FracDB: The First US Frac Database A Powerful Tool for Understanding the Market

Houston, Texas November 14, 2011

TERMS & CONDITIONS Information furnished in all reports produced by PacWest may be used by Client for internal purposes, as Client deems beneficial, as long as due care is taken to hold the information confidential within Clients organization and PacWest is not liable for the information provided.

All rights to the information remain with PacWest. PacWest represents that it will not breach any obligation of confidentiality with respect to information contained in the study. PacWest will maintain in confidence and not disclose any information related to Client, without prior written consent of the Client. PacWest will not disclose to any person, including, without limitation, any of the Clients competitors or suppliers, the fact that Client has engaged PacWest in this project scope, the scope of the assignment or any other information relating to Client.

PacWest Consulting Partners 920 Memorial City Dr, Suite 160 Houston, TX 77024

FRACDB CAPABILITIES OVERVIEW

Contents
1. PacWest Snapshot 2. FracDB Capabilities FracDB Overview Pressure Pumper & Customer Relationships Case Study Completions Chemical Market Case Study

3. PacWest Market Intelligence Offerings

Client Confidential

PacWest 2011 | All rights reserved | 2

FRACDB CAPABILITIES OVERVIEW

PacWest is a boutique strategy consultancy and market intelligence firm that specializes in unconventional oil & gas
Firm Overview & Capabilities Consulting & Advisory
Provide strategy consulting and advisory services to Oil & Gas Strength in Oil & Gas supply market - Often work with operator supply chain groups analyzing supply/demand, developing sourcing strategies, building capabilities, etc. With oilfield suppliers, often work at C-Level or business lead

Market Intelligence Products

Offer industry-leading analysis of unconventional market Deep knowledge and strength in the pressure pumping / frac market Employ combination of primary intelligence + secondary research Unique in market: apply strategy consulting capabilities to turn research into actionable intelligence

All key staff come from top-tier strategy firms; consulting and market intelligence capabilities reinforce/inform each other
Client Confidential PacWest 2011 | All rights reserved | 3

FRACDB CAPABILITIES OVERVIEW

A sampling of some of PacWests recent projects demonstrate our depth of experience in North American and international shale
Sample of Recent PacWest Consulting Projects
PacWest Project
Analyzed Bakken & Eagle Ford supply/demand; conducted demand planning exercise to develop new pressure pumping sourcing/contract strategy

Client Outcome
Operator avoided completion delays, avoided significant additional costs

Developed Poland unconventional market entry, product/service, and JV strategy for a potential shale service company for a private equity client
Developed an innovative economic and strategic analysis of operator all-in water management costs over 20-year timeframe, for Bakken & Eagle Ford assets Conducted a study of frac pump market focused on supplier strategic plans, manufacturing capabilities, and supply chain capabilities Conducted study of evolving service company landscape in Poland, including equipment, resources, and expansion plans

PE firm focused on high-growth segments only, with the right strategic partners
Operator understood cost implications, made optimal economic decisions Equipment manufacturer developed optimal strategic investment plans Operator made better informed contract award decision

We have resources in nearly every major unconventional country/region to support international shale needs
Client Confidential PacWest 2011 | All rights reserved | 4

FRACDB CAPABILITIES OVERVIEW

Contents
1. PacWest Snapshot 2. FracDB Capabilities FracDB Overview Pressure Pumper & Customer Relationships Case Study Completions Chemical Market Case Study

3. PacWest Market Intelligence Offerings

Client Confidential

PacWest 2011 | All rights reserved | 5

FRACDB CAPABILITIES OVERVIEW

FracDB is the definitive database of fracs and frac chemicals that can be used to conduct sophisticated market analyses

Product Overview
Database of US fracs and frac chemicals, built into a rich structured data set
- The data set already contains nearly 7,000 fracs conducted in 2011 A sophisticated tool that can be used to run a variety of analyses: - Pressure pumping/frac market share - Completion chemicals market share - Regional frac design practices

Data Elements
Frac date
Well number, API number Operator TVD

Water volume
Pressure Pumper Play Chemical type Chemical ingredient Chemical supplier Contact us for more detail

- And dozens of other analyses

Updated quarterly

FracDB is a powerful tool for the sophisticated market analyst available late 2011
Client Confidential PacWest 2011 | All rights reserved | 6

FRACDB CAPABILITIES OVERVIEW

Contents
1. PacWest Snapshot 2. FracDB Capabilities FracDB Overview Pressure Pumper & Customer Relationships Case Study Completions Chemical Market Case Study

3. PacWest Market Intelligence Offerings

Client Confidential

PacWest 2011 | All rights reserved | 7

FRACDB CAPABILITIES OVERVIEW

PacWests FracDB provides unprecedented insights into the completion chemicals market
Analysis of Pressure Pumper Customer Relationships
The PacWest FracDB is a database of US fracs and frac chemicals, built into a rich, structured data set - The dataset currently contains detailed data from over nearly 7,000 US fracs conducted in 2011 - The FracDB provides a granular view of pressure pumper customer relationships across US plays/basins As an example of the analysis possible with the PacWest FracDB, we have provided a detailed view of pressure pumper customer relationships for one key shale play and one of Baker Hughes key customers

Client Confidential

PacWest 2011 | All rights reserved | 8

FRACDB CAPABILITIES OVERVIEW

BHI has a well-established presence in the Barnett but works primarily with Devon, while HAL and WFT have a broader customer base
Pumper / Customer Relationships in the Barnett (major E&Ps only)
Universal Frac Tech

Operator Chesapeake EOG Devon XTO Pioneer Williams

Pumpco

BHI

HAL

SLB

WFT

Superior

Trican

Pioneer

C&J

ConocoPhillips
Enervest Titan Vantage Range

Major customer Minor customer

Note: Analysis includes data from 637 fracs in the Barnett executed between January 2011 and September 2011 from the PacWest FracDB
Client Confidential PacWest 2011 | All rights reserved | 9

FRACDB CAPABILITIES OVERVIEW

Baker is Devons frac provider of choice, but Devon still uses other pumpers in its other assets
Frac Providers Used by Devon in 2011 (Jan-Sep)
Devons Frac Providers
Play Arkoma Woodford Barnett Eagle Ford Green River Haynesville Permian BHI HAL WFT Comments
Although Baker Hughes has provided the vast majority of Devons fracs in 2011 (92%), Devon has also worked with Halliburton and Weatherford Baker Hughes is creating an opportunity for its competitors to gain a foothold with one of its major customers

Major customer Minor customer

Is Baker Hughes leaving value on the table by opening the door for other pumpers to work with Devon?
Note: Analysis includes data from 274 fracs executed for Devon between January 2011 and September 2011from the PacWest FracDB
Client Confidential PacWest 2011 | All rights reserved | 10

FRACDB CAPABILITIES OVERVIEW

Contents
1. PacWest Snapshot 2. FracDB Capabilities FracDB Overview Pressure Pumper & Customer Relationships Case Study Completions Chemical Market Case Study

3. PacWest Market Intelligence Offerings

Client Confidential

PacWest 2011 | All rights reserved | 11

FRACDB CAPABILITIES OVERVIEW

PacWests FracDB provides unprecedented insights into the completion chemicals market
Completion Chemicals Market Analysis
The PacWest FracDB is a database of US fracs and frac chemicals, built into a rich structured data set - The dataset currently contains detailed data from over nearly 7,000 US fracs conducted in 2011 - The FracDB provides extremely detailed data on types and volumes of chemicals used in the hydraulic fracturing process As an example of the granular detail provided by the PacWest FracDB, we have conducted an initial analysis of the market for biocides used during stimulation in the DJ Basin

Client Confidential

PacWest 2011 | All rights reserved | 12

FRACDB CAPABILITIES OVERVIEW

BHI is the dominant supplier (75%) of biocide in the DJ basin, although it only runs 27% of frac jobs
Frac and Biocide Market Share in the DJ Basin
Fracs vs. Biocide in the DJ Basin (Jan-Sep 2011)
80% 70% 60% 50% 40% 30% 20% 10% 0% Baker Hughes Halliburton
0% 1% 1% 1% 36% 75%

Comments
HAL is the largest frac provider in the DJ Basin, with 28% of the market by number of frac jobs, and 36% of the market by total fluid pumped However, BHI is the dominant supplier of biocide in the DJ Basin, with 75% of the market by weight

Share of Frac Jobs (total = 612) Share of Fluid Pumped (total = 6.9M barrels) Share of Biocide (total = 336K pounds)

Market Share

27%
19%

28% 23% 22% 22% 20% 13% 10%

Baker supplied 56% of biocide used in its competitors frac jobs (i.e. frac jobs not executed by Baker)

1% 0% 0%

Superior

Calfrac

Unknown

Maverick

Note: Analysis includes data from 612 fracs in the DJ Basin executed between January 2011 and September 2011 from the PacWest FracDB
Client Confidential PacWest 2011 | All rights reserved | 13

FRACDB CAPABILITIES OVERVIEW

Although there are eight different biocides used in the DJ Basin, Bakers DBNPA product is by far the most common
Biocide Market Share in the DJ Basin
Biocide Consumption in the DJ Basin (Jan-Sep 2011)
300,000 253,532 250,000 200,000 150,000 100,000 50,000 0 Baker Hughes Calfrac Halliburton Unknown 44,182

Comments
Baker is the dominant biocide supplier in the DJ Basin, with 75% of market share Baker sells two biocide products in the DJ: DBNPA (94%) and THPS (6%) Calfrac is the 2nd largest supplier, with 13% share (44,182 pounds), followed by Halliburton with 10% share (44,182 pounds)
Short-Hand Biocide Full Name
Bronopol
DBNPA

Total = 336,342 pounds

MBNPA Propietary Bronopol NaOH THPS NaClO PEG DBNPA

Pounds Biocide

2-Bromo-2-Nitro-1,3-Propanediol
2,2-Dibromo-3-Nitrilopropionamide 2-Monobromo-3-itrilopropionamide

34,768 3,859

MBNPA

NaClO
NaOH PEG Proprietary THPS

Sodium Hypochlorite
Sodium Hydroxide Polyethylene Glycol Unknown Proprietary Tetrakis (Hydroxymethyl) Phosphonium Sulfate PacWest 2011 | All rights reserved | 14

Note: Analysis includes data from 612 fracs in the DJ Basin executed between January 2011 and September 2011 from the PacWest FracDB
Client Confidential

FRACDB CAPABILITIES OVERVIEW

Contents
1. PacWest Snapshot 2. FracDB Capabilities FracDB Overview Pressure Pumper & Customer Relationships Case Study Completions Chemical Market Case Study

3. PacWest Market Intelligence Offerings

Client Confidential

PacWest 2011 | All rights reserved | 15

FRACDB CAPABILITIES OVERVIEW

PacWest currently offers multiple unconventional market intelligence product offerings to support subscriber decision-making
Market Intelligence Offerings
Breakdown of pressure pumping fleets/capacity by basin and supplier with strategic analysis of latest regional supply market trends Interactive database of 100+ critical unconventional suppliers Cost escalation forecast for major D&C categories

Detailed breakdown of frac activity by basin, operator, pumper Database of fracs including basin, operator, pumper, chemicals, chemical suppliers
Client Confidential PacWest 2011 | All rights reserved | 16

FRACDB CAPABILITIES OVERVIEW

PumpingIQ provides the only granular breakdown of regional fleets/capacity by pressure pumper and analysis of market trends

Fleet/Capacity Breakdown & Trends

On-going monitoring of pressure pumping fleets and capacity in major US onshore frac markets Granular regional breakdowns of fleets/capacity by pumper Key customers by pumper Detailed discussion of major trends and strategic insights for each region and US market in aggregate

Focus Markets
Bakken Eagle Ford

Permian
DJ Basin Anadarko Marcellus

Uinta/Piceance/Green River
Haynesville Fayetteville Barnett

PumpingIQ is the only granular fleet breakdown available in the market

Client Confidential PacWest 2011 | All rights reserved | 17

FRACDB CAPABILITIES OVERVIEW

SupplierIQ is an interactive database of 100+ suppliers that are critical players in shale supply markets

Supplier Analysis
Interactive database of 100+ companies that supply critical D&C products/services for shale production Database is updated quarterly with new suppliers; updates made to existing suppliers bi-annually

Profile Contents
PacWest Supplier Classification

Company Overview & Analysis

Service Offerings Geographic Footprint Financials

Subscribers can request supplier additions

Offer two forms of subscription to database: full SupplierIQ access or a subset of suppliers, customized to subscriber needs

Customers
Organizational Footprint Detailed discussion of Service Offerings: 15 product/services that are critical for shale production

SupplierIQ provides insightful snapshots of your key suppliers and competitors

Client Confidential PacWest 2011 | All rights reserved | 18

FRACDB CAPABILITIES OVERVIEW

CostIQ provides a forecast of cost increases for key drilling and completion cost drivers

Forecast Analysis
3-year forecast of D&C cost escalation, segmented into major categories
Includes strategic discussion of trends driving increases and/or decreases Updated bi-annually (every 6 months) PacWest utilizes three quantitative methods to forecast prices changes for each market segment: - Multi-variable regression

Cost Segments
Drilling
- Land rigs - OCTG - Drilling fluids

- Cementing services
Completion - Pressure pumping services - Proppant - Frac chemicals - Completion hardware - Completion rigs

- Demand/supply models
- Macroeconomic models

CostIQ provides 3-year cost forecasts for each key US region

Client Confidential PacWest 2011 | All rights reserved | 19

FRACDB CAPABILITIES OVERVIEW

FracIQ is the source of frac activity data by operator and pressure pumper, with data broken down US-wide and regionally

Product Overview
The definitive subscription publication on frac activity across the US
Summary of fracs by region, operator, pressure pumper Market share by pumper and operator across multiple metrics Strategic analysis of frac trends and market dynamics, including implications for operators, pressure pumpers, and other stakeholders Updated quarterly

Contents
Aggregate US fracs:
- By operator - By pressure pumper Regional breakdown of fracs:

- By operator
- By pressure pumper - By frac type Operator and pumper relationships Frac practices, including chemicals usage

Your Land Rig Newsletter for the frac market available late 2011
Client Confidential PacWest 2011 | All rights reserved | 20

FRACDB CAPABILITIES OVERVIEW

FracDB is the definitive database of fracs and frac chemicals that can be used to conduct sophisticated market analyses

Product Overview
Database of US fracs and frac chemicals, built into a rich structured data set
- The data set already contains nearly 7,000 fracs conducted in 2011 A sophisticated tool that can be used to run a variety of analyses: - Pressure pumping/frac market share - Completion chemicals market share - Regional frac design practices

Data Elements
Frac date
Well number, API number Operator TVD

Water volume
Pressure Pumper Play Chemical type Chemical ingredient Chemical supplier Contact us for more detail

- And dozens of other analyses

Updated quarterly

FracDB is a powerful tool for the sophisticated market analyst available late 2011
Client Confidential PacWest 2011 | All rights reserved | 21

FRACDB CAPABILITIES OVERVIEW

The ShaleIQ bundled product provides access to 3 useful products at a reduced price point

Bundle Includes

Breakdown of pressure pumping fleets/capacity by basin and supplier with strategic analysis of latest regional supply market trends

Interactive database of 100+ critical unconventional suppliers

Cost escalation forecast for major D&C categories

The ShaleIQ bundle is a valuable resource to add to your decision making toolkit
Client Confidential PacWest 2011 | All rights reserved | 22

FRACDB CAPABILITIES OVERVIEW

PacWest delivers actionable intelligence that is designed to provide strategic recommendations to key decision-makers
Actionable Intelligence
Transforms volumes of disparate market data, insider industry activity and expert input into strategic and actionable recommendations for decision-makers Aggregates, organizes and distills a wide range of data and intelligence to provide information to our clients that is comprehensive, focused and strategic Analyzes this information to assess its strategic implications and provide a clear path of action for each stakeholder

Decision-Makers

Client Confidential

PacWest 2011 | All rights reserved | 23

FRACDB CAPABILITIES OVERVIEW

PacWest employs a comprehensive methodology that relies on primary intelligence and rigorous research and analysis
Methodology
PacWest uses a multi-pronged approach to develop its market intelligence offerings; the team:

1) Gathers and reviews all information available publicly and via proprietary databases
2) Engages its diverse network of industry contacts to gather real-time intelligence 3) Processes and synthesizes raw information into actionable intelligence

Primary Intelligence Gathering

Insights are based on: Constant conversations with our source network of field experts on-the-ground Surveys from operators and suppliers In-depth interviews and conversations with operators and suppliers Industry-leading experts and technical specialists PacWest internal databases
Client Confidential

Secondary Research
These sources are regularly consulted: Market research and reports Company annual reports, 10-Ks, 10-Qs

Speeches and presentations by company leadership and other industry experts

Analyst reports from leading banks Government data

PacWest 2011 | All rights reserved | 24