1 investment banking acquisitions & divestitures global equity capital markets global energy...
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INVESTMENT BANKING
ACQUISITIONS & DIVESTITURES
GLOBAL EQUITY CAPITAL MARKETS
global energy sector specialists
IPAA’s Private Capital Conference / OGIS MLP Meeting
2007 in ReviewJanuary 16, 2008
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the insight behind energy success•One of the largest independent, global energy
advisory firms•Unmatched evaluation, advisory and execution capabilities•Over 150 employees, 5 locations on 3 continents
About Us
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connected, responsive, insightful
LONDON
HOUSTON
DENVER
INVESTMENT BANKINGMergers & AcquisitionsStrategic AdvisoryEquity UnderwritingFairness Opinions
ACQUISITIONS & DIVESTITURESNegotiated SaleMid-Value Negotiated
GLOBAL EQUITY CAPITAL MARKETSInstitutional ResearchInstitutional Sales Institutional TradingAsset Management
A Global Energy Advisory Firm
Core Services
CALGARY
BUENOS AIRES
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US Producer Research Coverage
• Tristone provides highly regarded, technically focused, in-depth research coverage on 25 US exploration & production companies
• Tristone’s US E&P research team is led by Joe Magner and Larry Busnardo
Initiating Coverage: US E&P
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2007 In Review
J.S. Herold & Tristone data
• Portfolio refocusing efforts put record supply of asset transactions on the market• Dominion & Anadarko led the way
• MLP’s broke into $1bln+ transactions• Linn, Breitburn & Atlas all made sizeable acquisitions
0
10,000
20,000
30,000
40,000
50,000
60,000
2000 2001 2002 2003 2004 2005 2006 2007
$MM
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
$/M
CF
E
Corporate Asset $/MCFE Weighted Average
$1.40/MCFE
$2.00/MCFE
$2.62/MCFE$2.30/MCFE
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Q1 - 2006 Q2 - 2006 Q3 - 2006 Q4-2006 Q1-2007 Q2-2007 Q3-2007 Q4-2007
$MM
0.00
0.40
0.80
1.20
1.60
2.00
2.40
2.80
3.20
3.60
$/M
CF
E
Asset Corporate $/MCFE
$2.44/MCFE Average
Quarterly Transaction Volumes vs. Implied $/MCFE
J.S. Herold & Tristone data
FST/Houston Exp
Apache/APC
Nippon/APC
ENI/Dominion
XTO/Dominion
McMoran/Newfield
Linn/Dominion
Plains/Pogo
Breitburn/Quicksilver
Encana/Leor
Oxy/Plains
Linn/Lamamco
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MLP Overview – Current & Prospective
J.S. Herold & Tristone data
Public MLPs
Atlas Energy Partners EV Energy PartnersBreitburn Energy Linn EnergyConstellation Energy Legacy ReservesEagle Rock Energy Partners Quest ResourcesEncore Energy Partners Vanguard Natural Resources
Prospective MLPs
Abraxas Energy Partners LP Plains ExplorationBerry Petroleum Resolute Energy Partners LPEXCO Partners LP (Pulled) VenocoPetrohawk Energy WhitingPioneer Southwest Energy Partners LP (Reduced) XTO Energy
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1Q-2006 2Q-2006 3Q-2006 4Q-2006 1Q-2007 2Q-2007 3Q-2007 4Q-2007
Tra
ns
ac
tio
n V
alu
e (
$M
M)
MLP Overview - Transaction Volumes – US Onshore Transactions
MLPs acquired ~25% of transactions in 2007 vs. 15% in 2006
J.S. Herold & Tristone data
- Non-MLP Companies
- MLPs
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Top Sellers in 2007 by Value
J.S. Herold & Tristone data
SellerTotal Deal
Values, $MM Deal Count
Implied$/Proved
MCFE Comments
13,332 4 2.08 E&P asset divestitures
4,662 8 2.45Non-core asset sales, debt
reduction
4,350 4 2.55 Corporate sale to Plains
2,550 1 N/A Corporate sale to Encana
1,656 1 2.25 Corporate sale to Forest
1,550 1 2.81 Sale of Putnam field to Oxy
1,530 2 1.95Sale of assets to Atlas &
Range
1,450 1 2.72Non-core asset sales to
Breitburn
1,284 3 3.30Portfolio refocusing – largest GOM sales to
McMoran Laramie Energy
945 1 2.23 Corporate sale to Plains
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Top Buyers in 2007 by Value
J.S. Herold & Tristone data
Buyers
Total Deal Values,
$MMDeal
Count
Implied$/Proved
MCFE Comments
4,757 1 4.47 Bought Dominion GOM assets
4,686 2 2.42 Pogo, Laramie
4,025 1 1.31 Bought various Dominion assets
3,050 2 1.86Dominion’s Rockies/San Juan/South
Texas, Arrington (Barnett Shale)
2,715 4 2.03 Dominion’s MidCon, Lamamco, Pogo
2,550 1 N/A Leor Energy
1,671 4 2.60 Quicksilver
FOREST OIL 1,656 1 2.25 Houston Exploration
1,550 1 2.81 Plains Permian assets
1,236 2 1.96 DTE’s Antrim Shale assets
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Top Buyers in 2007 by Count
J.S. Herold & Tristone data
BuyerTotal Deal
Values, $MMDeal
Count
Implied$/Proved
MCFE Comments
156 6 2.30Permian & Mid-Continent
acquisitions
1,137 5 2.19Various asset acquisitions,
largest was Austin Chalk form APC
2,715 4 2.03Acquisitions across US, largest
from Quicksilver
1,671 4 2.6Mid-Continent focused
transactions, largest from Dominion
468 4 1.56Several Barnett Shale, Permian
& Rocky acquisitions
125 4 1.27Acquisitions across Mid-Continent & Gulf Coast
1,017 3 2.16Gas-weighted assets in Mid-Continent & Permian basin
651 3 2.91Appalachia & Mid-Continent
acquisitions
548 3 3.80Various high PDP acquisitions
including Montierra & Escambia
483 3 2.58Various Cherokee basin
acquisitions
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Tombstones & New Entrants
Notable Corporate Sales
Ascent Energy Inc. Pinnacle Gas ResourcesDominion E&P Pogo Producing CompanyDTE E&P The Houston Exploration CompanyGoldking Energy Corp Whittier Energy CorpPeoples E&P
New Entrants
Highmount (Loews Corp) Sojitz CorporationMilagro Energy Talon Oil & Gas
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2007 Transaction Values by Region vs. 2006
J.S. Herold & Tristone data
Mid-Continent transactions grew the most in 2007, while GOM transactions were not as large as 2006
0
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Mid-Continent
Gulf Coast Appalachian Rockies Permian South Texas NLA/ETX West Coast North Texas GOM
$MM
2007 Values 2006 Values
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Top Buyers by Region
J.S. Herold & Tristone data
El Paso Corporation $875
Milagro Energy 825
EV Energy Partners LP 750
Gulf Coast
BreitBurn Energy Partners LP $1,450 Loews Corp $4,025
Atlas Energy Resources LLC 1,236 Plains Exploration & Production Co 3,740
Range Resources Corporation 315 Linn Energy LLC 2,715
Eni SpA $4,757 EnCana Corporation $2,550
Nippon / Mitsui 1,200 Petrohawk Energy Corporation 169
McMoRan Exploration Company 1,100 EV Energy Partners LP 96
Appalachian Mid-Continent
NLA/ ETX GOM
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Top Buyers by Region
J.S. Herold & Tristone data
Occidental Petroleum Corporation $1,550
Apache Corporation 1,000
EV Energy Partners LP 160
Permian
XTO Energy Incorporated $2,500 Swift Energy Company $245
Plains Exploration & Production Co 945 Comstock Resources 203
Newfield 522 St Mary Land & Exploration 183
XTO Energy Incorporated $550 BreitBurn Energy Partners LP $92
Pioneer Natural Resources 150 Venoco Inc. 87
South Texas
West Coast North Texas
Rockies
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What’s Ahead for 2008
Tristone Capital is a Member of the CIPF, SIPC, IDA and FINRA
• Consolidation
• MLPs• Equity markets• New entries?
• Prices• Gas inventory• Crude – Can it sustain $100/bbl
• Election Year – Same old story “Big Oil”