opposing com-menters concerned whether or not NERA’s modeling of energy-intensive trade-exposed industries was suffi-ciently disaggregated to fully capture industry-specific impacts. The DOE/FE noted that while it takes these concerns seriously, it is “ultimately guided by the prin-ciple that the public interest requires us to look to the

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June 2013

impacts to the U.S. economy as a whole, without privileging the com-mercial interests of any industry over another”.25 Thus, not only is resource allocation best left to the market, but so is the distribution of impacts re-sulting from actions approved due to their net overall benefits for the U.S. economy.26 Navigant’s natural gas ex-perts believe that the DOE preference to rely on market forces is a key take-away from the Freeport Order for other projects with pending applica-tions and others that might follow.

Order and Outlook

The DOE/FE found that the LNG Export Study provided substantial additional support (beyond Freeport LNG’s application and studies) for conditionally granting the applica-tion. The DOE/FE cited Navigant’s analyses of the LNG Export Study in noting that the LNG Export Study is fundamentally sound27, and supports the proposition that the proposed au-thorization would not be inconsistent with the public interest. The condi-tions attached by DOE/FE to the authorization include the following: 1) satisfactory completion of the envi-ronmental review of the project under NEPA by FERC; 2) filing of all exe-cuted long-term contracts associated with the long-term export of LNG or supply of natural gas, whether on its own behalf, or as agent or on behalf of others; 3) registration by Freeport

LNG of all parties for which it acts on behalf of or as agent of others; 4) fil-ing of semi-annual progress reports on the development of the project; 5) filing of monthly statements of LNG export quantities; 6) commence-ment of operations within seven years of the Order; 7) prior approval by the Assistant Secretary for Fossil Energy for any change in control of the license holder. Additional terms provide for a 20-year term to start no later than five years from the Order, with an annual authorized volume of 511 Bcf. These terms and conditions, are consistent with (i.e., no more onerous than) those attached to the authorization for Sabine Pass granted in 2011.

With respect to the outlook for fu-ture authorizations for the long-term export of LNG, several points can be made. First, subsequent to the comment period for the LNG Export Study, the Potential Gas Committee (PGC) released its bi-annual update of its estimate of the U.S. technical-ly recoverable natural gas resource. The 2013 update reflects a significant increase in the total estimated U.S. natural gas resource from 2,203 Tcf to 2,689 Tcf, which should only strength-en the findings on the sufficiency of U.S. gas supplies.28 A history of the PGC’s potential resource estimates is shown in Figure 3.29

FIGURE 3: POTENTIAL GAS COMMITTEE NATURAL GAS RESOURCE ESTIMATE

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Second, while any specific conclu-sions about the timing of future export authorizations by the DOE would only be speculative, certain facts seem to indicate that the DOE is at least positioning itself to move forward with reviewing the applica-tions. For example, there is an “order of precedence” established for the processing of the export applications, with applicants that received FERC approval to use its pre-filing process on or before December 5, 2012 being handled in the order their DOE ap-plications were received, followed by applicants without such pre-filing process approval, in chronological DOE order. Further, in his inaugural press conference, Secretary of Energy

Ernest Moniz stated that he “has no plans of commissioning new studies, but everything’s on the table” until he completes his analysis, (i.e., reviews the existing LNG export studies).30

Finally, the continued preference for market solutions to resource alloca-tion decisions shown in the Freeport Order seems to bode well for further authorizations of LNG exports, given that the strength of U.S. natural gas supplies and the natural constraints provided by global competition in LNG markets should allow U.S. LNG exports to create benefits for the U.S. economy without disrupting the stability of the domestic natural gas market or the security of supply. In

fact, for some time Navigant’s natu-ral gas experts have been highlight-ing the benefits of LNG exports, and believe that they will foster contin-ued natural gas supply development despite the existing oversupplied gas market, helping to create long-term supply security, with less price vola-tility, for the North American natural gas market.

— Gordon Pickering and Jeff Van Horne

The opinions expressed in this article are those of the authors and do not necessarily represent the views of Navigant Consulting, Inc.

About the Author »

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Energy: Notable Industry Developments

Date Industry Development

6/26/13 Crosstex Energy, L.P. and Crosstex Energy Inc. announced that the Partnership has completed the Phase II

expansion of its Riverside facility located on the Mississippi River in southern Louisiana. The Riverside facility's

capacity to transload crude oil from railcars to the Partnership's barge facility has increased to approximately

15,000 barrels of crude oil per day. Phase II additions to the Riverside facility include a 100,000 barrel-per day

above-ground crude oil storage tank, a rail spur with a 26-spot crude railcar unloading rack, and a crude

offloading facility with pumps and metering, as well as a truck unloading bay.

6/25/13 Williams Companies, Inc. board of directors has voted to approve the company's Bluegrass Pipeline project. The

company is engaged in development work on the proposed natural-gas-liquids pipeline, which has a targeted in-

service date of late 2015. The Bluegrass Pipeline will connect supply from the Marcellus and Utica shale-gas areas

in the U.S. Northeast to growing petrochemical and export markets in the U.S. Gulf Coast. The pipeline also will

connect NGL supply with the developing petrochemical market in the U.S. Northeast.

6/25/13 FMC Technologies, Inc. announced that it has received an order from Total Upstream Nigeria Ltd. for subsea

equipment for the Egina field. The award has an estimated value of $1.2 billion. The Egina field is located in Block

OML 130 offshore Nigeria. FMC Technologies' scope of supply includes subsea trees and wellheads, manifolds,

installation tooling, flowline connection systems, and associated control systems. The equipment is scheduled for

delivery commencing in 2015.

6/24/13 Cameron and Schlumberger announced that OneSubsea, a joint venture to manufacture and develop products,

systems and services for the subsea oil and gas market, has received all required regulatory approvals. The parties

will close the transaction making OneSubsea operational on June 30, 2013. Cameron and Schlumberger have 60/40

ownership of the joint venture, respectively. Cameron, with its long history of innovation and firsts in the subsea

market, is a leader in design capability, manufacturing excellence and successful installations. Schlumberger

brings a deep understanding of the reservoir, and well completions, subsea processing and an integration

platform. Through the integration of these strengths, OneSubsea will offer best-in-class subsea solutions for its

customers.

6/24/13 NRG Energy, Inc. is offering to exchange up to $990 million of its new 6.625% senior notes due 2023 for a like

amount of its outstanding 6.625% senior notes due 2023, subject to certain customary conditions. The terms of the

exchange notes to be issued in the exchange offer are substantially identical to the old 6.625% notes, except that the

transfer restrictions and registration rights relating to the old notes will not apply to the exchange notes, according

to a prospectus filed June 20.

6/21/13 A purported shareholder of Lufkin Industries Inc. filed a lawsuit in the District Court of Angelina County, Texas

challenging the previously disclosed Agreement and Plan of Merger, dated as of April 5, 2013, among General

Electric company (GE), Red Acquisition, Inc. (Merger Sub) and the company. The Action sought to enjoin the

merger and alleged, among other things, that the members of the company's board of directors breached their

fiduciary duties by agreeing to sell the company for insufficient consideration, reaching that decision through an

inadequate process and filing a proxy containing insufficient disclosures and that GE and Merger Sub aided and

abetted the Board in breaching its fiduciary duties. In response to the Plaintiff's petition, the company, GE, Merger

Sub, and the company's directors not serving on the Special Committee jointly filed pleadings opposing injunctive

relief and seeking dismissal of the Action on jurisdictional grounds. On June 20, 2013, the Court denied the

Plaintiff's request for injunctive relief and granted the motions to dismiss the Action. The Special Committee will

continue to investigate, review and evaluate the allegations.

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6/19/13 Helix Energy Solutions Group, Inc. announced that it has entered into a credit agreement with a syndicated bank

lending group in the amount of $900 million, consisting of a $600 million revolving credit facility and a $300

million term loan. The term loan will be funded in conjunction with the early redemption of the company's

remaining $275 million Senior Unsecured Notes. The key features of the new secured credit facility include: initial

pricing at Libor plus 275 basis points, with an undrawn fee of 50 basis points; annual amortization payments on

the term loan of 5% in years 1 and 2, and 10% per annum in years 3 through 5 with a balloon payment at maturity;

and, $200 million accordion feature and 5 year term. The company will pay a call premium of $6.5 million for

early redemption of its $275 million 9.5% Senior Unsecured Notes and will incur a noncash charge of $8.7 million

to expense the deferred charges associated with the existing credit facility and Senior Unsecured Notes.

6/17/13 Spectra Energy Corp. (NYSE:SE) may evaluate strategic alternatives. In a letter to Spectra Chief Executive Greg

Ebel, Sandell Chief Executive Officer, Thomas Sandell said it has formed a group of shareholders, making it one of

Spectra Energy's largest holders. The activist investor urged Spectra Energy to review strategic options for its

Canadian operations, including a possible initial public offering, as well as its stake in DCP Midstream Partners LP

(NYSE:DPM), including a possible dropdown or sale.

6/14/13 Western Refining, Inc. has announced a Fixed-Income Offering in the amount of $350.0 million with a 6.25%

coupon rate maturing April 1, 2021.

6/14/13 Williams Cos. and WPX Energy Inc., are being sued by six Fayette County families who filed a civil lawsuit in

Allegheny County claiming nearby natural gas wells are a nuisance that have diminished their ability to use their

property. The families, who reside in Springhill and Nicholson townships, claim in the 63-page lawsuit that

Chevron Corp., Williams Cos. and WPX Energy Inc., which own, operate and maintain several gas wells in the

area, "adversely impacted" their "quality of life and enjoyment of property." They are seeking unspecified damages

for the effects of toxic chemicals, noise, odor and damage to their properties from a dozen gas wells and a

compressor station near their property.

6/11/13 Halliburton Company announced the opening of its new Technology Center at the Federal University of Rio de

Janeiro (UFRJ) Technology Park, located at Ilha do Fundão, Rio de Janeiro, Brazil. The center provides the setting

for collaboration as the company works with the country's universities and customer research groups to establish a

global center of expertise for deepwater and mature fields. The 7,062-square-meter technology center is located on

three floors and includes specialized laboratories, a collaboration room, a testing area, and conference and training

rooms.

6/10/13 NRG Energy, Inc. completed a refinancing, on June 4, 2013 of its senior secured credit facility comprised of a

senior secured term loan facility in an aggregate principal amount of $2.022 billion and a senior secured revolving

credit facility in an aggregate principal amount not to exceed $2.511 billion. The principal amount of the term

facility amortizes in quarterly installments equal to 0.25% of the original principal amount of the term facility, with

the balance payable at maturity. Borrowings under the term facility shall bear variable rates of interest, as

determined at company’s election, at LIBOR or at base rate, in each case, plus an applicable margin equal to

(a) 2.00% per annum for LIBOR loans and (b) 1.00% per annum for base rate loans. The Lenders under the

revolving facility will be paid a per annum commitment fee of 0.50% on the average daily amount of the unused

portion of the revolving commitments. In an event of default, the amended credit agreement requires the company

to pay incremental interest at the rate of 2.0%.

6/10/13 Williams Partners L.P. announced a major expansion of its Transco natural gas pipeline which was completed

and brought into service, providing an additional 225,000 dekatherms of incremental firm natural gas

transportation capacity to growing markets in the Southeast United States. The Mid-South Expansion project

provides service to power generators in North Carolina and Alabama, as well as a local distribution company in

Georgia. The Mid-South Expansion project consists of approximately 23 miles of new pipeline, a new compressor

facility in Dallas County, Alabama, and upgrades to existing compressor facilities in Alabama, Georgia, South

Carolina and North Carolina.

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6/9/13 Atlas Resource Partners, L.P. (NYSE:ARP) announced a private placement of 5,411,255 class C convertible

preferred units at a price of $23.10 per unit for gross proceeds of $125,000,000. The transaction will include

participation from existing investor, Atlas Energy, L.P. The class C preferred units will be convertible into the

company’s common stock at a conversion price of $23.10 per share. The class C preferred units will pay cash

distributions in an amount of $0.51 for the quarter ending September 30, 2013. The company will issue 811,688

warrants to purchase common units of the company at an exercise price equal to 15% of the number of class C

preferred units in the transaction. The warrants will be exercisable after 90 days from the date of issuance.

6/4/13 The Communications, Energy and Paperworkers Union and Suncor Energy Inc. have ratified an agreement that

will see wages for workers in the oil, natural gas and petrochemical sectors rise 10.5% over three years. Delegates

from 48 bargaining units that take part in the union's National and Energy and Chemical Bargaining Program

ratified the tentative agreement. The 2013-2016 deal will see wage increases of 3.25%, 3.5% and 3.75%.

6/3/13 Buckeye Partners, L.P. has completed a non-convertible Fixed-Income Offering in the amount of $499.05 million

with a 4.150% coupon rate maturing June 1, 2023.

6/1/13 More than 200 Washington County families had their first day in court on June 4 in a lawsuit against the owner

and operator of a fuel pipeline that spilled gasoline in July 2012 in a Town of Jackson farm field. Gasoline has

contaminated groundwater in roughly a one-square-mile area of the town, tainting 37 private wells with benzene

and other chemicals and forcing rural residents to consider other options for their permanent drinking water

supply. Plaintiffs are seeking compensation for the following: costs of a new safe water supply; reduced property

values; lost profits and interference with family-run businesses; loss of use and loss of enjoyment of properties;

reduced quality of life; and emotional distress. The lawsuit also asks the court to order the companies to pay for

restoring their properties and groundwater and to award punitive damages against the companies for failing to

prevent the spill and to act as a deterrent against similar conduct in the future.

5/30/13 AES Corp. announced that it purchased a total of about $927.6 million of securities in connection with its tender

offers to purchase for cash its outstanding 2014 notes, 2015 notes, 2016 notes and 2017 notes.

5/29/13 Plains All American Pipeline, L.P. (NYSE:PAA) is seeking acquisitions. PAA has filed an offering in the amount

of $750 million. PAA intends to use net proceeds from the offering for general partnership purposes, which may

include, among other things, repayment of indebtedness, acquisitions, capital expenditures and additions to

working capital.

5/21/13 The AES Corporation announced the introduction of a technology-aware control platform for the commercial

operation of energy storage. This patented operating system, called sOS(TM), is a fast-response architecture that

applies patented performance algorithms to automate the operation of AES-delivered battery-based energy

storage arrays, optimizing performance and efficiency for customers, and extending the life of the battery. To date,

AES has developed and is offering customized modules for the PJM, NYISO, ERCOT and Puerto Rico markets.

AES is developing additional modules for key markets in the U.S. and around the world. The sOS(TM) platform

enables the system to automatically make trade-off decisions during operation, matching the system performance

specifically to the market need at that time. This function reduces ramping, improves efficiency, and enables

battery longevity and increased performance while also allowing AES to right-size projects, ensuring that facilities

are built to match the needs of the customer.

5/20/13 Dynegy Inc. closed its Rule 144A private placement of $500 million in aggregate principal amount of 5.875%

Senior Notes due 2023. Dynegy used the proceeds of the offering to repay its recently issued $500 million, seven-

year Term Loan B.

5/20/13 Genesis Energy LP has announced a Fixed-Income Offering in the amount of $350.00 million with a 5.75% coupon

rate maturing February 15, 2021.

of 24





5/20/13 Plains All American Pipeline, L.P. announced the construction of a 95-mile extension of its existing Oklahoma

crude oil pipeline system to service increasing production from the Granite Wash, Hogshooter and Cleveland

Sands producing areas in western Oklahoma and the Texas panhandle. The new Western Oklahoma pipeline will

provide up to 75,000 barrels per day of new takeaway capacity. The pipeline is supported by long-term producer

commitments and is expected to be in service by the end of the first quarter of 2014.

5/20/13 Starwood Hotels & Resorts Worldwide Inc. and NRG Energy, Inc. announced a new global alliance to expand

the use of renewable energy systems at Starwood properties. The alliance will begin with three properties,

including the installation of a 1.3 megawatt (MW) solar array at the Westin St. John in the U.S. Virgin Islands

where NRG will build, own and operate the project.

5/15/13 NRG Energy, Inc. announced that it has agreed with the States of New Jersey and Connecticut to settle a lawsuit

concerning the operation of two coal-fueled electric generating units at the company's Portland Generating Station

in Mt. Bethel, Pennsylvania. The settlement, via a federal Consent Decree, allows the parties to avoid further

litigation of a lawsuit that began in 2007.

5/14/13 The AES Corporation has completed a Fixed-Income Offering in the amount of $253.13 million with a 4.875%

coupon rate maturing May 15, 2023.

5/8/13 ION Geophysical Corporation has completed a non-convertible fixed-income offering in the amount of $175.00

million with an 8.125% coupon maturing May 15, 2018.

of 24




Energy: Selected M&A Transactions

Announced

Date Target Buyer

Enterprise

Value

($USD in millions)

Enterprise

Value /

Revenue

Enterprise

Value /

EBITDA

06/27/2013 Enbridge Energy Limited Partnership

Enbridge Energy Company, Inc. $681.5 - -

Enbridge Energy Company, Inc. (EEC) agreed to acquire 15% stake in Enbridge Energy Limited Partnership from Enbridge Energy Partners, LP (NYSE:EEP) (EEP) for approximately $100 million. EEP shall pay $90.2 million for Series EA Limited Partner Interests and $12 million for Series ME Limited Partner Interests.

06/20/2013 TerraVest Capital Inc. (TSX:TVK)

Geosime Capital Inc. $68.6 0.99x 4.93x

Geosime Capital Inc. acquired 15.89% stake in TerraVest Capital Inc. (TSX:TVK) for CAD 7.9 million in cash. As per the deal, Geosime Capital acquired 1.98 million shares at CAD 4 per share.

06/05/2013 Canadian Solar Solutions Inc. - Four Utility-Scale Solar Power Plants

BluEarth Renewables Inc. $225.0 - -

BluEarth Renewables Inc. entered into a sales agreement to acquire four utility-scale solar power plants totaling 38.5MWac from Canadian Solar Solutions Inc. for approximately CAD 230 million. The projects are in Kawartha Lakes, Belleville, Beaverton and Napanee, Ontario, Canada.

06/05/2013 MarkWest Liberty Midstream & Resources, LLC, Certain Assets

Summit Midstream Partners, LP (NYSE:SMLP)

$210.0 - -

Summit Midstream Partners, LP (NYSE:SMLP) entered into an agreement to acquire certain assets from MarkWest Liberty Midstream & Resources, LLC for $210 million. Summit Midstream Partners expects to fund the transaction with borrowings of $110 million under the revolving credit facility and $98 million in proceeds from 3.1 million common units that will be sold to Summit Midstream Partners Holdings, LLC and $2 million in proceeds from another sale.

06/05/2013 Bison Midstream, LLC Summit Midstream Partners, LP (NYSE:SMLP)

$248.1 6.60x -

Summit Midstream Partners, LP (NYSE:SMLP) acquired Bison Midstream, LLC, a natural gas pipeline owner and operator, from Summit Midstream Partners Holdings, LLC for approximately $250 million.

06/03/2013 Pipeline Management Inc.

Inter Pipeline Fund (TSX:IPL.UN) $340.0 - -

Inter Pipeline Fund (TSX:IPL.UN) entered into a share purchase agreement to acquire Pipeline Management Inc. from certain individual investors and Petro Assets Inc. for approximately CAD 340 million in preferred stock (7.4 million Class A preferred shares and 7.1 million Class B preferred shares).

05/22/2013 IronGate Energy Services, LLC (formerly North American Rental and Tubular Services)

Clearlake Capital Group, LLC $244.0 2.44x 5.42x

Clearlake Capital Group, LLC agreed to acquire North American Rental and Tubular Services division from Archer Limited (OB:ARCHER) for approximately $240 million in cash. North American Rental and Tubular Services generated $100 million in revenue, $45 million in earnings before income taxes, depreciation and amortization and $244 million in net assets for the year 2012.

05/15/2013 45% of Gas Transmission Northwest LLC and 45% of Bison Pipeline LLC

TC PipeLines, LP (NYSE:TCP) $1,050.0 - -

TC PipeLines, LP (NYSE:TCP) entered into an agreement to acquire 45% of Gas Transmission Northwest LLC (GTN) and 45% of Bison Pipeline LLC from TransCanada Corp. (TSX:TRP) for $1.1 billion. The deal value includes $146 million for 45% of GTN’s debt. The purchase price for the GTN interest is $750 million in cash, and the Bison interest is $300 million in cash. TransCanada, through its subsidiaries, will continue to hold an approximately 30% direct ownership interest in both pipelines.

05/13/2013 Wenzel Downhole Tools Ltd. (TSX:WZL)

Basin Tools, LP $87.6 1.05x 4.68x

Basin Tools, LP entered into an arrangement agreement to acquire 72.25% stake in Wenzel Downhole Tools Ltd. (TSX:WZL) from Perlus Investment Management LLP and other shareholders for CAD 50.3 million. Basin Tools will acquire shares at an offer per share of CAD 2.25.

of 24




Announced

Date Target Buyer

Enterprise

Value

($USD in millions)

Enterprise

Value /

Revenue

Enterprise

Value /

EBITDA

05/08/2013 Chesapeake Energy Corporation., Certain Midstream Assets in the Anadarko Basin

MarkWest Energy Partners, LP (NYSE:MWE)

$245.0 - -

MarkWest Energy Partners, LP (NYSE:MWE) acquired certain Midstream Assets in the Anadarko Basin from Chesapeake Energy Corporation (NYSE:CHK) for $245 million in cash. The acquired assets consist of a cryogenic gas processing plant and gas gathering pipeline in Texas and approximately 30 miles of rights-of-way associated with the future construction of a high-pressure trunk line.

05/06/2013 Crestwood Midstream Partners LP (NYSE:CMLP)

Inergy Midstream, LP (NYSE:NRGM)

$1,877.0 8.07x 14.80x

Inergy Midstream, LP (NYSE:NRGM) signed a definitive agreement to acquire Crestwood Midstream Partners LP (NYSE:CMLP) for $1.9 billion. Under the terms of the agreement, Crestwood Midstream unitholders will receive 1.070 units of Inergy Midstream for each unit of Crestwood Midstream they own. Additionally, all Crestwood Midstream public unitholders other than Crestwood Holdings will receive a one-time cash payment at closing of approximately $35 million in the aggregate.

05/02/2013 Express Holdings (USA), LLC

Spectra Energy Partners, LP (NYSE:SEP)

$1,365.6 - -

Spectra Energy Partners, LP (NYSE:SEP) entered into an agreement to acquire 40% interest in Express Holdings (USA), LLC from Spectra Energy Partners (DE) GP, LP for approximately $580 million in cash, units and assumed debt. Under the terms of the deal, Spectra Energy Partners will pay approximately $379 million in cash, approximately 98% of $138.82 million in newly issued partnership units, and the rest in the form of its general partner units (which is Spectra Energy Partners (DE) GP, LP) and approximately $69 million of assumed debt.

05/01/2013 Mid-America Midstream Gas Services, LLC

SemGas, LP $300.0 - -

SemGas, LP entered into a definitive agreement to acquire assets of Mid-America Midstream Gas Services, LLC from Chesapeake Midstream Development, LP for approximately $300 million in cash. The purchase includes two natural gas processing plants in the Rose Valley area, 200 miles of gathering pipeline and a 20-year commitment from Chesapeake to gather and process natural gas on 540,000 acres of natural gas rights.

04/16/2013 TEAK Midstream, LLC Atlas Pipeline Mid-Continent Holdings, LLC

$1,000.0 - -

Atlas Pipeline Mid-Continent Holdings, LLC entered into a definitive agreement to acquire membership interests of TEAK Midstream, LLC from NGP Energy Capital Management for $1 billion. Atlas Pipeline has secured financing for the acquisition through a $400 million Series D Convertible Preferred issuance, as well as through committed bank financing from Citigroup and Wells Fargo.

04/12/2013 Overseas Shipholding Group Inc. (OTCPK:OSGI.Q)

- $2,160.7 1.97x 47.29x

Oslo Asset Management Asa sold 4.66% stake in Overseas Shipholding Group Inc. (OTCPK:OSGI.Q) for $6.5 million. Oslo sold 1.44 million shares of Overseas at the price of $4.49 per share.

04/08/2013 Lufkin Industries Inc. GE Oil & Gas SpA $3,323.4 2.52x -

GE Oil & Gas SpA entered into joint agreement to acquire Lufkin Industries Inc. (NasdaqGS:LUFK) from Kornitzer Capital Management, Inc., Eagle Asset Management, Inc. and other shareholders for $3.3 billion in cash. Lufkin shareholders will receive $88.5 per share in cash for each of their Lufkin shares.

04/08/2013 Greengate Power Corporation, 300 Megawatt Blackspring Ridge Wind Project

Enbridge Inc. (TSX:ENB); EDF EN Canada Inc.

$600.0 - -

Enbridge Inc. (TSX:ENB) and EDF EN Canada Inc. signed a purchase agreement to acquire 300 Megawatt Blackspring Ridge Wind Project from Greengate Power Corporation for CAD 600 million. EDF EN Canada and Enbridge will each own 50% of the project. Greengate will provide development services to Enbridge and EDF EN Canada during the construction of Blackspring Ridge.

Note: All enterprise value amounts are in $USD; however transaction synopses reference local currencies.

of 24




Energy Assets & Services

Valuation Overview

Notes:

(1) Outliers have been excluded from high, low, mean and median calculations

(2) Enterprise Value (EV) = Common equity value + preferred equity + debt – cash & short-term investments.

(3) EV multiples are based on the book value of the companies’ debt and not current trading volume. The numbers presented in this report have been adjusted to exclude non-recurring and extraordinary items, net of taxes (NM = No Multiple)

Stock Change Market Enterprise

Ticker Company Name Price High Low YTD (%) Cap Value (2) Revenue EBIT EBITDA


BHI Baker Hughes Incorporated $46.13 $50.97 $38.14 12.2% $20,381.5 $24,566.5 1.2x 11.8x 6.6x

BAS Basic Energy Services, Inc. $12.09 $16.60 $8.81 17.2% $483.2 $1,287.7 1.0x 19.8x 5.0x

DVR Cal Dive International Inc (1) $1.88 $3.08 $1.00 (35.2%) $184.1 $307.3 NM NM 49.9x

CAM Cameron International Corporation $61.16 $67.42 $41.26 43.2% $15,170.5 $15,674.3 1.8x 14.1x 11.4x

CRR CARBO Ceramics Inc. $67.43 $97.86 $60.33 (12.1%) $1,560.1 $1,476.3 2.3x 10.7x 8.0x

DWSN Dawson Geophysical Company $36.86 $39.36 $20.20 54.7% $289.2 $276.7 0.9x 14.0x 5.0x

DRC Dresser-Rand Group Inc. $59.98 $66.30 $42.82 34.7% $4,568.5 $5,563.8 2.0x 15.7x 12.5x

DRQ Dril-Quip, Inc. $90.29 $95.44 $64.01 37.7% $3,664.7 $3,345.7 4.5x 19.2x 16.6x

EXH Exterran Holdings, Inc. $28.12 $30.26 $12.57 120.5% $1,792.0 $3,565.9 1.2x 20.5x 6.8x

FTI FMC Technologies, Inc. $55.68 $59.27 $38.74 41.9% $13,206.7 $14,668.4 2.3x 22.3x 17.8x

GIFI Westinghouse Solar, Inc. (1) $19.15 $31.69 $18.76 (32.1%) $276.9 $274.6 0.5x NM 22.5x

GLF Gulfmark Offshore, Inc. (1) $45.09 $47.49 $27.17 32.5% $1,203.9 $1,585.7 4.0x 33.6x 14.8x

HAL Halliburton Company $41.72 $45.75 $27.62 47.0% $38,884.7 $41,408.7 1.4x 10.3x 7.2x

HLX Helix Energy Solutions Group, Inc. $23.04 $25.99 $15.54 40.4% $2,440.8 $2,538.6 3.1x 25.1x 13.6x

HOS Hornbeck Offshore Services, Inc. $53.50 $56.13 $31.96 38.0% $1,914.8 $2,515.1 4.7x 18.0x 11.0x

IO ION Geophysical Corporation $6.02 $7.87 $5.52 (8.6%) $944.2 $1,011.8 1.9x 14.5x 5.9x

KEG Key Energy Services Inc. $5.95 $9.57 $5.61 (21.7%) $906.2 $1,777.4 0.9x 11.3x 4.7x

MTRX Matrix Service Company $15.58 $17.93 $9.92 37.5% $406.2 $355.5 0.4x 11.3x 8.2x

NBR Nabors Industries Ltd. $15.31 $18.24 $12.75 6.3% $4,510.6 $8,280.4 1.2x 16.1x 5.2x

NOV National Oilwell Varco, Inc. $68.90 $89.95 $63.08 6.9% $29,439.7 $31,477.7 1.5x 9.0x 7.6x

NGS Natural Gas Services Group Inc. $23.49 $24.00 $13.27 58.5% $290.5 $260.1 2.8x 12.5x 7.1x

NR Newpark Resources Inc. $10.99 $11.78 $5.70 86.3% $946.9 $1,156.9 1.1x 10.7x 8.0x

NOF Northern Offshore Ltd (1) $1.40 $1.92 $1.33 (8.0%) $219.1 $219.1 1.2x 5.8x 3.2x

OIS Oil States International Inc. $92.64 $103.50 $63.42 39.9% $5,091.8 $6,039.0 1.4x 9.5x 6.8x

RES RPC Inc. $13.81 $17.40 $10.45 16.1% $3,045.9 $3,123.2 1.7x 8.3x 5.3x

SLB Schlumberger Limited $71.66 $82.00 $64.02 10.4% $95,268.4 $100,928.4 2.4x 13.0x 8.9x

SPN Superior Energy Services, Inc. $25.94 $29.22 $18.00 28.2% $4,139.6 $5,948.0 1.3x 8.6x 4.8x

TESO Tesco Corporation $13.25 $14.00 $8.70 10.4% $516.1 $486.1 0.9x 8.7x 4.9x

TTI TETRA Technologies, Inc. $10.26 $11.48 $5.35 43.9% $803.1 $1,148.9 1.3x 32.6x 10.1x

WG Willbros Group Inc. $6.14 $10.45 $4.07 (5.0%) $304.7 $546.5 0.3x 14.6x 6.5x

High 4.7x 32.6x 17.8x

Low 0.3x 8.3x 4.7x

Mean 1.7x 14.7x 8.3x

Median 1.4x 13.5x 7.1x

52 - Week Enterprise Value to (3):

of 24





Performance Overview

Notes:


TTM Revenue TTM Financials Margins

Ticker Company Name as of: Growth Revenue EBIT EBITDA Profit (%) EBIT EBITDA


BHI Baker Hughes Incorporated 03/31/13 2.8% $21,236.0 $2,083.0 $3,703.0 18.1% 9.8% 17.4%

BAS Basic Energy Services, Inc. 03/31/13 -4.4% $1,308.3 $65.1 $258.1 33.0% 5.0% 19.7%

DVR Cal Dive International Inc (1) 03/31/13 9.3% $485.7 -$46.9 $6.2 0.5% -9.6% 1.3%

CAM Cameron International Corporation 03/31/13 21.4% $8,815.5 $1,108.4 $1,373.6 29.2% 12.6% 15.6%

CRR CARBO Ceramics Inc. 03/31/13 -1.3% $630.0 $138.1 $184.2 32.1% 21.9% 29.2%

DWSN Dawson Geophysical Company 03/31/13 -16.3% $301.3 $19.7 $55.1 22.6% 6.5% 18.3%

DRC Dresser-Rand Group Inc. 03/31/13 8.5% $2,841.0 $354.8 $443.9 26.7% 12.5% 15.6%

DRQ Dril-Quip, Inc. 03/31/13 16.9% $749.1 $173.8 $201.0 38.5% 23.2% 26.8%

EXH Exterran Holdings, Inc. 03/31/13 13.7% $2,999.7 $154.8 $503.2 29.0% 5.2% 16.8%

FTI FMC Technologies, Inc. 03/31/13 18.2% $6,400.8 $657.6 $822.7 22.0% 10.3% 12.9%

GIFI Westinghouse Solar, Inc. (1) 03/31/13 49.2% $558.7 -$11.7 $12.2 2.2% -2.1% 2.2%

GLF Gulfmark Offshore, Inc. 03/31/13 2.7% $398.7 $47.2 $107.1 40.3% 11.8% 26.9%

HAL Halliburton Company 03/31/13 8.3% $28,609.0 $4,038.0 $5,729.0 15.1% 14.1% 20.0%

HLX Helix Energy Solutions Group, Inc. 03/31/13 27.1% $813.7 $92.4 $178.1 25.5% 11.4% 21.9%

HOS Hornbeck Offshore Services, Inc. (1) 03/31/13 25.8% $540.3 $139.8 $229.5 52.0% 25.9% 42.5%

IO ION Geophysical Corporation 03/31/13 14.4% $544.3 $70.7 $173.1 38.5% 13.0% 31.8%

KEG Key Energy Services Inc. 03/31/13 2.7% $1,901.8 $157.8 $375.0 31.8% 8.3% 19.7%

MTRX Matrix Service Company 03/31/13 17.3% $841.9 $31.5 $43.6 10.3% 3.7% 5.2%

NBR Nabors Industries Ltd. 03/31/13 1.5% $6,677.8 $743.2 $1,827.3 35.2% 11.1% 27.4%

NOV National Oilwell Varco, Inc. 03/31/13 33.1% $21,045.0 $3,431.0 $4,085.0 25.4% 16.3% 19.4%

NGS Natural Gas Services Group Inc. (1) 03/31/13 19.4% $91.3 $20.7 $36.9 49.1% 22.7% 40.4%

NR Newpark Resources Inc. 03/31/13 4.0% $1,058.2 $108.1 $143.9 18.5% 10.2% 13.6%

NOF Northern Offshore Ltd 03/31/13 31.6% $196.0 $39.0 $72.0 40.1% 19.9% 36.8%

OIS Oil States International Inc. 03/31/13 14.8% $4,383.5 $637.2 $883.6 25.0% 14.5% 20.2%

RES RPC Inc. 03/31/13 -3.2% $1,868.3 $376.1 $592.2 41.1% 20.1% 31.7%

SLB Schlumberger Limited 03/30/13 11.0% $42,910.0 $7,621.0 $11,166.0 21.5% 17.8% 26.0%

SPN Superior Energy Services, Inc. 03/31/13 86.0% $4,736.7 $693.4 $1,249.7 39.8% 14.6% 26.4%

TESO Tesco Corporation 03/31/13 -5.7% $527.8 $55.7 $99.4 21.2% 10.5% 18.8%

TTI TETRA Technologies, Inc. 03/31/13 13.1% $908.6 $35.3 $113.3 28.8% 3.9% 12.5%

WG Willbros Group Inc. (1) 03/31/13 41.2% $2,117.9 $37.4 $83.6 9.7% 1.8% 3.9%

High 41.1% 23.2% 36.8%

Low 10.3% 3.7% 5.2%

Mean 28.4% 12.3% 21.2%

Median 28.8% 11.8% 19.7%

of 24




Oil and Gas Refining and Marketing

Valuation Overview

Notes:

(1) Due to small sample size, outliers have not been removed for this population




Notes:




Oil & Gas Marketing & Refining (1)

CLMT Calumet Specialty Products Partners LP $36.38 $40.25 $23.39 53.0% $2,521.8 $3,437.0 0.7x 13.1x 9.5x

CVI CVR Energy, Inc. $47.40 $72.32 $26.31 78.3% $4,115.8 $4,210.3 0.5x 3.8x 3.4x

HFC HollyFrontier Corporation $42.78 $59.20 $33.92 20.7% $8,665.5 $8,053.8 0.4x 2.7x 2.5x

NS NuStar Energy L.P. $45.65 $54.95 $38.43 (15.3%) $3,555.5 $5,945.7 1.1x 31.2x 16.5x

TSO Tesoro Corporation $52.32 $65.75 $24.52 109.6% $7,210.3 $7,712.3 0.2x 4.4x 3.7x

VLO Valero Energy Corporation $34.77 $48.97 $23.47 44.0% $18,962.4 $24,049.4 0.2x 4.2x 3.5x

WNR Western Refining, Inc. $28.07 $39.42 $21.97 26.0% $2,325.7 $2,801.1 0.3x 3.0x 2.7x

CLMT Calumet Specialty Products Partners LP $36.38 $40.25 $23.39 53.0% $2,521.8 $3,437.0 0.7x 13.1x 9.5x

High 0.7x 13.1x 9.5x

Low 0.2x 2.7x 2.5x

Mean 0.4x 6.3x 5.0x

Median 0.4x 4.2x 3.5x




Oil & Gas Marketing & Refining (1)

CLMT Calumet Specialty Products Partners LP 03/31/13 29.9% $4,806.3 $262.2 $363.5 11.7% 5.5% 7.6%

CVI CVR Energy, Inc. 03/31/13 53.5% $8,951.1 $1,110.0 $1,242.1 17.4% 12.4% 13.9%

HFC HollyFrontier Corporation 03/30/13 10.1% $19,866.8 $3,013.8 $3,272.3 17.1% 15.2% 16.5%

NS NuStar Energy L.P. 03/31/13 -19.6% $5,346.0 $213.4 $382.3 9.0% 4.0% 7.2%

TSO Tesoro Corporation 03/30/13 7.8% $32,788.0 $1,738.0 $2,048.0 7.7% 5.3% 6.2%

VLO Valero Energy Corporation 03/30/13 1.8% $136,593.0 $5,759.0 $6,920.0 5.9% 4.2% 5.1%

WNR Western Refining, Inc. 03/31/13 -2.3% $9,350.1 $945.0 $1,040.5 12.4% 10.1% 11.1%

CLMT Calumet Specialty Products Partners LP 03/31/13 29.9% $4,806.3 $262.2 $363.5 11.7% 5.5% 7.6%

High 17.4% 15.2% 16.5%

Low 5.9% 4.0% 5.1%

Mean 11.6% 7.8% 9.4%

Median 11.7% 5.5% 7.6%

of 24




Oil and Gas Transportation and Storage

Valuation Overview

Notes:






Energy Oil & Transportation & Storage

ATLS Atlas Energy, L.P (1) $48.99 $53.60 $29.31 60.6% $2,516.8 $6,197.5 3.8x 123.1x 27.6x

BKEP Blueknight Energy Partners, L.P. $8.77 $9.50 $6.08 31.7% $198.9 $32.2 0.2x 0.9x 0.5x

BPL Buckeye Partners, L.P. (1) $70.16 $70.50 $44.37 34.5% $7,407.6 $10,121.9 2.3x 22.8x 17.4x

LNG Cheniere Energy, Inc. (1) $27.76 $31.52 $12.19 88.3% $5,985.1 $11,594.2 42.7x NM NM

XTXI Crosstex Energy Inc. $19.76 $21.59 $11.32 41.1% $940.6 $2,898.7 1.7x 53.0x 15.0x

DPM DCP Midstream Partners LP $54.10 $54.38 $37.78 28.4% $4,154.5 $6,066.5 3.9x 25.7x 21.2x

EPB El Paso Pipeline Partners, L.P. $43.67 $44.99 $33.26 29.2% $9,446.5 $11,304.5 7.5x 12.4x 10.3x

EEP Enbridge Energy Partners LP $30.49 $31.17 $26.88 (0.9%) $9,583.5 $16,919.9 2.6x 31.6x 19.0x

ETE Energy Transfer Equity, L.P. $59.82 $62.50 $39.91 45.8% $16,792.2 $53,891.2 2.0x 27.9x 18.2x

EPD Enterprise Products Partners L.P. $62.15 $63.56 $48.52 21.3% $56,319.5 $72,689.2 1.7x 21.5x 16.1x

GEL Genesis Energy LP $51.83 $54.91 $28.79 78.3% $4,208.7 $5,164.6 1.2x 39.2x 27.3x

GLP Global Partners LP $39.90 $40.00 $21.93 75.3% $1,093.0 $1,915.4 0.1x 19.6x 12.7x

NRGY Inergy, L.P., Prior to Reverse Merger (1) $0.00 $0.00 $0.00 (100.0%) $0.0 $0.0 0.0x 0.0x 0.0x

KMP Kinder Morgan Energy Partners, L.P. $85.40 $92.99 $74.76 8.7% $36,230.3 $58,361.3 6.2x 20.0x 14.2x

MMP Magellan Midstream Partners LP $54.50 $56.29 $35.02 54.3% $12,354.0 $14,524.7 8.5x 25.4x 20.6x

MWE MarkWest Energy Partners, L.P. $66.85 $71.20 $46.03 35.6% $8,714.7 $11,790.5 8.6x 30.6x 17.8x

MMLP Martin Midstream Partners LP $44.09 $46.37 $30.03 34.7% $1,173.9 $1,705.4 1.1x 21.6x 13.8x

NS NuStar Energy L.P. $45.65 $54.95 $38.43 (15.3%) $3,555.5 $5,945.7 1.1x 31.2x 16.5x

OKS ONEOK Partners, L.P. $49.52 $61.34 $45.40 (7.9%) $10,900.1 $15,798.2 1.6x 15.9x 13.2x

PAA Plains All American Pipeline, L.P. $55.81 $59.52 $40.00 38.1% $18,998.3 $26,815.3 0.7x 13.5x 11.5x

RGP Regency Energy Partners LP (1) $26.97 $27.15 $20.58 13.5% $5,457.3 $8,241.3 6.2x 49.3x 23.9x

SE Spectra Energy Corp. $34.46 $34.83 $26.55 18.6% $23,060.5 $38,426.5 7.5x 19.8x 14.3x

SXL Sunoco Logistics Partners L.P. $63.95 $68.44 $35.89 76.3% $6,638.0 $9,979.0 0.8x 15.0x 11.8x

TCP TC PipeLines, LP $48.28 $50.27 $38.74 12.0% $2,953.4 $3,663.4 20.0x 24.6x 22.9x

TLP Transmontaigne Partners L.P. $41.91 $50.77 $31.51 26.0% $605.9 $900.1 5.7x 20.6x 12.4x

WMB Williams Companies, Inc. $32.47 $38.57 $28.25 12.7% $22,167.0 $35,659.0 4.9x 21.7x 14.6x

WPZ Williams Partners L.P. $51.60 $55.90 $45.01 (1.2%) $21,357.3 $29,606.3 4.2x 18.8x 12.7x

High 20.0x 53.0x 27.3x

Low 0.1x 0.9x 0.5x

Mean 4.2x 23.2x 15.3x

Median 2.3x 21.5x 14.5x


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Oil and Gas Transportation and Storage


Notes:




Energy Oil & Transportation & Storage

ATLS Atlas Energy, L.P 03/31/13 1.2% $1,630.7 $43.2 $217.0 21.4% 2.6% 13.3%

BKEP Blueknight Energy Partners, L.P. 03/31/13 2.0% $183.4 $37.2 $60.5 30.8% 20.3% 33.0%

BPL Buckeye Partners, L.P. 03/31/13 -6.8% $4,442.8 $437.6 $577.6 23.8% 9.8% 13.0%

LNG Cheniere Energy, Inc. (1) 03/31/13 -6.4% $266.0 -$142.6 -$77.4 51.0% -52.5% -28.5%

XTXI Crosstex Energy Inc. 03/31/13 -8.8% $1,729.8 $51.6 $190.5 23.0% 3.0% 11.0%

DPM DCP Midstream Partners LP 03/31/13 -38.9% $1,539.9 $205.3 $254.7 15.3% 13.3% 16.5%

EPB El Paso Pipeline Partners, L.P. (1) 03/31/13 -1.0% $1,511.0 $901.0 $1,081.0 77.3% 59.6% 71.5%

EEP Enbridge Energy Partners LP 03/31/13 -23.9% $6,579.6 $534.9 $888.3 30.0% 8.1% 13.5%

ETE Energy Transfer Equity, L.P. 03/31/13 236.3% $24,284.0 $1,707.0 $2,736.0 13.0% 6.4% 10.3%

EPD Enterprise Products Partners L.P. 03/31/13 -5.9% $42,713.7 $3,288.1 $4,418.9 8.1% 7.7% 10.3%

GEL Genesis Energy LP 03/31/13 26.7% $4,256.6 $117.1 $174.5 5.2% 2.8% 4.1%

GLP Global Partners LP 03/31/13 26.1% $19,239.7 $97.6 $150.5 1.9% 0.5% 0.8%

NRGY Inergy, L.P., Prior to Reverse Merger 06/30/13 -2.9% $1,371.3 $138.1 $264.7 29.8% 6.6% 12.7%

KMP Kinder Morgan Energy Partners, L.P. 03/31/13 20.9% $9,455.0 $2,558.0 $3,747.0 47.4% 27.1% 39.6%

MMP Magellan Midstream Partners LP 03/31/13 -4.9% $1,711.0 $568.4 $701.2 47.7% 33.2% 41.0%

MWE MarkWest Energy Partners, L.P. (1) 03/30/13 -13.2% $1,372.7 $385.2 $661.2 61.5% 28.1% 48.2%

MMLP Martin Midstream Partners LP 03/31/13 17.8% $1,575.7 $80.9 $124.9 9.6% 5.1% 7.9%

NS NuStar Energy L.P. 03/31/13 -19.6% $5,346.0 $213.4 $382.3 9.0% 4.0% 7.2%

OKS ONEOK Partners, L.P. 03/31/13 -11.5% $10,105.5 $877.9 $1,086.4 15.7% 8.7% 10.8%

PAA Plains All American Pipeline, L.P. 03/30/13 9.5% $39,199.0 $1,947.0 $2,289.0 6.7% 5.0% 5.8%

RGP Regency Energy Partners LP 03/30/13 -1.1% $1,441.0 $59.0 $237.0 19.8% 3.9% 15.9%

SE Spectra Energy Corp. 03/31/13 -3.1% $4,981.0 $1,562.0 $2,310.0 52.7% 30.5% 45.1%

SXL Sunoco Logistics Partners L.P. 03/30/13 9.7% $13,221.0 $647.0 $825.0 7.2% 4.9% 6.2%

TCP TC PipeLines, LP (1) 03/31/13 -17.6% $66.0 $149.0 $160.0 90.7% 81.4% 87.4%

TLP Transmontaigne Partners L.P. (1) 03/31/13 4.6% $159.0 $43.2 $71.8 57.9% 27.1% 45.2%

WMB Williams Companies, Inc. 03/31/13 -9.9% $7,277.0 $1,547.0 $2,345.0 39.7% 21.3% 32.2%

WPZ Williams Partners L.P. 03/31/13 -12.3% $7,108.0 $1,472.0 $2,226.0 38.6% 20.7% 31.3%

High 52.7% 33.2% 45.1%

Low 1.9% 0.5% 0.8%

Mean 22.6% 11.2% 17.3%

Median 20.6% 7.2% 12.8%

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Independent Power Producers (IPPs)/Merchant Generators

Valuation Overview

Notes:





Notes:




IPP & Merchant Generators (1)

ATP Atlantic Power Corporation $3.91 $14.35 $3.83 (69.4%) $468.4 $2,867.4 6.8x 48.3x 15.5x

CPN Calpine Corp. $21.23 $22.16 $16.42 28.6% $9,665.1 $19,729.1 3.6x 33.5x 16.4x

DYN Dynegy Inc. $22.55 $25.18 $17.00 NM $2,255.0 $3,333.0 2.5x NM 24.2x

NRG NRG Energy, Inc. $26.70 $28.67 $16.66 53.8% $8,610.4 $24,295.4 2.8x 53.8x 14.8x

AES The AES Corporation $11.99 $14.00 $9.52 (6.5%) $8,951.0 $30,869.0 1.7x 9.5x 6.7x

High 6.8x 53.8x 24.2x

Low 1.7x 9.5x 6.7x

Mean 3.5x 36.3x 15.5x

Median 2.8x 40.9x 15.5x




IPP & Merchant Generators

ATP Atlantic Power Corporation 03/31/13 176.1% $388.7 $41.9 $172.6 31.1% 9.6% 39.3%

CPN Calpine Corp. 03/31/13 -14.7% $5,513.0 $562.0 $1,174.0 25.1% 10.2% 21.2%

DYN Dynegy Inc. (1) 03/31/13 22.5% $1,343.0 -$225.0 $136.0 5.5% -16.8% 10.1%

NRG NRG Energy, Inc. 03/31/13 -3.4% $8,641.0 $420.0 $1,612.0 27.5% 4.9% 18.7%

AES The AES Corporation 03/31/13 2.7% $17,820.0 $3,217.0 $4,577.0 19.6% 18.1% 25.7%

High 31.1% 18.1% 39.3%

Low 19.6% 4.9% 18.7%

Mean 25.8% 10.7% 26.2%

Median 26.3% 9.9% 23.5%

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Notes

� Sources: Capital IQ, Bloomberg, company 10-K, 10-Q and 8-K SEC filings, annual reports, press

releases, and others as indicated.

� Any public companies chosen for the “NCA Energy Universe” are companies commonly used

for industry information to show performance within a sector. They do not include all public

companies that could be categorized within the sector and were not created as benchmarks; they

do not imply benchmarking and do not constitute recommendations for a particular security

and/or sector. The charts and graphs used in this report have been compiled by Navigant

Capital Advisors solely for purposes of illustration.

For further information regarding our Energy Services, please contact:

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About Navigant Capital Advisors

Navigant Capital Advisors is the dedicated corporate finance business unit of Navigant (NYSE: NCI). Navigant

Capital Advisors serves the investment banking and private equity, restructuring and valuation needs of

companies, private equity groups, lenders and other creditor constituencies. The firm arranges private placements

of debt and equity, advises on mergers and acquisitions, as well as initiates divestitures for the owners of

businesses across a broad range of industries. The firm also represents borrowers, secured lenders and other

creditor constituencies in connection with financial and operating restructurings. Finally, we provide

transactional valuations, fairness opinions and other financial reporting and compliance services to companies and

their boards.

NCA gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. NCA makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. (Officers, directors and employees of Navigant Consulting, Inc. and its subsidiaries may have positions in the securities of the companies discussed.) This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. NCA or its affiliates may from time to time provide investment banking or related services to these companies. Like all NCA employees, the authors of this publication receive compensation that is affected by overall firm profitability.

©2013 Navigant Capital Advisors, LLC. All rights reserved. Navigant Capital Advisors, LLC (Member FINRA, SIPC) is a wholly owned broker/dealer of Navigant Consulting, Inc. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See www.navigant.com/licensing for a complete listing of

private investigator licenses. of 24




Navigant: Representative Engagements

of 24




Navigant Wins Consultancy of the Year Award - Gulf Coast Region

Navigant was named Consultancy of the Year – Gulf Coast Region

by Oil and Gas Awards based on an entry submitted on its recent

work for the Gulf LNG Liquefaction Company, LLC (GLNG) which

submitted its application for LNG export on August 31, 2012.

Successes

Navigant’s work for the American Clean Skies Foundation in 2008,

established Navigant as a reputable leader in the area of natural gas

shale and unconventional gas in North America. By mid-2010,

Cheniere Energy engaged by Navigant to provide an analysis that

would be used by Cheniere for its ground-breaking application to

the DOE for approval to export of LNG from Cheniere’s Sabine Pass

LNG export project in Texas. Despite several other DOE

applications that have been submitted since, including the current

GLNG application this year, the Cheniere Sabine Pass LNG export

project remains the only LNG export project to have received DOE

approval to export to non-Free Trade countries.

Navigant’s successful analysis played an instrumental part of the favorable DOE Cheniere decision and the

“lessons learned” from Cheniere will hopefully carry forward as part of the GLNG project application, as well as

several other LNG export projects, that are currently before the DOE pending a decision.

Expertise

In addition to the successful Cheniere Sabine Pass application, Navigant has supported seven other U.S. LNG

export projects, including the GLNG project, to provide similar in-depth analyses on the construction of LNG

export facilities. As such, Navigant has become a recognized leader in the area of providing independent third

party market impact studies for LNG project developers planning on filing applications for the export of LNG to

the DOE. Navigant has assisted these large infrastructure projects that range in size from capital costs of $3 billion

to $10 billion by using its proprietary natural gas market modeling and forecasting tools. These tools allow

Navigant to perform a detailed market analysis that is unique to each project and allows the client to better make

informed decisions on specific LNG export projects. In addition, the analysis serves as an independent third

party analysis for the DOE review and application process. In fact, the methodology and analysis first developed

by Navigant, has proven to be key in the approach taken by other projects and towards answering questions of

interest to the DOE and others, including matters as important as national security, energy independence, and

resource sustainability.

Relevance

In an era of expected ongoing gas production successes, particularly in the development of North American

natural gas shale, LNG exports hold promise as an important emerging new market to assure the ongoing

development of natural gas as a clean and abundant energy source for the future. Navigant’s understanding and

early work done in the natural gas and shale area has proven invaluable for GLNG and for other LNG projects.

Navigant’s work in assessing the impact of LNG exports should over the next few years provide new global

market opportunities for natural gas as North America becomes more connected to the global market. As this

occurs, LNG exports will become an important piece of a new natural gas market structure in North America that

will, in turn, help assure a healthy upstream natural gas producing sector. This will be for the benefit of the

natural gas industry, the economy, and for the country as a whole over the long-term.

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