Energy Capital Management

December 2011

Energy Capital Management

ECM Summary

Background

Statoil (www.statoil.com)
International oil & gas and renewable energy company, market cap USD 70bn Global leader in technology adoption, not an owner of technologies Alignment with independent venture capital firm provides significant benefits

ECM Fund I
Managing Statoils legacy portfolio (currently 11 companies) Established in 2008 Technology agreement with Statoil

ECM Growth Fund I

Investing in European oil service companies Fund size $200m (8-10 investments)

ECM offices in Oslo (Norway) and Aberdeen (UK)

Energy Capital Management

ECM is an independent venture capital firm focused on technology investments in the oil & gas and renewable energy sectors

ECM will deliver superior returns by leveraging the teams experience, international network and unique access to Statoil

Current Portfolio Overview

OIL & GAS

EXPLORATION

RESERVOIR

DRILLLING & WELL

OPERATION

OTHER

Team profiles
13 years venture capital experience 13 years experience in the energy sector 3i, Hitecvision, ECM

Played a key role in Petrofac, RGIT, Revus Energy, Spring Energy and SPS Bachelor of Science (Hons) Accountancy & Computer Science from Dundee (UK)
Mike Hill Partner

8 years venture capital experience 9 years experience in the energy sector DNV, Hydro, Statoil , ECM

Played a key role in Spectraseis, Multifield Geo, Energreen, Geomodelling and Octio MSc in Physics from NTNU (Norway) , MBA from London Business School (UK)
Arne Friland Partner

10 years venture capital experience 8 years experience in the energy sector 3i, ECM

Played a key role in Dockwise, Noreco, DES, RXT and Epcon Masters in Economics from Fribourg (Switzerland), MBA from London Business School (UK)
Hans Middelthon Partner

4 years venture capital experience in the energy sector (ECM, Statoil, Hydro) 3 years operational experience (Hydro oil & gas, Kongsberg Automotive) MSc Physics INSA, Toulouse (France)
Caroline Slind Svae Associate

Energy Capital Management

ECM Growth Fund I

Energy Capital Management

Opportunity highlights
ECM Growth Fund I Investing in European oil service companies Fund size $200m (8-10 investments)

Investment team Strong money making track record Deep sector understanding and network

Sector characteristics Compelling market fundamentals

Returns potential Robust deal flow with limited competition Focused value creation model Differentiated access to end customers Established exit routes and strong buyer appetite

ECM Growth Fund I

Mandate

Sector

Oil & gas service (upstream)

Geography

European headquartered companies

Product

Growth capital and small Buyouts

Company stage

Positive EBITDA

Deal size

Average commitment $20m per company

Equity stakes

>25% and controlling rights

Energy Capital Management

Team

10

Team

Key attributes

Investment track record

39 years of VC/PE experience 46 VC/PE deals completed 3.1x on 23 exited investments in the energy sector Involvement in full VC/PE value chain

Sector depth

39 years of relevant oil & gas sector experience Involvement in full oil & gas value chain

Market position

Excellent sector network Differentiated access to end users Offices covering Europes leading oil & gas hubs

11

Team

Investment team
VC/PE Mike Hill Hans Middelthon Arne Froiland Caroline S. Svae [No-name] Partner Partner Partner Associate [TBC] Aberdeen Aberdeen Oslo Oslo [TBC] 14 yrs 11 yrs 10 yrs 4 yrs [TBC] Energy 14 yrs 9 yrs 11 yrs 5 yrs [TBC] Prior positions HitecVision; 3i; Coopers & Lybrand 3i; Commerzbank Statoil; Hydro; DNV; Private Investor Statoil; Hydro; Kongsberg Automotive [TBC]

Advisory board
Prior positions [No-name] [No-name] [No-name] Chairman Member Member UK UK Norway [TBC] [TBC] [TBC]

12

Team
Track record example of exited deals

IPO London Stock Exchange

Trade sale Cooper Cameron

IPO Oslo Stock Exchange

Trade sale Petrofac

IPO Oslo Stock Exchange

5,3X
2002-2005

2,5X
2003-2007

4,9X
2003-2005

2,2X
2003-2004

2,1X
2007-2009

IPO Oslo Stock Exchange

IPO Oslo Stock Exchange

Trade Sale MI Swaco

Trade Sale TGC Nopec

Trade /Secondary GE/Ferd

2,6X
2004-2005

2,5X
2005-2007

2,5X
2004-2006

2,2X
2006-2010

4,4X
2004-2007

13

Energy Capital Management

Market

14

Tight oil supply and demand balance

Urgent need for increased production capacity
120 100 80 60 40 20 0 2010 2012 2014 2016 2018 2020
Biof uels, other NGLs declining at 2% pa Crude declining at 7% pa Flat demand IEA Demand f orecast WEO2010 (Nov '10)

Oil flows (mln bbl pd)

2010 demand level, 88 mln bpd

47 mmbbl/d
39 mmbbl/d

Current decline rate from existing fields

6% annual depletion and 1,2% annual increase in demand required more than 50% of daily production in 2020 from new capacity Saudi Arabias current output capacity of close to 10m bbl needs to get on stream every second year until 2020 in order to meet expected demand growth

Source: Lambert Energy Advisory

15

Focused Investment Approach

The Oil & Gas industry value chain

Upstream

Midstream

Downstream

Exploration
Investing only in the upstream part of the oil & gas value chain Focus on Exploration and Production Key investment themes to support :

Development

Increased exploration success Improved production rates Reducing the cost of exploration and production Extending the life of producing fields

Production

Abandonment

Governments energy policies (tax) will most likely support these themes going forward and be ECM sweet spots for investing

16

Strong underlying drivers

Upstream trends and challenges

Exploration

Increasingly complex and deeper reservoirs. E&P companies seek into deeper and more complex sediments. Thus, there is an urgent need of technologies and services that can handle extreme temperatures, pressures, enlighten the reservoirs and increase drilling reach. Smaller discoveries. The Elephant Discoveries made in the second half of the last century have matured and are being replaced by smaller fields. This trend is driving an ever increasing drilling activity search for solutions that decreases the drilling cost and makes these discoveries commercially viable. Rapid cost inflation. The need to drill deeper in harsher environments with more geological uncertainty has significantly increased the cost per well. To address this this challenge the industry is putting substantial resources into solutions that can drive down costs and increase the probability of success.

Production

Low recovery rates. Today the oil & gas industry only manages to recover on average 35% of the oil in place in producing fields. A one percentage point increase in recovery equates to approximately three years global consumption. Harsher environments. As the oil & gas industry matures it has had to move production to more hostile terrains such as the Arctic. Close to 25% of total remaining reserves are expected to be found in these areas, but the industry needs to overcome substantial technological and environmental challenges to access these prospects. Mature basins. The industry as a whole is experiencing an output decline in the region of 6% from its producing fields. It is vital for industry players as well as regulators in mature basins to address the sharp decline with the view to extend field life.

17

Significant target universe

Urgent need for new solutions and services
E&P Challenges Business Needs
Reservoir Imaging Reservoir Characterization Improved Prospect definition Fast Track Development Low cost exploration drilling Cost inflation Smarter exploration drilling Steering, LWD

Service Areas (examples)

4D/4C Seismic, EM, Graviometry Modelling of shale plays G&G workflow integration Subsea monitoring and processing Light drilling, Subsea drilling

Exploration
More complex and deeper reservoirs

Smaller discoveries

Production

Low recovery rates

Improve reservoir permeability Smart drilling Deeper Reservoirs Longer step outs and tie backs Water treatment solutions

Stimulation, fracturing and flooding Intervention, MWD, Communication Risers, HP/HT solutions, materials Flow assurance, Inspection Subsea water treatment Monitoring cap rock and seabed

Harsher environment

Mature basins Integrity monitoring

18

Energy Capital Management

Return potential

19

Return potential
Robust deal flow
Equity need

No. of opportunities*

c75*

$40m-$100m ($10m+ EBITDA)

>250*

$10m-$40m equity (Positive EBITDA)

High Replenishment

$1m-$10m equity (Negative EBITDA) >1,500*

Start-ups/Seed

20

*ECM estimates

Return potential
Limited competition
Competitive threat Low Comments Target larger deals Buyout focus US & ME weighting Target larger deals Buyout focus Norway centric Target larger deals Growth & buyout offerings Reduced sector focus Target larger deals Buyout focus US centric Limited deal size overlap

Low

Low

Low

N/A

Medium

Smaller deals Venture focus Smaller deals Venture focus

Low

10

20

30

40

>50

Investment sweet spot MUSD

21

Return potential
Focused value creation model
ECMs value creation activities is built on the teams deep sector knowledge combined with its extensive investing experience:

Value driver Board Management Corporate governance Business strategy Organic growth International expansion Mergers & Acquisitions Cost management Funding structure Exit planning

Example Vetco: Strengthened board through introduction of Egil Myklebust as Director Epcon: Strengthened management through introduction of Arne Aune as new CEO Geomodeling: Introduced best in class corporate governance procedures (with strong focus on Chinese operations) Energreen: Spun out Energreen Waste Heat Recovery and refocused core business Petrofac: Introduced Petrofac to UK clients and partners Verdande: Secured Baker as strategic partner for international growth strategy Dockwise: Merged company with Sealift to establish clear market leader Trac ID: Worked extensively with management to address cash flow challenges Octio: Asset sale (seismic vessel) and restructuring of debt DES: Positioned DES early vis a vis subsea companies (most likely acquirers)

22

Return potential
Differentiated access to end user
ECM currently actively manages 7 oil & gas technology investments for Statoil (www.Statoil.com) ECM is a preferred venture capital partner for Statoil which facilitates: Information sharing on sector trends Opportunity sharing Technology and commercial reviews of investment opportunities Discussions regarding product testing and/or commercial purchases Customer support in exit discussions

This relationship has the potential to enhance returns of ECM Growth Fund I: Origination Execution Asset management Exit

Proprietary dealflow

De-risk investment case

Accelerate market adoption

Enhance credibility

23

Return potential
Established exit routes and strong buyer appetite

Acquired by Schlumberger 2009 Acquired by GE 2010 Acquired by MI Swaco 2006 Acquired by PGS 2007 Acquired by Watherford 2007 Acquired by FMC 2009 Acquired by MI Swaco 2009 Acquired by Schlumberger 2010

Acquired by Schlumberger 2009

NOVA Technology Corp

Acquired by Cooper Cameron 2007 Acquired by Baker Hughes 2006

Acquired by Siemens 2011 Acquired by strategic buyer 2009 IPO London 2005 Acquired by Torr 2007 Acquired 45% by FMC 2008 Acquired by TGS Nopec 2011 Acquired by Schlumberger 2005

Zeroth Technology Ltd

Acquired by Baker Hughes 2005

IPO Oslo 2007 Acquired by Petrofac 2008

10% stake acquired by Schlumberger 2009

Acquired by Schlumberger 2010 Acquired by MI Swaco 2006 Acquired by Halliburton 2008 Acquired by Schlumberger 2009

IPO Oslo 2005 Acquired by RECS Ltd 2007

V.I.P.S
Acquired by Schlumberger 2007 Acquired by FMC 2009

Acquired by Seawell 2010

Universal Wireline Applied Geophysical Services

IPO Oslo 2005 Acquired by PGS 2007

InnerLogix
Acquired by Schlumberger 2007 Acquired by Halliburton 2009

Acquired by Seawell 2010

24

Conclusion

Excellent team

Compelling market fundamentals

High returns potential

25

Contact Details

Energy Capital Management AS

Bankplassen 1a, N-0151 Oslo, Norway 70 Queens Road, AB15 4YE, Aberdeen, UK

Arne Friland Partner +47 90 74 86 33 arne.froiland@energycapital.no

Mike Hill Partner +44 77 01 07 53 85 mike.hill@energycapital.no

Hans Middelthon Partner +44 77 78 81 77 86 hans.middelthon@energycapital.no

Caroline Svae Associate +47 97 00 82 11 caroline.svae@energycapital.no

Kristin P. Solvang Office Manager/Finance +47 41 21 45 74 kristin.solvang@energycapital.no