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Private Equity Valuation of Oilfield Services

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									                   Private & Confidential

 Investment Banking Capabilities

PPHB Firm Overview
January 2010
Background                                                                                                     Private & Confidential

             Parks Paton Hoepfl & Brown (“PPHB”) is an independent investment banking firm providing financial advisory
             services exclusively to clients in the energy service industry.

                                              All of our Partners began their careers with oilfield service companies Each of
                                              the Partners transitioned into investment banking and average over 20 years of
         Industry Expertise
                                              industry operating and investment banking experience, with all investment
                                              banking experience exclusively focused in the energy sector.

                                              At PPHB and prior firms, our Partners have represented more than 100 oilfield
                                              service clients. Transactions have included buy-side and sell-side advisory for
         Execution Strength
                                              mergers & acquisitions, raising public and private equity and debt, senior debt
                                              syndications, and fairness opinions.

                                              Since inception in 2003, PPHB has completed and has pending 66 transactions
                                              with values in excess of $3.5 billion. At predecessor firms, our Partners
         Transaction History
                                              completed 149 transactions worth $29.0 billion.

                                              At PPHB, each transaction is executed by Partners at the firm. We combine our
                                              industry experience and execution strength with our industry relationships to
         Our Advantage                        provide our clients with a proven and likely unmatched investment banking
                                              partner – committed to the success of each transaction.

    Services & Statistics                                                                                                                            Private & Confidential

                      Corporate Finance                                                                   PPHB Aggregate Completed Transactions
Whether you are
a private
                            Private Equity / Equity Raise                                            70                                                         66      $4.0 
company (family

or institutionally                                                                                                                                                      $3.5 
                                                                                                                                                                        $3 5

                                                                            e # of Completed Dea
                            Senior Debt                                                                                                      53

                                                                                                                                                                                      EV (US$ in billions)
owned) or an                                                                                                                                                            $3.0 
                            Subordinated / Mezzanine Debt                                                                             42                                $2.5 
publicly traded                                                                                      40
corporation,                                                                                                                   33                                       $2.0 
PPHB provides                                                                                        30


                                                                                                                                                                                Total E
th personal and
the           l d     Financial Advisory                                                             20
senior level                                                                                                           14                                               $1.0 
financial advice to         Mergers and Acquisitions                                                 10                                                                 $0.5 
help you
                                                                                                      0                                                                 $‐
successfully                Divestitures
                                                                                                           2003       2004    2005   2006   2007     2008    2009
execute your
investment                  Leveraged Buyouts
banking                                                                                                                      PPHB Transactions
transaction.                Fairness Opinions
                                                                                                                      4%                           Merger / Acquisition
Since inception,            Valuations                                                                           5%
PPHB has
completed 66                Initial Public Offering Advisory
                            I i i l P bli Off i Ad i
transactions with                                                                                    19%                                           Recapitalization / Equity
a total value over          Financial Modelling                                                                                                    Raise
$3.5 billion.
                            Due Diligence
                                                                                                                                                   Debt Raise


                                                                                                                                                   Fairness Opinion /
                                                                                                                                                   Valuation Analysis

   Recent Financial Advisory Transactions                                                                           Private & Confidential

The following are
selected                                                                                                                $55,000,000
transactions that
were recently
completed by
                    has been acquired by   has been acquired by                              has been acquired by   has been acquired by
                                                                      has been acquired by

                                                                        An Undisclosed

                                               $65,000,000                 $95,200,000           $140,000,000
                                                                                                 $140 000 000           $665,000,000

                                            has sold 56 single
                                            engine aircraft and
                    has been acquired by    related assets and
                                                                                                                          has been
                                                inventory to
                                                                            has been               has been                  i db
                                                                                                                         acquired by
                                                                           acquired by          recapitalized by

                                                                                                                       The Weir Group PLC

                                            Rotorcraft Leasing
                                             Company, LLC

   Recent Financial Advisory Transactions                                                                                    Private & Confidential

The following are
                                                                                 $26,500,000                                     $190 million
transactions that
were recently                                     Southwest
completed by                                      Oilfield Products,
                     has combined with            Inc.
                                              Assets have been
                                                acquired by                   has been acquired           has been
                        with an equity                                               by                  acquired by                Sale to
                       investment from

                           to form
                    Price Gregory Services

                                                  $44,800,000                                                                    $51.0 million

                         has acquired                                                                      has been
                                                                                                      recapitalized by its
                                                                           Noble’s Rotary Steerable      founders and
                                             Tidewater’s Domestic            System Assets have
                                              Towing Division has             been acquired by                                   $51,000,000
                                                                                                                                 $ ,    ,
                      equity financing by      b         i db
                                               been acquired by                                                              Subordinated Notes &
                                                                                                                                Common Units
                    and debt financing by

                                                 Crosby Tugs, Inc.          Diamondback Holdings

   Recent Financial Advisory Transactions                                                                                                 Private & Confidential

The following are
                                                                                                                                               $100 million
transactions that    CDX Resources, LLC
were recently                &
                      CDX Services, LLC
completed by                                                                                                                                     Tesco
                    Wholly owned subsidiaries of                                                                                                 Corporation
PPHB                                               Tucker’s Mr. Joseph 200-class
                                                    liftboat has been acquired by
                                                                                              Sale to
                                                                                                                 Has Issued Convertible       Term Acquisition
                                                                                                                   Preferred Stock to     Financing and Revolving
                           have been                                                                                                           Credit Facility
                          acquired by
                                                                                                                                            Fully underwritten by
                       An Undisclosed
                     Private Equity Buyer

                           $33.5 million                                                     $22,000,000
                                                                                             $                                                  $50,000,000

                                                     Swan Oilfield &
                                                     Drilling Services
                                                                                                                                          Halliburton’s Nigerian
                           Has been                         has been                                                     Sale to          Liftboat business has
                        Recapitalized by                 recapitalized by                                                                   been acquired by
                                                                                                                                            b          i db
                                                                                        has sold two 2,000 HP
                                                                                         land drilling rigs to

                                                                                         Viking Drilling, LLC

   Recent Financial Advisory Transactions                                                                                                                 Private & Confidential

The following are
transactions that                                                                                                                                                 $60 million
were recently                                              Tesco                                    Tesco
completed by                                               Corporation                              Corporation
                                               has acquired the assets and
                                                                                            has acquired the assets and   Sale of Novatek’s Interest to
                                                      business of
                                                                                                   business of                   Grant Prideco
                      Assets have been
                        acquired by                                                                                                                         Sale of the Well Servicing
                                                                                                                                                              Products Division to
                                               A partnership owned by Superior Energy
                                                   Services and other shareholders
                                                                                                                                                             Hushang Ansary

                                                                                                   $139 million                                                   $23.9 million

                          Lewis Energy

                                                                                               AXXIS DRILLING
                    Sale of Certain Drilling                                                                                    Acquisition of                      Land Rigs
                          Assets to                     has been
                                                     recapitalized by                        has been acquired by
                                                                                                                                                                     Sale to

                                                                                                                                                              Arabian Drilling

Recent Financial Advisory Transactions                                                                                                    Private & Confidential

                                                                                                                 $86.7 million                   $28 million

                     Has Sold Its                                            Rotary Steerable Tools                        Drilling
                 Odessa, Texas Assets
                   and Operations                                                A portfolio company of
   Sale to                To                       Sale to                                                                                         Sale to
                                                                                Shell Technology Ventures
                                                                                                             Initial Public Offering of
Undisclosed          Enersource               Reata Energy                          Sale to
                                                                                                                  Common Stock
  Buyer          Compression Systems,        Services, L.L.C.

                                                 C$33 Million                     $13 million                                                    $11 million
 The assets of
                                              Corlac Equipment
                                                                                    TORP Technology, AS
                                            wholly owned subsidiary of
                                                                                  a subsidiary of
                                                                                                                  has been
                                                                                                               recapitalized by               Preferred Equity
    Sale to                                                                                                                                  $30 million committed
                                                                              a portfolio company of
                  Strategic analysis and
                    valuation report in
                 connection with a wholly           Sale to
                    owned subsidiary                                           Common Equity
                                                                                                            The Stephens Group, LLC

 Recent Financial Advisory Transactions                                                                                              Private & Confidential

   $49.5 million              $10 million                $30 million                   Assets of

                                                                                                           Elk Hill Drilling, Inc.
                                                                                                                and assets of
portfolio company of
                                                                                an operating division of
                       Senior Subordinated          Senior Term Loan and
                         Secured Notes                    Revolver               Beldon & Blake
                                                        Underwritten by                                                                Recapitalized by
      Sale to                                                                           Sale to                    Sale to

                                                                               Arvilla Oilfield Services               Bronco
                                                                               Arrow Energy Services                   Drilling
     Grey Wolf

                        Majority of Assets of                                       $18.9 million
 Michigan Division
                       Union Drilling Canada          An undisclosed
     Assets of                                                                                               portfolio company of
                       wholly owned subsidiary of
                                                    Oilfield Rental Tool
                                                                                                               Acquisition of
                                                           Sale to                Acquisition of
       Sale to
                               Sale to                                                                                                  Valuation report in
                                                                                                                                     connection with a private
 Arrow Energy                                                                                                 portfolio company of
                                                                                                                                          equity offering

Partner Bios                                                                                                                Private & Confidential

W. Allen Parks

Mr. Parks founded Parks Paton Hoepfl & Brown to provide financial advisory expertise to the oilfield services sector. He previously led the
                                                                                      Wessels.           that, Mr.
oil field services investment banking efforts at CIBC World Markets and Dain Rauscher Wessels Before that Mr Parks spent 16 years with
Dual Drilling Company starting out as a roughneck and rising through the positions of drilling engineer, operations manager and finally
Executive Vice President and Chief Financial Officer. Mr. Parks has participated in a variety of transactions with a number of public and
private oilfield services companies. Mr. Parks received both a B. S. degree in Chemical Engineering (1976) and an MBA degree (1978)
from The University of Texas and attended the Advanced Management Program at Harvard in 1990. Mr. Parks serves on the Board and as
Treasurer of the National Ocean Industries Association and is a member of the SPE.

Len Paton

Mr. Paton is Managing Partner of Parks Paton Hoepfl & Brown. He joined the firm in 2003 after 18 years of banking experience at Chase
Securities, the investment banking unit of Chase Manhattan Bank, and Growth Capital Partners. At both Chase and GCP, Mr. Paton was a
Managing Director heading a unit with worldwide responsibility for the firms’ relationships with oilfield service clients. Prior to joining Chase,
Mr. Paton worked eleven years with the Petroleum Equipment Group of FMC Corporation. For six of those eleven years he lived in Europe
                                                                                Sea,                            markets.
and during that time managed FMC’s Wellhead Operations serving the North Sea Middle East and African markets His career serving the
energy industry now totals 31 years. Mr. Paton serves on the Executive Board of the SMU School of Engineering. He also serves on the
Executive Board of the National Ocean Industries Association. He received an MBA from the University of Texas at Austin and an
undergraduate degree in Civil Engineering from Southern Methodist University.

Joe Hoepfl

Mr. Hoepfl founded Parks Paton Hoepfl & Brown to provide financial advisory expertise to the energy industry. He previously was a Director
in CIBC World Markets’ Investment Banking Group providing financial advisory services to the oilfield service, midstream and exploration &
production sectors of the energy industry. Prior to joining CIBC World Markets, Mr. Hoepfl was an Associate in the oilfield services
investment banking group at Raymond James & Associates. He also spent several years in the energy industry performing various financial
advisory services at Apache Corporation and Pool Energy Services Co. Mr. Hoepfl has completed numerous equity and debt offerings,
mergers and acquisitions and financial advisory assignments. He received his BBA in Accounting from Texas A&M University and MBA
          University.                          Public Accountant.
from Rice Uni ersit He is a licensed Certified P blic Acco ntant

Partner Bios                                                                                                           Private & Confidential

Ray Brown

Mr. Brown is partner with Parks Paton Hoepfl & Brown. Prior to joining the firm, Mr. Brown was a Senior Vice President with Growth Capital
Partners where for four years he managed merger and acquisition and private equity transactions primarily focused in oil field services and
manufacturing. Prior to GCP, Mr. Brown spent nine years with Halliburton Company in various capacities and divisions. Prior to his
departure, Mr. Brown was a Director of Business Development for Halliburton Energy Development; a group within Halliburton that provided
development capital to oil and gas companies. Mr. Brown joined Brown & Root, a Halliburton company, in 1990, entering the company in a
development program designed to fast track the training of management. During this period he worked in each of the company's operating
                                                            p y         gy
divisions. Afterwards, he focused his efforts in the company's energy services businesses. Mr. Brown obtained a degree in Civilg
Engineering from the University of Mississippi in 1986 and received an MBA at Southern Methodist University in 1990. Mr. Brown is also a
registered professional engineer.

Allen Brooks

       j    g                                                  g                                                                   y
Since joining PPHB, Mr. Brooks has re-established his Musings from the Oil Patch newsletter that he published for the past six years. In
addition, Mr. Brooks provides proprietary industry research to the partners of the firm. Prior to joining PPHB, Mr. Brooks spent eight years
heading the oilfield service equity research team at CIBC World Markets. Prior to that Mr. Brooks was affiliated with the New Orleans-based
energy research firm, Howard, Weil, Labouisse, Freidrichs, Inc. Mr. Brooks was also a member of the senior management team of Ensco
International in the early 1990s.

                                                              y,                  y ,                         g     ,
Mr. Brooks has been involved with the oilfield service industry, either as an analyst, a consultant or in management, since 1971. He started
his investment career in 1969. An Economics graduate of the University of Connecticut, Mr. Brooks also has an M.S. degree in Economics
from Cornell University. He received his Chartered Financial Analyst designation in 1975.


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