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Energy

QUARTERLY DIALOGUE FIRST QUARTER 2013

May 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 first 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 shale gas in the “Industry

Perspectives” section, with an excerpt from the April 2013 issue of Financier

Worldwide featuring Raoul Nowitz, Navigant Capital Advisors’ resident expert

in the unconventional oil & gas sector. Expanding upon an emerging theme

presented in our last Quarterly Dialogue, the shift from coal to natural gas fired

power generation has slowed, primarily due to the recent increase in natural gas

prices. In spite of the recent increase, natural gas prices still remain at historical

lows.

Overall, the industry experienced a slowdown in the first quarter as M&A

activity markedly decreased both in terms of transaction size and volume, and

leveraged loan volumes remained stagnant, while loan default rates remain 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 9

Selected M&A Transactions 12

Valuation & Performance Metrics 14

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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

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Energy: Market Overview (cont.)

NCA Energy Universe

NCA Energy Assets & Services NCA Oil & Gas 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 Geokinetics Inc. 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.

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

LUFK Lufkin Industries Inc. NS NuStar Energy L.P.

MTRX Matrix Service Company OKS ONEOK Partners, L.P.

NBR Nabors Industries Ltd. PAA Plains All American Pipeline, L.P.

NOV National Oilwell Varco, Inc. RGP Regency Energy Partners LP

NGS Natural Gas Services Group Inc. SE Spectra Energy Corp.

NR Newpark Resources Inc. SXL Sunoco Logistics Partners L.P.

NOF Northern Offshore Ltd TCP TC PipeLines, LP

OIS Oil States International Inc. TLP Transmontaigne Partners L.P.

RES RPC Inc. WMB Williams Companies, Inc.

SLB Schlumberger Limited WPZ Williams Partners L.P.

SPN Superior Energy Services, Inc.

TESO Tesco Corporation NCA Oil & Gas Refining & Marketing

TTI TETRA Technologies, Inc. CLMT Calumet Specialty Products Partners LP

WG Willbros Group Inc. CVI CVR Energy, Inc.

HFC HollyFrontier Corporation

NCA IPP & Merchant Generators NS NuStar Energy L.P.

ATP Atlantic Power Corporation TSO Tesoro Corporation

CPN Calpine Corp. VLO Valero Energy Corporation

DYN Dynegy Inc. WNR Western Refining, Inc.

NRG NRG Energy, Inc. INT World Fuel Services Corp.

AES The AES Corporation

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Energy: Market Overview (cont.)

� As presented in Fig. A, global energy M&A severely dropped off in the first quarter of 2013, as

activity decreased during the quarter with 385 transactions reported, a 20.3% decrease over the

average of 483 transactions reported for each of the prior three quarters, and down 29.1% from

the first quarter of 2012.

� From an aggregate dollar value perspective, global M&A decreased nearly 35%, from an average

aggregate value of $85.5 billion for the last three quarters, to $55.9 billion, but is down only 5.6%

when compared to the same prior year quarter.

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

electricity is up 4.3% from the end of the prior quarter to 348.6 million MWH, the portion of

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

nearly 40% of all electricity generated came from coal fired plants, up 2% from the prior year.

Though natural gas fired plants’ share of generated electricity decreased 2% from the prior year,

it still accounts for over 25% of total power generation.

� The S&P 500 Energy Sector Index increased 1.8% over the first quarter as compared to 3.6% in the

broader S&P 500, as shown in Fig. C and D. Gains in the S&P 500 Energy Sector index were

driven primarily by increases in the Oil & Gas Transportation and Storage and IPP and Merchant

Generators subsectors, which increased 6.2% and 8.4%, respectively, in the related NCA index.

� NCA’s Energy Assets and Services and Oil and Gas Refining and Marketing subsectors declined

0.6% and 1.5%, respectively, partially offsetting gains in the general energy sector.

� The Oil & Gas sector saw institutional loan volumes drop more than 22% from the prior quarter

to $4.3 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 in the future as the current environment of loose monetary policy

results in inflationary pressures, ultimately impacting lower credit quality borrowers.

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Industry Perspectives: Trends & Developments in Shale Gas

In April 2013, Financier Worldwide.com (“FW”) featured responses from Raoul Nowitz, Director with

Navigant Capital Advisors, on trends and developments in shale gas. Navigant’s responses incorporated

contributions from professionals across both the Energy and Economics consulting practices. The

discussion was prompted by the tremendous surge in activity associated with shale gas in the U.S. and

globally. In 2008, Gordon Pickering and Rick Smead, Directors responsible for the Fuels group within

Navigant’s Energy Practice, and contributors to the responses below, were among pioneers quantifying the

potential of shale gas even before its recent increase in popularity and importance in the overall energy fuel

mix. Since 2008, Navigant has seen multiple implications emerge from natural gas abundance, low prices,

and environmental pressures. Rob Wentland, a Managing Director in the Disputes & Investigations practice

of Navigant Consulting, Peter Badala, a Managing Director in the Global Construction Practice, and Julie

Carey, Director in Navigant’s Economics Practice, also provided perspective.

_____________________________

Recent Shale Gas Trends & General Activity

FW: What are some of the major trends you have seen in the shale gas space over the last 12-18

months? How would you describe general activity and development in this sector? � On a global basis, shale gas activity remains primarily a North American phenomenon where the

continuing trend has been for still-increasing gas shale production to drive total gas production

increases despite the sluggish state of the economy that has limited natural gas demand. As a result,

there has been downward pressure on natural gas prices, with lower gas prices – in the face of much

higher oil prices – resulting in a dramatic decline in natural gas directed drilling, in favour of increased

oil-directed drilling. Even though a sharp decline in horizontal drilling, essentially the only form of

drilling that accounts for shale gas, has been observed, natural gas production has continued to

increase. This is seen as somewhat remarkable in itself, and highly supportive of the sheer magnitude of

the natural gas resources in North America.

Shale Gas’ Impact on Conventional Energy

FW: How have developments in the shale gas space impacted upon the conventional energy

market in your region? � While shale gas activity is brisk in the country’s major shale producing regions – particularly the

Marcellus basin – shale gas development is also emerging in California, and in British Columbia and

Alberta in Western Canada. In British Columbia, large resources in the Montney, Horn River and Laird

shale basins came into focus two to three years after the major US shale basins, and continue to lag

behind US shale basin activity partially as a result of their remote location. Geographically remote shale

basins require a different level of infrastructure to develop the supply. One major impediment in British

Columbia – and the rest of Western Canada – has been the practical loss of their largest sales outlet as

the US shale gas industry has been able to provide abundant and relatively more competitive domestic

gas supply to the US market. In California, as the extent of resource base continues to become known,

regulatory bodies have signalled the need for informed policy-making to guide the development of the

shale gas industry. Like other jurisdictions facing the same situation, California is grappling with the

best way forward as the incredible economic potential of shale gas development intersects with the

realities of unprecedented large scale transformational change. Given the situation, California could

experience similar ‘transformations’ as have been seen in Pennsylvania, Ohio and West Virginia.

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Addressing Safety & Environmental Concerns

FW: In what ways are shale gas operators addressing general criticisms, environmental issues

and safety concerns? Are technological advances and processes changing the field? � As the entire natural gas industry transforms, it continues to make progress in developing better

hydrocarbon extraction processes. Although the key technological ‘breakthrough’ to shale gas

extraction is the combination of hydraulic fracturing and horizontal drilling, other technological

advances have also occurred recently. These include the practice of drilling multiple wells from a single

drill platform and advances in lengthening horizontal drilling and completion of laterals – both of

which reduce the extraction activity ‘footprint’ while improving drilling economics, with, for instance,

lower per-unit costs. At the same time, as more shale gas wells are drilled, the industry is grappling

with the issue of use and re-use of water in the hydraulic drilling process. Although the water

quantities used in hydraulic fracturing are comparatively small relative to other industries – such as in

agriculture – considerable attention is being given to alternatives to fresh water use such as using

already contaminated acid mine drainage water, especially for those areas that are relatively short on

water supply and close to where old mines exist. A key environmental benefit of shale gas should be

emphasised. The US has made substantial progress in reducing greenhouse gas emissions, reaching

nearly 20-year lows, because natural gas generation replaces coal generation in the production of

electricity.

Legal & Regulatory Matters

FW: What legal issues face companies looking to enter in the shale gas industry? With particular

regard to hydraulic fracturing, what steps have authorities recently taken to regulate this

process? � As highlighted in Navigant’s January 2013 Litigation Trends Report, royalty disputes are dominating the

shale gas and oil litigation landscape, followed by disputes involving breach of contract; land and lease

rights; environmental and product liability; and zoning and regulatory issues. The volume of litigation

facing the shale gas and oil industry increased dramatically during the middle of 2012 in comparison to

the prior year. Federal regulatory bodies –notably the Department of Justice and the Federal Energy

Regulatory Commission – have stepped up their efforts to track and enforce manipulation of oil and gas

prices, collusion, fraud and other violations of state and federal laws, by forming special task forces or

proposing new mandates to disclose operations and trading data. State regulators are primarily focused

on environmental regulation and the pursuit of increased tax revenue.

Shale Gas M&A Activity

FW: What factors have driven M&A activity in the shale gas sector over the past 12 months?

What developments do you expect to see in 2013? � Shale-led transactions have represented a majority of total upstream M&A transaction value over the

past two years, and have contributed a significant percentage of aggregate energy transactions over the

past year. However, unconventional gas plays are plateauing and entering a decline phase, which will

be difficult to curb without new drilling activity – as approximately 75 percent of shale rigs are now

deployed to NGL and oil production. Shale M&A activity in 2013 is expected to remain robust,

recognising a greater concentration towards NGL and oil, with many domestic majors divesting

upstream and midstream businesses, as well as selling non-core acreages in plays to reduce debt and to

raise capital to fund NGL and oil drilling activities. Aided by accommodating capital markets,

opportunistic financial buyers are snapping up these assets, while strategic buyers with strong balance

sheets are acquiring weaker producers and service providers at a more attractive valuation. Risks to

greater gas shale M&A activity in 2013 include persistently low natural gas prices, environmental

concerns, and heightened governmental regulation.

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Shale Gas in Other Global Regions (ex-US)

FW: Has the success of shale gas in the US been replicated in other regions? Which regions are

poised to provide lucrative returns for firms and investors? � As the result of the shale gas and oil revolution, the US market is seeing unprecedented opportunity.

Other nations with abundant shale gas and oil supply include China, Mexico, Argentina, India, Russia,

Canada, Poland, and Australia. While these countries also have the potential to realise opportunities

similar to what US market participants have experienced, many currently lack the resources,

technology and infrastructure necessary to safely, effectively, and efficiently extract and bring their

supply to market. Additionally, as US shale gas production ramps up and the country shifts from being

a net importer of natural gas to a net exporter, US LNG export facilities are likely to form a crucial

component of volumes delivered to other regions, thus altering global market dynamics. The nature of

competition will create both winners and losers in the global shale gas markets. While opportunities are

substantial and enticement levels are high, there will be fallout resulting from the highly competitive

nature of the market.

Other Issues for Investors

FW: Overall, what key issues should investors consider before committing to the shale gas

space? � Investors need to have a fundamental view that natural gas prices will recover sufficiently enough to

restore supply and demand equilibrium, and will sustain a level of profitability over the longer-term to

justify valuation levels worthy of investment. One key factor will be meaningfully improved pricing

levels over a reasonable investment horizon as the supply overhang is worked off. Part of this

rebalancing will be driven by shifts in upstream producers’ exploration and production strategies –

from maximising dry gas production to a greater focus on oil and wet gas plays. Increased natural gas

consumption will be critical to rebalancing supply and demand, including substantially higher levels of

natural gas usage in the power generation sector – and potentially the transportation sector – as well as

sustained industrial consumption and material increases in LNG exports. Another key issue is the

availability of sufficient pipeline and other infrastructure to get the abundant natural gas, LNG, and

crude oil supplies to market. Finally, investors will need to assess regulatory and environmental

limitations on drilling as additional risks imposed by state and federal agencies have the potential to

curtail activity, and adversely impact investment returns.

For the entire article go to: http://www.financierworldwide.com/article_printable.php?id=10419

_____________________________

About the contributors:

Peter Badala is a Managing Director with Navigant, and has global responsibility for the International Construction Arbitration

practice. For the past 30 plus years, Mr. Badala has provided forensic accounting, auditing, and claims consulting services and expert

testimony to clients on more than 200 construction projects around the world. His assignments have included the preparation, defense

and resolution of claims for changed/extra work, delay, disruption, lost productivity and terminations, evaluation of contractor /

subcontractor accounting systems and internal controls, contract close-outs, reasonableness reviews and compliance with the contract

terms and conditions (e.g. allowable and allocable) and the performance of interim and close out contract audits, funds tracing and

analysis of mechanics lien claims. He can be contacted at +1 415 356 7113 or by email: [email protected].

Julie Carey is a Director with Navigant Economics focusing on energy economics, regulatory economics and antitrust analyses,

primarily involving electricity, renewable energy, coal, natural gas, railroad transportation, and telecommunications industries. Ms.

Carey has a deep understanding of the unique economics of network industries. She has been working on energy economic issues

within litigation and regulation for nearly 20 years and has provided expert testimony before state and federal regulatory agencies and

in state and federal courts for the last decade. Ms. Carey routinely provides testifying and consulting expertise in disputes assisting

with damages assessments, analyses of markets and market designs, evaluation of contracting practices, asset valuations, and

environmental analyses. Her engagements also involve antitrust issues, such as competition analysis, analysis for approval for

mergers and acquisitions or other antitrust claims. She can be contacted at +1 202 481 7551 or by email:

[email protected].

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Raoul Nowitz is a Director with Navigant Capital Advisors, Navigant’s corporate finance arm, serving as part of the firms

Unconventional Oil & Gas service team. Mr. Nowitz focuses on providing financial and operating restructuring advisory services

and solutions, mergers and acquisitions advisory services, and capital raisings to companies in a variety of industries including the

energy sector. Mr. Nowitz is a Chartered Accountant (South Africa), is FINRA Series 7 and 63 licensed, is a Certified Insolvency and

Restructuring Advisor and has a Certification in Distressed Business Valuation. He can be contacted at +1 404 504 2071 or by email:

[email protected].

Gordon Pickering is a Director in Navigant's energy practice, leading our North American natural gas pricing and LNG services.

Mr. Pickering has over 30 years of energy industry experience, in the natural gas industry in the United States and Canada,

including service with a large Canadian oil and natural gas exploration and production company, and marketing and business

development responsibility with a Canadian natural gas marketing company and a US based public electric utility. Mr. Pickering was

co-author of the ‘North American Natural Gas Supply Assessment’ study, a gas supply research project for the American Clean Skies

Foundation. This widely distributed 2008 study updated the natural gas resource base in North America, and was the first study to

identify natural gas as an abundant, clean and domestic fuel supply source. He can be contacted at +1 916 631 3249 or by email:

[email protected].

Rick Smead is a Director in Navigant's energy practice, specializing in upstream and midstream natural gas issues. He has been

responsible for multiple engagements involving natural gas supply, potential acquisitions, policy analysis, litigation support, and

strategic advice with respect to gas pipelines, potential supplies, and market initiatives (including a concentration on LNG and

unconventional domestic gas). Mr. Smead brings to our clients the benefit of more than 33 years' experience in the natural gas

business, with a proven track record as a senior executive for several major natural gas pipelines and a leader across multiple industry

sectors. He is known for a combination of hands-on, industry-recognized expertise in technical issues, effective management of both

internal and external processes, and industry leadership on policy issues. He can be contacted at +1 713 646 5029 or by email:

[email protected].

Rob Wentland is a Managing Director within the Disputes & Investigations practice of Navigant Consulting. For the past 20 years,

Mr. Wentland has focused his consultancy on tax controversy, complex commercial litigation, U.S. Government accounting

investigations, and regulatory and cost accounting expert testimony. He has prepared or provided expert testimony for state, federal

and the U.S. Tax courts. Prior to joining Navigant, he was a Managing Director with Huron Consulting Group and a Partner with

Arthur Andersen. Mr. Wentland is a Certified Public Accountant (licensed in Illinois) and graduated with honors from the

University of Wisconsin-Madison (BBA in Accounting). He can be contacted at +1 312 583 2644 or by email:

[email protected].

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Energy: Notable Industry Developments

Date Industry Development

3/28/13 Hornbeck Offshore Services, Inc. announced that it had accepted for purchase and payment approximately 94% of

the $250.0 million in aggregate principal amount of its 8.00% senior notes due 2017. In addition, the company

issued and sold $450 million in aggregate principal amount of its 5.00% senior notes due 2021 or the 5.00% notes

(maturing 2021), in a private placement.

3/27/13 FMC Technologies, Inc. announced that it has received an order from Petrobras for the supply of the first subsea

manifold systems for its pre-salt fields, located offshore from Brazil. The value of the contract is approximately

$130 million in revenue. This initial award includes three manifolds, tools, spare parts and system integration with

subsea controls, and will be installed in water depths up to 8,200 feet (2,500 meters). Deliveries are scheduled to

commence in 2015.

3/27/13 FMC Technologies, Inc. has signed a contract with BP Plc for the manufacture and supply of subsea equipment to

support the Mad Dog Phase II field development. Under the initial contract, FMC Technologies will supply subsea

trees, manifolds, and jumper equipment. Mad Dog Phase II is the first project awarded under global agreement

with BP to provide technologies and services for their worldwide subsea development projects.

3/26/13 Global Partners LP announced that it has executed a pipeline connection agreement with Tesoro Logistics LP

whereby Tesoro Logistics' High Plains Pipeline System will build, own and operate a new seven-mile pipeline

lateral from its Lignite, ND crude oil station to Global's 100,000 barrel crude oil storage tank at the Basin Transload

facility in Columbus, ND. Crude oil is expected to begin flowing to the new Columbus-bound branch in the third

quarter of 2013.

3/25/13 Basic Energy Services, Inc. announced that Ken Huseman, President and CEO, intends to retire at the end of 2013.

As part of a planned leadership succession process, the Board of Directors intends to appoint Thomas M. "Roe"

Patterson, currently Senior Vice President and Chief Operating Officer of Basic Energy Services, to succeed Mr.

Huseman as President and Chief Executive Officer of the company, on or about January 1, 2014. Mr. Patterson has

18 years of related industry experience. He has been Basic's Senior Vice President and Chief Operating Officer

since March 2011 and Senior Vice President of Rig and Truck operations since September 2008.

3/22/13 NRG Energy, Inc. has announced a Fixed-Income Offering in the amount of $990.00 million (6.625%, matures

2023).

3/21/13 A federal judge has dismissed all claims against BP's drilling fluids contractor on the rig that exploded in the Gulf

of Mexico in 2010, killing 11 workers and triggering the nation's worst offshore oil spill. After plaintiffs rested their

case in the trial over the Gulf oil spill, U.S. District Judge Carl Barbier ruled there was no evidence that the

contractor, M-I LLC, made any decision that led to the blowout of BP's well. Barbier also agreed to rule out

punitive damages against Cameron International, the manufacturer of a blowout preventer on the ill-fated rig.

3/19/13 Merchant Law Group LLP launched a class action with the Ontario Superior Court of Justice, seeking to recover

hundreds of millions of dollars in damages on behalf of Atlantic Power Corporation's shareholders. As stated in

the litigation, Atlantic Power Corporation repeatedly emphasized in statements to the market that its previous

dividends would be "sustainable into 2016 before considering any positive impact from potential future

acquisitions or organic growth opportunities." Notwithstanding those previous statements, shareholders have

recently seen the dividend paid on their shares decreased by more than half.

3/18/13 Shareholder rights attorneys at Robbins Arroyo LLP announce that the firm commenced a class action lawsuit

with Robbins Geller Rudman & Dowd LLP on February 28, 2013, in the U.S. District Court, Southern District of

Texas, Houston Division, on behalf of the unit holders of Copano Energy LLC against Copano and its board of

directors, in connection with the proposed acquisition of Copano by Kinder Morgan Energy Partners, L.P. The

complaint alleges that certain of the defendants breached or aided and abetted the other defendants' breaches of

their fiduciary duties of loyalty and due care owed to Copano unit holders. The complaint further alleges that, in

an attempt to secure unit holder approval of the Proposed Transaction, the defendants filed a materially false and

misleading Registration Statement on Form S-4 with the U.S. Securities and Exchange Commission in violation of

sections 14(a) and 20(a) of the Exchange Act.

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3/16/13 Barcas LLC is settling a Tulsa County lawsuit alleging that ONEOK Partners, L.P. violated terms of an ill-fated,

$1.8 billion deal to build a crude oil pipeline from the Bakken Shale in the northern Great Plains to the Cushing

storage hub. Barcas filed the lawsuit in September, alleging that its Tulsa counterpart in the joint venture was in

breach of contract, committed possible fraud and unjustly tried to enrich itself. At some point, the lawsuit alleges,

ONEOK Partners "cut Barcas out of the equation" by secretly initiating its own contacts with third-party

customers.

3/12/13 Cameron International Corporation has received an order totaling approximately $600 million for the supply of 47

subsea trees and associated equipment. The deliveries for the equipment, destined for Pre-Salt and Post-Salt areas

offshore Brazil, will commence in 2014.

3/8/13 Williams Partners L.P. (NYSE:WPZ), an energy infrastructure company, focuses on connecting North America’s

hydrocarbon resource plays to growing markets for natural gas, announced the closing a private placement of

3,000,000 common shares at a price of $47.66 per share for gross proceeds of $142,980,000.

3/7/13 Global Partners LP has entered into an agreement with OsComp Systems Inc. to provide compressed natural gas

(CNG) via truck to commercial, industrial and municipal customers in New England. The agreement combines

Global's unique capabilities as a leader in the supply, marketing and distribution of energy products with the

technology expertise of OsComp. OsComp's proprietary compression technology is designed to dramatically

reduce the energy required to compress and transport natural gas, enabling the efficient, cost-effective delivery of

the product to power plants, hospitals, businesses and other large energy users that are not directly connected to

the natural gas transmission and distribution grid. Pending regulatory approval, the first compressor stations are

planned for the summer of 2013.

3/6/13 Williams Companies, Inc. and Boardwalk Pipeline Partners, LP announced that they have executed a letter of

intent to form a joint venture that would develop a pipeline project to transport natural gas liquids from the

infrastructure-constrained Marcellus and Utica shale plays to the rapidly expanding petrochemical and export

complex on the U.S. Gulf Coast, as well as the developing petrochemical market in the Northeast U.S. The

proposed "Bluegrass Pipeline" design would provide producers with 200,000 barrels per day of mixed NGLs take-

away capacity in Ohio, West Virginia and Pennsylvania. Williams and Boardwalk expect to sanction the project

this year and place the planned project into service in the second half of 2015 assuming all necessary conditions are

met.

3/6/13 Oiltanking Partners, L.P. (the "Partnership"), engaged in independent storage and transportation of crude oil,

refined petroleum products and liquefied petroleum gas, announced an expansion of its relationship with

Enterprise Products Partners, L.P. ("Enterprise") and plans to significantly increase its ability to import/export

liquefied petroleum gas ("LPG") at its terminal on the Houston Ship Channel through a $44 million expansion

project (4Q2014 expected completion). Per a mutual-exclusivity agreement, Oiltanking will provide, and

Enterprise will use, vessel-based LPG import and export services on the Houston Ship Channel.

3/5/13 Williams Partners L.P. (NYSE:WPZ) announced a private placement of 3,000,000 common shares at a price of

$47.66 per share for gross proceeds of $142,980,000. The transaction will include participation from Williams

Companies, Inc.

2/25/13 Key Energy Services Inc. has completed a Fixed-Income Offering in the amount of $200.0 million (6.750%, matures

2021).

2/21/13 Kinder Morgan Energy Partners, L.P. completed Fixed-Income Offerings of (i) $398.09 million (5.00% coupon;

maturing 2043) and (ii) $598.38 million (3.50% maturing 2023)

2/15/13 Enbridge Inc., Energy Transfer Partners LP and Energy Transfer Equity, L.P. announced that they have entered

into an agreement for the joint development of a project to provide crude oil pipeline access to the eastern Gulf

Coast refinery market from the Patoka, Illinois hub. The project will involve the conversion from natural gas

service to crude oil service of certain segments of pipeline that are currently in operation as part of the natural gas

system of Trunkline Gas Company, LLC and Energy Transfer Equity, L.P. The converted 30-inch diameter crude

oil pipeline is expected to be in service by 2015. It will have capacity of up to 420,000 to 660,000 barrels per day

depending on crude slate and the level of subscriptions received in an open season to be conducted in the near

future. Enbridge and Energy Transfer would each own 50% of the joint venture entity.

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2/14/13 Gulfmark Offshore, Inc. has completed a Fixed-Income Offering in the amount of $500.0 million (6.375%, maturing

2022).

2/14/13 Global Partners LP (NYSE:GLP) announced a private placement of unsecured 8% senior notes due 2018 for gross

proceeds of $70,000,000 with new lender FS Energy and Power Fund; net proceeds are $67.9 million. Notes mature

February 14, 2018. Interest on the notes will accrue from February 14, 2013. Interest will be paid on the notes semi-

annually on February 14 and August 14 of each year, beginning on August 14, 2013.

2/12/13 Martin Midstream Partners LP and Martin Midstream Finance Corp. have completed their private placement of

$250 million in aggregate principal amount of 7.25% senior unsecured notes due February 15, 2021. Martin

Midstream Partners and Martin Midstream Finance have priced their private placement of $250 million in

aggregate principal amount of 7.25% senior unsecured notes due 2021 at an issue price of par.

2/11/13 Kinder Morgan Energy Partners, L.P. has entered into new and extended long-term transportation and storage

agreements with Calpine Energy Services, L.P. Under the agreements, KMP will provide up to 450,000 dekatherms

per day (dth/d) of firm transportation service as well as 5 billion cubic feet (bcf) of storage capacity to serve nine of

Calpine's electric generation facilities in Texas. The service level under these new agreements represents an

increase of 150,000 dth/d of transport and one bcf of storage over agreements previously in place. KMP will invest

approximately $30 million to expand its Texas intrastate pipeline system in South Texas to extend service to

Calpine's Magic Valley Generating Station in Hidalgo County.

2/8/13 NRG Energy, Inc. has successfully re-priced its $1.58 billion Term Loan B due 2018. The re-pricing includes a

reduction of spread from 3.0% to 2.5% and a reduction in the LIBOR floor from 1.0% to 0.75%.

2/7/13 MDU Resources Group Inc. and Calumet Specialty Products Partners LP announced that they have formed a joint

venture to develop, build and operate a diesel refinery in southwestern North Dakota. The joint venture will be

called Dakota Prairie Refining, LLC. The facility will process 20,000 barrels per day of Bakken crude oil.

Construction could begin this Spring, and is expected to take up to 20 months. The plant will be located on a 318-

acre site located west of Dickinson in Stark County, N.D. It will employ approximately 100 people. Hiring and

training of operating personnel is expected to begin in 2013.

2/5/13 Sulzer Pumps Ltd. and FMC Technologies, Inc. strengthened their existing relationship through the signing of a

long-term and exclusive collaboration agreement addressing the supply of pumps for subsea applications and the

further development of pumping technology of Sulzer Pumps to meet the future needs of FMC Technologies and

the subsea exploration and production industry.

2/3/13 A federal judge has ruled on all counts in favor of Kinder Morgan Energy Partners, L.P. that the city sued for

roughly $250 million over its pollution cleanup efforts beneath 166-acre Qualcomm Stadium site. U.S. District

Court Judge Michael Anello rejected the city's expert testimony as "unreliable and irrelevant" and that the statute

of limitations had expired for some of the allegations. According to the city's lawsuit - filed by former City

Attorney Michael Aguirre - the petroleum products had seeped from the tank farm in a nearly mile-long plume

that fans out beneath the stadium and its parking lot just north of the San Diego River. The plume allegedly

polluted an aquifer that the city would like to tap for drinking water, according to the lawsuit.

1/28/13 LNG Energy Ltd. filed its Annual Report for the period ending Sep 30, 2012. In the report, auditor KPMG LLP,

gave an unqualified opinion expressing doubt that the company can continue as a going concern.

1/23/13 NRG Energy announced an agreement to bring sustainable energy to the new Santa Clara Stadium. Through this

unique partnership, NRG will help the new facility become the first professional football stadium to open with

LEED certification, the recognized standard for measuring building sustainability. NRG will install a number of

state-of-the-art solar elements, including three solar array-covered bridges, a solar canopy above the green roof on

the suite tower portion of the stadium and solar panels over the 49ers training center.

1/7/13 MarkWest Energy Partners, L.P. has completed a Fixed-Income Offering in the amount of $1000.0 million (4.50%,

maturing 2023).

of 22





Energy: Selected M&A Transactions

Announced

Date Target Buyer

Enterprise

Value

($USD in millions)

Enterprise

Value /

Revenue

Enterprise

Value /

EBITDA

03/23/2013 Blythe Energy, LLC AltaGas Power Holdings (U.S.) Inc.

$515.0 - -

AltaGas Power Holdings (U.S.) Inc. entered into a purchase and sale agreement to acquire Blythe Energy, LLC from LS Power Equity Partners II, L.P. for approximately $520 million. The deal is expected to be financed from a combination of debt and equity including AltaGas’ existing credit facilities, future debt and preferred share financings and a commitment for a new $300 million senior unsecured revolving credit facility from the Toronto-Dominion Bank and the Royal Bank of Canada.

03/11/2013 Dominion Resources Inc., Three Merchant Generation Power Stations

Energy Capital Partners $650.0 - -

Energy Capital Partners signed a purchase and sale agreement to acquire three merchant generation power stations from Dominion Resources, Inc. (NYSE:D) for approximately $650 million. Dominion Resources plans to invest the proceeds in regulated businesses and reduce debt needs. The sale is expected to close in the second quarter of 2013.

03/01/2013 50% In El Paso Natural Gas Company, L.L.C And 50% In El Paso Midstream Investment Company L.L.C.

Kinder Morgan Energy Partners, L.P. (NYSE:KMP)

$1,655.0 - -

Kinder Morgan Energy Partners, L.P. (NYSE:KMP) acquired the remaining 50% stake in both El Paso Natural Gas Company, L.L.C and El Paso Midstream Investment Company L.L.C from El Paso EPNG Investments, L.L.C. and Kinder Morgan, Inc. (NYSE:KMI) for $1.7 billion in cash, stock and assumption of debt. The transaction value included approximately $560 million of proportional debt at El Paso Natural Gas Company.

02/27/2013 Southern Union Gas Services, Ltd.

Regency Energy Partners LP (NYSE:RGP)

$1,576.2 - -

Regency Energy Partners LP (NYSE:RGP) agreed to acquire Southern Union Gas Services, Ltd. from Southern Union Co. for $1.5 billion in cash and units. The consideration to be paid by Regency in connection with this transaction will consist of (i) the issuance of 31.4 million Regency common units to Southern Union, (ii) the issuance of 6.3 million Regency Class F units to Southern Union, (iii) the distribution of $570 million in cash to Southern Union, and (iv) the payment of $30 million in cash to ETC Texas Pipeline LTD.

02/27/2013 Larry's Creek, Seely and Warrensville Gas Gathering Systems

Western Gas Partners LP (NYSE:WES)

$395.6 - -

Western Gas Partners LP (NYSE:WES) agreed to acquire Larry’s Creek, Seely and Warrensville Gas Gathering Systems from Chesapeake Energy Corporation (NYSE:CHK) for approximately $130 million. In a related transaction, Western Gas Partners LP agreed to acquire Liberty and Rome gas gathering systems from Anadarko Petroleum Corporation (NYSE:APC) for total consideration of $490 million. Western Gas Partners will fund the acquisition with borrowings on its revolving credit facility.

02/27/2013 Liberty and Rome Gas Gathering Systems

Western Gas Partners LP (NYSE:WES)

$1,452.2 - -

Western Gas Partners LP (NYSE:WES) agreed to acquire 33.75% interest in Liberty and Rome Gas Gathering Systems from Anadarko Petroleum Corporation (NYSE:APC) for $490 million. In a related transaction, Western Gas Partners also agreed to acquire a 33.75% interest in the Larry’s Creek, Seely and Warrensville gas gathering systems from an affiliate of Chesapeake Energy Corporation.

02/22/2013 IROC Energy Services Corp. (TSXV:ISC)

Western Energy Services Corp. (TSX:WRG)

$127.5 1.3x 4.3x

Western Energy Services Corp. (TSX:WRG) entered into an arrangement to acquire IROC Energy Services Corp. (TSXV:ISC) from Troob Capital Management LLC, EdgePoint Investment Group Inc., Front Street Investment Management Inc. and others for approximately CAD $160 million. Western Energy Services will pay either CAD $3.10/share of IROC in cash or 0.4063 of a common share of Western per share of IROC, or CAD $1.24/share in cash and 0.2438 of a common share of Western per share of IROC. Western Energy will pay CAD $5 million consideration for IROC shareholder stock options and restricted share units.

of 22





Announced

Date Target Buyer

Enterprise

Value

($USD in millions)

Enterprise

Value /

Revenue

Enterprise

Value /

EBITDA

02/22/2013 Plains All American Pipeline, L.P., Non-Core Refined Pipelines in Rocky Mountain and New Mexico Area

Magellan Midstream Partners LP (NYSE:MMP)

$190.0 - -

Magellan Midstream Partners LP (NYSE:MMP) signed a definitive agreement to acquire non-core refined pipelines in Rocky Mountain and New Mexico Areas from Plains All American Pipeline, L.P. (NYSE:PAA) for $190 million in cash. Management expects to fund the acquisition with cash on hand and borrowings under its revolving credit facility. The acquisition is subject to regulatory approvals and satisfaction of customary closing conditions.

02/20/2013 Berry Petroleum Co. (NYSE:BRY)

Linn Energy, LLC (NasdaqGS:LINE)

$6,159.8 6.3x 10.3x

Linn Energy, LLC (NasdaqGS:LINE) entered into a contribution agreement to acquire Berry Petroleum Co. (NYSE:BRY) for $4.3 billion in stock plus other considerations. The combined company will be headquartered in Houston, Texas. The combined company will retain the LINN Energy name which will be headquartered in Houston, Texas and will be led by Mark Ellis.

02/20/2013 Berry Petroleum Co. (NYSE:BRY)

Linn Co, LLC (NasdaqGS:LNCO) $4,631.7 4.8x 7.8x

Linn Co, LLC (NasdaqGS:LNCO) signed definitive agreement to acquire Berry Petroleum Co. (NYSE:BRY) from Winberta Holdings, Ltd. and other shareholders for $2.6 billion in stock plus assumption of debt. Under the terms of the agreement, LinnCo has agreed to issue 1.25 common shares for each common share of Berry outstanding prior to the merger. Linn Energy, LLC and Linn Co, LLC will also acquire outstanding options and restricted stock unit of Berry Petroleum.

01/30/2013 Pasco Cogeneration Limited And Auburndale Power Partners, Limited Partnership And Lake Cogen Ltd.

Quantum Utility Generation LLC $136.0 - -

Quantum Utility Generation, LLC and certain of its affiliates entered into a definitive agreement to acquire Pasco Cogeneration Limited, Auburndale Power Partners, Limited Partnership and Lake Cogen Ltd. from Atlantic Power Corporation (TSX:ATP) for approximately $140 million. The deal value includes working capital adjustments. Atlantic Power expects to receive net cash proceeds of approximately $111 million in the aggregate, after repayment of project-level debt at Auburndale and settlement of all outstanding natural gas swap agreements at Lake and Auburndale.

01/29/2013 Copano Energy LLC (NasdaqGS:CPNO)

Kinder Morgan Energy Partners, L.P. (NYSE:KMP)

$4,464.3 3.2x -

Kinder Morgan Energy Partners, L.P. (NYSE:KMP) entered into a definitive agreement to acquire Copano Energy LLC (NasdaqGS:CPNO) from TPG Capital, L.P. and other sellers for $3.2 billion. Kinder Morgan Energy has also assumed debt of Copano Energy LLC. The exchange ratio is 0.4563 Kinder Morgan shares for every single share and restricted unit of Copano.

01/09/2013 Meadowlark Midstream Company, LLC

Summit Midstream Partners, LP (NYSE:SMLP)

$513.0 - -

Summit Midstream Partners, LP (NYSE:SMLP) signed a definitive agreement to acquire Bear Tracker Energy, LLC from GSO Capital Opportunities, L.P. for approximately $510 million.

01/08/2013 SemCrude Pipeline, L.L.C.

Rose Rock Midstream, L.P. (NYSE:RRMS)

$834.4 - -

Rose Rock Midstream, L.P. (NYSE:RRMS) agreed to acquire a 33.3% interest in SemCrude Pipeline, L.L.C. from SemGroup Corporation (NYSE:SEMG) for approximately $270 million. Following the acquisition, Rose Rock Midstream will effectively own 17% of White Cliffs Pipeline.

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

of 22





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 $46.41 $50.97 $37.08 11.2% $20,505.5 $24,605.5 1.2x 10.9x 6.4x

BAS Basic Energy Services, Inc. $13.67 $18.25 $8.52 (24.0%) $543.2 $1,291.8 0.9x 11.6x 4.3x

DVR Cal Dive International Inc $1.80 $4.00 $1.00 (45.6%) $176.2 $302.2 NM NM NM

CAM Cameron International Corporation $65.20 $67.42 $38.38 21.7% $16,160.1 $16,533.5 1.9x 15.6x 12.6x

CRR CARBO Ceramics Inc. $91.07 $106.51 $60.33 (12.8%) $2,107.1 $2,016.5 3.1x 12.7x 9.9x

DWSN Dawson Geophysical Company $30.00 $34.69 $20.20 (12.2%) $235.4 $216.1 0.7x 11.6x 4.1x

DRC Dresser-Rand Group Inc. $61.66 $63.41 $41.01 27.0% $4,690.2 $5,621.9 2.1x 16.6x 13.2x

DRQ Dril-Quip, Inc. (1) $87.17 $88.12 $57.27 27.9% $3,531.9 $3,274.7 4.5x 20.3x 17.4x

EXH Exterran Holdings, Inc. $27.00 $27.40 $10.58 101.5% $1,698.9 $3,462.8 1.2x 21.8x 6.8x

FTI FMC Technologies, Inc. (1) $54.39 $54.52 $36.89 7.6% $12,916.5 $14,231.5 2.3x 22.0x 17.9x

GEOK.Q Geokinetics Inc. $0.02 $1.95 $0.01 (99.1%) $0.3 $478.7 0.8x NM 4.3x

GIFI Westinghouse Solar, Inc. $21.06 $31.69 $19.89 (27.9%) $304.5 $279.6 0.5x NM 16.0x

GLF Gulfmark Offshore, Inc. $38.96 $49.50 $27.17 (16.0%) $1,037.3 $1,353.1 3.5x 31.2x 13.1x

HAL Halliburton Company $40.41 $43.96 $26.28 20.3% $37,654.6 $39,745.6 1.4x 8.9x 6.5x

HLX Helix Energy Solutions Group, Inc. $22.88 $25.49 $14.90 26.6% $2,422.6 $3,031.3 3.6x 22.6x 13.8x

HOS Hornbeck Offshore Services, Inc. $46.46 $46.75 $31.68 7.4% $1,648.6 $2,161.3 4.2x 17.9x 10.3x

IO ION Geophysical Corporation $6.81 $7.87 $5.29 8.3% $1,065.0 $1,139.0 2.2x 14.1x 6.1x

KEG Key Energy Services Inc. $8.08 $16.06 $5.70 (48.0%) $1,230.8 $2,066.8 1.1x 10.0x 4.9x

LUFK Lufkin Industries Inc. $66.39 $82.82 $45.11 (19.3%) $2,238.3 $2,492.7 1.9x 16.4x 12.8x

MTRX Matrix Service Company $14.90 $17.21 $9.62 8.3% $387.7 $357.9 0.4x 11.7x 8.5x

NBR Nabors Industries Ltd. $16.22 $18.24 $12.40 (5.6%) $4,720.6 $8,403.5 1.2x 13.6x 5.0x

NOV National Oilwell Varco, Inc. $70.75 $89.95 $59.07 (12.3%) $30,184.8 $30,131.8 1.5x 8.3x 7.1x

NGS Natural Gas Services Group Inc. $19.26 $19.45 $11.37 46.8% $237.5 $210.3 2.2x 10.4x 5.9x

NR Newpark Resources Inc. $9.28 $9.69 $5.19 13.4% $794.9 $1,007.4 1.0x 9.5x 7.3x

NOF Northern Offshore Ltd $0.00 $2.30 $1.53 (100.0%) $275.3 $271.4 1.6x 14.6x 5.3x

OIS Oil States International Inc. $81.57 $87.63 $60.03 1.4% $4,476.0 $5,534.5 1.3x 8.1x 6.0x

RES RPC Inc. $15.17 $17.40 $8.75 47.4% $3,347.0 $3,439.8 1.8x 7.7x 5.2x

SLB Schlumberger Limited $74.89 $82.00 $59.12 7.4% $99,679.7 $105,140.7 2.5x 13.7x 9.4x

SPN Superior Energy Services, Inc. $25.97 $28.21 $17.54 (4.7%) $4,141.4 $5,901.0 1.3x 8.0x 4.7x

TESO Tesco Corporation $13.39 $16.88 $8.70 (7.3%) $521.3 $495.6 0.9x 7.7x 4.5x

TTI TETRA Technologies, Inc. $10.26 $10.74 $5.35 5.6% $802.3 $1,137.2 1.3x 29.5x 10.0x

WG Willbros Group Inc. $9.82 $9.96 $3.22 155.1% $481.8 $733.3 0.4x 25.1x 9.6x

High 4.2x 31.2x 16.0x

Low 0.4x 7.7x 4.1x

Mean 1.6x 14.4x 8.1x

Median 1.3x 12.7x 6.8x

52 - Week Enterprise Value to (3):

of 22






Performance Overview

Notes:


TTM Revenue TTM Financials Margins

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


BHI Baker Hughes Incorporated 12/31/12 7.7% $21,361.0 $2,255.0 $3,823.0 18.8% 10.6% 17.9%

BAS Basic Energy Services, Inc. 12/31/12 10.6% $1,374.9 $111.8 $299.0 34.4% 8.1% 21.7%

DVR Cal Dive International Inc (1) 12/31/12 -3.1% $464.8 -$53.4 $0.1 -0.5% -11.5% 0.0%

CAM Cameron International Corporation 12/31/12 22.2% $8,502.1 $1,061.9 $1,316.6 29.1% 12.5% 15.5%

CRR CARBO Ceramics Inc. 12/31/12 3.2% $645.5 $159.4 $204.3 34.6% 24.7% 31.6%

DWSN Dawson Geophysical Company 12/31/12 -14.0% $303.5 $18.6 $52.4 21.3% 6.1% 17.3%

DRC Dresser-Rand Group Inc. 12/31/12 18.4% $2,736.4 $341.0 $426.5 26.8% 12.5% 15.6%

DRQ Dril-Quip, Inc. 12/31/12 21.9% $733.0 $161.7 $187.9 38.4% 22.1% 25.6%

EXH Exterran Holdings, Inc. 12/31/12 6.6% $2,803.6 $107.0 $457.9 29.8% 3.8% 16.3%

FTI FMC Technologies, Inc. 12/31/12 20.6% $6,151.4 $648.0 $794.2 22.1% 10.5% 12.9%

GEOK.Q Geokinetics Inc. 12/31/12 -22.0% $595.8 -$12.3 $111.6 29.7% -2.1% 18.7%

GIFI Westinghouse Solar, Inc. (1) 12/31/12 69.4% $521.3 -$6.0 $17.4 3.5% -1.1% 3.3%

GLF Gulfmark Offshore, Inc. 12/31/12 1.9% $389.2 $43.4 $103.1 40.5% 11.2% 26.5%

HAL Halliburton Company 12/31/12 14.8% $28,503.0 $4,459.0 $6,087.0 16.6% 15.6% 21.4%

HLX Helix Energy Solutions Group, Inc. 12/31/12 20.5% $846.1 $125.6 $211.6 26.8% 14.8% 25.0%

HOS Hornbeck Offshore Services, Inc. 12/31/12 34.4% $512.7 $121.0 $208.8 50.2% 23.6% 40.7%

IO ION Geophysical Corporation 12/31/12 15.8% $526.3 $80.5 $185.7 41.0% 15.3% 35.3%

KEG Key Energy Services Inc. 12/31/12 13.4% $1,960.1 $206.9 $421.1 33.2% 10.6% 21.5%

LUFK Lufkin Industries Inc. 12/31/12 37.4% $1,281.2 $152.1 $195.4 24.2% 11.9% 15.3%

MTRX Matrix Service Company 12/31/12 19.3% $799.8 $30.5 $42.1 10.4% 3.8% 5.3%

NBR Nabors Industries Ltd. 12/31/12 15.3% $6,989.6 $918.2 $1,976.5 35.9% 13.1% 28.3%

NOV National Oilwell Varco, Inc. 12/31/12 36.7% $20,041.0 $3,557.0 $4,185.0 26.6% 17.7% 20.9%

NGS Natural Gas Services Group Inc. 12/31/12 43.8% $93.7 $20.2 $35.9 46.7% 21.6% 38.3%

NR Newpark Resources Inc. 12/31/12 8.3% $1,038.0 $105.9 $138.7 18.4% 10.2% 13.4%

NOF Northern Offshore Ltd 12/31/12 13.5% $182.8 $19.4 $53.9 33.0% 10.6% 29.5%

OIS Oil States International Inc. 12/31/12 26.8% $4,413.1 $685.9 $916.0 25.4% 15.5% 20.8%

RES RPC Inc. 12/31/12 7.5% $1,945.0 $448.5 $663.4 43.1% 23.1% 34.1%

SLB Schlumberger Limited 12/31/12 14.0% $42,149.0 $7,520.0 $11,020.0 21.6% 17.8% 26.1%

SPN Superior Energy Services, Inc. 12/31/12 132.6% $4,568.1 $735.3 $1,244.6 41.1% 16.1% 27.2%

TESO Tesco Corporation 12/31/12 7.8% $553.1 $64.4 $108.9 21.6% 11.7% 19.7%

TTI TETRA Technologies, Inc. 12/31/12 4.2% $880.8 $38.5 $114.3 28.7% 4.4% 13.0%

WG Willbros Group Inc. (1) 12/31/12 38.2% $2,004.2 $29.3 $76.2 9.9% 1.5% 3.8%

High 50% 25% 41%

Low 10% -2% 5%

Mean 30% 13% 23%

Median 29% 12% 21%

of 22





Oil and Gas Refining and Marketing

Valuation Overview

Notes:







Oil & Gas Marketing & Refining

CLMT Calumet Specialty Products Partners LP $37.25 $40.25 $20.76 40.4% $2,552.7 $3,406.6 0.7x 13.0x 9.6x

CVI CVR Energy, Inc. $51.62 $62.50 $23.54 79.2% $4,482.2 $4,622.2 0.5x 6.1x 5.2x

HFC HollyFrontier Corporation $51.45 $59.20 $28.05 58.2% $10,429.3 $9,970.4 0.5x 3.5x 3.2x

NS NuStar Energy L.P. (1) $53.34 $59.51 $38.43 (10.3%) $4,154.4 $6,593.4 1.1x 32.4x 17.6x

TSO Tesoro Corporation $58.55 $59.90 $20.77 124.3% $8,068.9 $8,505.9 0.3x 5.0x 4.3x

VLO Valero Energy Corporation $45.49 $48.97 $20.00 79.1% $25,206.9 $30,595.9 0.2x 6.0x 5.0x

WNR Western Refining, Inc. $35.41 $39.42 $17.13 77.1% $3,103.1 $3,159.1 0.3x 4.4x 3.9x

CLMT Calumet Specialty Products Partners LP $37.25 $40.25 $20.76 40.4% $2,552.7 $3,406.6 0.7x 13.0x 9.6x

High 0.7x 13.0x 9.6x

Low 0.2x 3.5x 3.2x

Mean 0.5x 7.3x 5.8x

Median 0.5x 6.0x 5.0x




Oil & Gas Marketing & Refining

CLMT Calumet Specialty Products Partners LP 12/31/12 48.6% $4,657.3 $262.2 $353.8 11.0% 5.6% 7.6%

CVI CVR Energy, Inc. 12/31/12 70.4% $8,567.3 $759.3 $889.3 15.7% 8.9% 10.4%

HFC HollyFrontier Corporation 12/31/12 30.1% $20,090.7 $2,884.1 $3,127.0 16.2% 14.4% 15.6%

NS NuStar Energy L.P. 12/31/12 -5.0% $5,955.7 $213.0 $383.6 8.1% 3.6% 6.4%

TSO Tesoro Corporation 12/31/12 8.5% $32,484.0 $1,686.0 $1,993.0 7.5% 5.2% 6.1%

VLO Valero Energy Corporation 12/31/12 10.5% $138,286.0 $5,065.0 $6,180.0 5.3% 3.7% 4.5%

WNR Western Refining, Inc. 12/31/12 4.8% $9,503.1 $710.0 $803.9 9.7% 7.5% 8.5%

CLMT Calumet Specialty Products Partners LP 12/31/12 48.6% $4,657.3 $262.2 $353.8 11.0% 5.6% 7.6%

High 16% 14% 16%

Low 5% 4% 4%

Mean 11% 7% 8%

Median 10% 6% 8%

of 22





Oil and Gas Transportation and Storage

Valuation Overview

Notes:






Energy Oil & Transportation & Storage

ATLS Atlas Energy, L.P (1) $44.04 $44.56 $27.83 26.9% $2,262.4 $5,779.9 3.9x 137.8x 29.8x

BKEP Blueknight Energy Partners, L.P. $8.57 $9.50 $6.08 27.3% $194.3 ($0.9) NM NM NM

BPL Buckeye Partners, L.P. $61.16 $61.45 $44.37 1.4% $6,440.0 $9,521.8 2.2x 23.5x 17.6x

LNG Cheniere Energy, Inc. (1) $28.00 $28.73 $10.51 75.7% $6,036.8 $9,780.2 35.4x NM NM

CPNO Copano Energy LLC $40.52 $40.52 $24.24 12.7% $3,200.9 $4,432.8 3.1x NM NM

XTXI Crosstex Energy Inc. $19.26 $19.51 $11.32 35.8% $916.0 $2,766.8 1.7x 44.2x 13.8x

DPM DCP Midstream Partners LP $46.61 $47.05 $36.47 0.8% $3,449.3 $5,109.5 3.1x 23.6x 18.3x

EPB El Paso Pipeline Partners, L.P. $43.86 $44.19 $30.64 25.0% $9,464.5 $11,413.5 7.5x 12.9x 10.7x

EEP Enbridge Energy Partners LP $30.14 $31.43 $26.88 (4.0%) $9,139.4 $16,350.7 2.4x 22.5x 15.2x

ETE Energy Transfer Equity, L.P. $58.48 $59.08 $34.00 40.8% $16,372.2 $52,694.2 3.1x 33.5x 21.6x

EPD Enterprise Products Partners L.P. $60.29 $60.34 $45.67 17.7% $53,954.7 $70,421.7 1.7x 22.2x 16.5x

GEL Genesis Energy LP (1) $48.22 $49.34 $26.70 55.5% $3,915.6 $4,755.2 1.2x 37.1x 25.7x

GLP Global Partners LP $35.85 $38.45 $20.01 52.7% $979.1 $1,832.6 0.1x 20.7x 13.7x

NRGY Inergy, L.P. $20.43 $21.99 $15.22 24.6% $2,691.5 $3,976.3 2.2x 38.9x 15.3x

KMP Kinder Morgan Energy Partners, L.P. $89.77 $89.89 $74.15 7.1% $34,188.2 $54,151.2 6.3x 20.2x 14.3x

MMP Magellan Midstream Partners LP $53.43 $53.91 $33.31 47.9% $12,111.5 $14,176.6 8.0x 25.7x 20.8x

MWE MarkWest Energy Partners, L.P. $60.75 $61.97 $45.36 2.6% $7,845.0 $10,348.4 7.4x 27.7x 16.8x

MMLP Martin Midstream Partners LP $38.52 $39.13 $29.46 10.7% $1,025.6 $1,507.1 1.0x 20.5x 13.0x

NS NuStar Energy L.P. (1) $53.34 $59.51 $38.43 (10.3%) $4,154.4 $6,593.4 1.1x 32.4x 17.6x

OKS ONEOK Partners, L.P. $57.40 $61.34 $50.45 3.3% $12,617.4 $17,048.9 1.7x 15.8x 13.3x

PAA Plains All American Pipeline, L.P. $56.48 $57.17 $37.59 42.0% $18,985.9 $27,187.9 0.7x 16.5x 13.8x

RGP Regency Energy Partners LP $25.08 $25.66 $20.58 2.7% $4,287.5 $6,873.5 5.2x 41.9x 19.9x

SE Spectra Energy Corp. $30.75 $31.79 $26.55 (2.0%) $20,576.6 $34,427.6 6.8x 17.6x 12.7x

SXL Sunoco Logistics Partners L.P. $65.40 $68.44 $31.65 73.4% $6,788.3 $9,537.3 0.7x 15.2x 12.5x

TCP TC PipeLines, LP $48.49 $49.13 $38.20 8.2% $2,592.9 $3,304.9 17.0x 20.7x 19.3x

TLP Transmontaigne Partners L.P. $50.74 $50.77 $29.89 45.2% $733.6 $967.0 6.2x 22.9x 13.7x

WMB Williams Companies, Inc. $37.46 $38.00 $27.25 19.1% $25,530.2 $38,633.2 5.2x 22.0x 15.4x

WPZ Williams Partners L.P. $51.80 $58.26 $45.01 (8.0%) $21,352.6 $29,783.6 4.1x 17.8x 12.5x

High 17.0x 44.2x 21.6x

Low 0.1x 12.9x 10.7x

Mean 4.2x 23.9x 15.5x

Median 3.1x 22.1x 14.8x


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Oil and Gas Transportation and Storage


Notes:




Energy Oil & Transportation & Storage

ATLS Atlas Energy, L.P 12/31/12 -5.3% $1,476.1 $35.6 $187.7 21.5% 2.4% 12.7%

BKEP Blueknight Energy Partners, L.P. 12/31/12 3.2% $182.4 $38.3 $61.4 31.8% 21.0% 33.7%

BPL Buckeye Partners, L.P. 12/31/12 -8.5% $4,357.2 $399.2 $534.6 14.9% 9.2% 12.3%

LNG Cheniere Energy, Inc. (1) 12/31/12 -7.6% $267.4 -$75.8 -$9.4 51.5% -27.5% -3.4%

CPNO Copano Energy LLC 12/31/12 5.4% $1,367.5 $74.0 $151.1 14.8% 5.2% 10.7%

XTXI Crosstex Energy Inc. 12/31/12 -17.8% $1,655.9 $59.4 $196.8 23.8% 3.6% 11.9%

DPM DCP Midstream Partners LP 12/31/12 -29.8% $1,650.9 $187.3 $250.7 14.5% 11.3% 15.2%

EPB El Paso Pipeline Partners, L.P. 12/31/12 -1.0% $1,515.0 $874.0 $1,055.0 75.4% 57.7% 69.6%

EEP Enbridge Energy Partners LP 12/31/12 -26.4% $6,706.1 $727.5 $1,072.3 29.6% 10.8% 16.0%

ETE Energy Transfer Equity, L.P. 12/31/12 107.1% $15,515.0 $1,360.0 $2,231.0 16.9% 8.0% 13.2%

EPD Enterprise Products Partners L.P. 12/31/12 -3.9% $42,583.1 $3,108.3 $4,213.2 7.7% 7.3% 9.9%

GEL Genesis Energy LP 12/31/12 31.7% $4,070.1 $113.7 $171.0 5.3% 2.8% 4.2%

GLP Global Partners LP (1) 12/31/12 18.8% $17,626.0 $88.6 $134.0 1.9% 0.5% 0.8%

NRGY Inergy, L.P. 12/31/12 -20.2% $1,059.0 $102.2 $259.4 28.5% 5.8% 14.6%

KMP Kinder Morgan Energy Partners, L.P. 12/31/12 9.5% $8,642.0 $2,340.0 $3,440.0 47.7% 27.1% 39.8%

MMP Magellan Midstream Partners LP 12/31/12 1.3% $1,772.1 $549.1 $677.1 44.4% 31.0% 38.2%

MWE MarkWest Energy Partners, L.P. 12/31/12 -9.1% $1,395.2 $372.9 $616.4 62.0% 26.7% 44.2%

MMLP Martin Midstream Partners LP 12/31/12 19.9% $1,490.4 $74.6 $116.7 9.5% 5.0% 7.8%

NS NuStar Energy L.P. 12/31/12 -5.0% $5,955.7 $213.0 $383.6 8.1% 3.6% 6.4%

OKS ONEOK Partners, L.P. 12/31/12 -10.1% $10,182.2 $956.2 $1,159.3 16.1% 9.4% 11.4%

PAA Plains All American Pipeline, L.P. 12/31/12 10.3% $37,797.0 $1,607.0 $1,927.0 6.0% 4.3% 5.1%

RGP Regency Energy Partners LP 12/31/12 -8.6% $1,271.0 $50.0 $232.0 21.9% 3.8% 17.5%

SE Spectra Energy Corp. 12/31/12 -5.2% $4,916.0 $1,573.0 $2,319.0 53.1% 31.0% 45.7%

SXL Sunoco Logistics Partners L.P. 12/31/12 20.2% $13,110.0 $607.0 $746.0 6.6% 4.6% 5.7%

TCP TC PipeLines, LP 12/31/12 -13.4% $65.0 $160.0 $171.0 91.2% 82.5% 88.1%

TLP Transmontaigne Partners L.P. 12/31/12 2.6% $156.2 $41.6 $69.8 58.6% 26.6% 44.7%

WMB Williams Companies, Inc. 12/31/12 -5.6% $7,486.0 $1,648.0 $2,404.0 39.6% 22.0% 32.1%

WPZ Williams Partners L.P. 12/31/12 -5.1% $7,320.0 $1,559.0 $2,273.0 38.3% 21.3% 31.1%

High 91% 82% 88%

Low 5% 2% 4%

Mean 30% 17% 25%

Median 23% 9% 15%

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Independent Power Producers (IPPs)/Merchant Generators

Valuation Overview

Notes:





Notes:




IPP & Merchant Generators

ATP Atlantic Power Corporation $4.92 $14.87 $4.56 (64.2%) $587.5 $3,048.2 7.4x NM 20.8x

CPN Calpine Corp. $20.60 $20.62 $15.90 17.4% $9,382.4 $19,110.4 3.5x 24.5x 13.8x

DYN Dynegy Inc. $23.99 $24.10 $17.00 NM $2,399.0 $3,466.0 2.7x NM NM

NRG NRG Energy, Inc. $26.49 $26.51 $14.29 70.9% $8,561.4 $23,264.4 2.8x 45.3x 14.1x

AES The AES Corporation $12.57 $13.25 $9.52 (5.1%) $9,374.3 $31,159.3 1.7x 8.8x 6.3x

High 7.4x 45.3x 20.8x

Low 1.7x 8.8x 6.3x

Mean 3.6x 26.2x 13.7x

Median 2.8x 24.5x 14.0x




IPP & Merchant Generators

ATP Atlantic Power Corporation 12/31/12 344.5% $371.9 -$22.8 $134.4 29.6% -5.5% 32.2%

CPN Calpine Corp. 12/31/12 -19.7% $5,417.0 $752.0 $1,357.0 27.3% 13.8% 25.0%

DYN Dynegy Inc. (1) 12/31/12 -3.0% $1,293.0 -$931.0 -$648.0 10.4% -72.0% -50.1%

NRG NRG Energy, Inc. 12/31/12 -7.2% $8,422.0 $477.0 $1,612.0 27.7% 5.7% 19.1%

AES The AES Corporation 12/31/12 7.2% $18,141.0 $3,508.0 $4,899.0 21.0% 19.3% 27.0%

High 30% 30% 32%

Low 21% -5% -5%

Mean 26% 15% 21%

Median 28% 17% 26%

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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:

Edward R. Casas, Senior Managing Director, Head of Navigant Capital Advisors

847.583.1619

[email protected]

Kim Brady, Managing Director, Navigant Capital Advisors

847.583.1718

[email protected]

Laurie Oppel, Managing Director, Energy Practice

202.481.7534

[email protected]

To view all of Quarterly Dialogues or to make changes to your subscription(s), please go to

www.ncacf.com/dialogues.

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 22





Navigant: Representative Engagements

of 22





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.

quarterly dialogue third quarter 2010...

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