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. companies. 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. 2 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 60 als or institutionally $3.5 $3 5 e # of Completed Dea 60 Senior Debt 53 EV (US$ in billions) owned) or an $3.0 50 established Subordinated / Mezzanine Debt 42 $2.5 publicly traded 40 corporation, 33 $2.0 PPHB provides 30 $1.5 Cumulative 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 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 73% Fairness Opinion / Valuation Analysis 3 Recent Financial Advisory Transactions Private & Confidential The following are selected $55,000,000 transactions that were recently completed by PPHB has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by An Undisclosed Buyer $ $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 y has been has been i db acquired by acquired by recapitalized by The Weir Group PLC Rotorcraft Leasing Company, LLC 4 Recent Financial Advisory Transactions Private & Confidential The following are selected $26,500,000 $190 million transactions that were recently Southwest completed by Oilfield Products, has combined with Inc. PPHB 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 and debt financing by Crosby Tugs, Inc. Diamondback Holdings 5 Recent Financial Advisory Transactions Private & Confidential The following are selected $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 6 Recent Financial Advisory Transactions Private & Confidential The following are selected transactions that $60 million were recently Tesco Tesco completed by Corporation Corporation PPHB 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 Ambassador Hushang Ansary $139 million $23.9 million Lewis Energy Group AXXIS DRILLING Sale of Certain Drilling Acquisition of Land Rigs Assets to has been recapitalized by has been acquired by Sale to Arabian Drilling Company 7 Recent Financial Advisory Transactions Private & Confidential $86.7 million $28 million Bronco 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. L.P. 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 8 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 Company Acquisition of Sale to Acquisition of Sale to Sale to Valuation report in connection with a private Arrow Energy portfolio company of equity offering Services 9 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 10 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. 11
"Private Equity Valuation of Oilfield Services"