us consults public sector and energy services

EXECUTIVE OFFICES � 11 CROOKED OAK ROAD � BELLE TERRE � NEW YORK � 11777 � PHONE: 631-474-1151 � FAX: 631-331-9260

GENERAL OFFICES � JACKSON HOLE � WYOMING 83001

WWW.USCONSULTS.COM

CREATING & CAPTURING OPPORTUNITIES

CONSULTING SERVICES FOR BUSINESS & GOVERNMENT General Offices: P.O. Box 2323 � 290 East Broadway � Suite 908 � Jackson Hole � Wyoming 83001

Executive Offices: 11 Crooked Oak Road � Belle Terre � New York 11777 � Phone: 631-474-1151 � Fax: 631-331-9260 www.usconsults.com

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ABOUT US CONSULTS LLC

US Consults is a privately held national consulting company that has been providing unique income-enhancing solutions to its clients in boththe public and private sectors for over 25 years. For public sector clients, the services can result in (i) new revenue without adding burdento constituents, and/or (ii) reduced costs. These solutions invariably are attained through the successful negotiation of significantdiscretionary benefits – negotiations conducted by US Consults. In many instances, the solutions are unique, created solely for the purposeof resolving a specific client’s revenue or other challenge. Although US Consults provides services to state government, its focus in thepublic sector is on local government.

OUR EXPERTISE

Although US Consults was founded to enable private sector companies to achieve a distinct and unique competitive advantage, intrinsic inthat process was gaining an understanding of the needs of local and state government - and the development of solutions that satisfied boththe client’s needs and those of government. Thus over time, as a result of this approach and our company’s non-adversarial demeanor innegotiations, US Consults developed strong and positive relationships both with government entities it directly represents as well as thosewith which it negotiates on behalf of private sector clients. In fact, the background of US Consults’ partners reflects the company’scollaborative approach and strength in perspective, as half of the partners were formerly in government.

US Consults is in a unique position to provide a local community with the critical insights and expertise needed for successful economicdevelopment. Its nationwide perspective and its base of private sector clients provide its public sector clients with a unique understandingof the tools and resources required. Additionally, because US Consults functions as adjunct staff, not simply as advisors, US Consults itselfis a critical resource for its public sector client, which may lack the physical resources or expertise needed to capture an opportunity. It isalso important to note that in accomplishing the clients’ objectives, US Consults works in full transparency to its clients, with full pre-approval of all communication (written and verbal) to ensure that our representation is fully consistent with our client’s direction.

ORGANIZATIONAL STRENGTHS

• CREATIVITY: US Consults does not simply accept the programs and incentives that exist. US Consults actually creates policy and programsas well.

• PERSPECTIVE: With extensive experience throughout the country, US Consults leverages other states’ incentives and legislation to expandprograms, policies, and incentives in the client’s state. Without such personal experience, a negotiator lacks the necessary knowledge andleverage to maximize benefits. The leverage is created by more than simple knowledge of programs; it is primarily the product of USConsults’ extensive multi-state negotiating success. Thus, it is this proprietary and detailed knowledge that provides critical incrementalleverage in negotiations - a knowledge base that is unique to US Consults. As a result, US Consults has leverage beyond that of either theclient or any of US Consults’ potential competitors.

• RESOURCES: US Consults only utilizes mature, experienced partners in representing a client. Thus, negotiations are conducted on a peerlevel with decision-makers.

• KNOWLEDGE: US Consults thoroughly researches before it negotiates. It thoroughly researches before it recommends a strategy – evenprior to the commencement of negotiations. As a result, negotiations are almost always collaborative, rather than adversarial.

• INTELLECT & ANALYTICAL SKILLS: US Consults is expert at differentiating between statute and program, in understanding the limits of thelaw versus the artificial obstructions of policy. That innate ability and discipline has often been a principal factor in the magnitude ofincentives offered and awarded. Additionally, US Consults has exceptional analytic and research skills.

• RAISON D’ÉTAT & RAISON D’ÊTRE: US Consults is able to communicate effectively both political and economic rationales for the requiredsupport, drawing upon extensive research. This ability is critical for success – both absolute and in the magnitude of the awards. We aretold continually by client and government alike that our expertise is truly unique and wholly unmatched.

• DISCRETION VS ENTITLEMENT: Our non-belligerent, collaborative approach to negotiations is a critical factor in our success, alwaystreating the counter party with respect and the recognition that everything is discretionary.

• ADJUNCT STAFF: Rather than simply advising, US Consults acts as adjunct staff for its clients and actually does the work. We conduct theresearch, write applications and proposals, serve as point of contact for communication, negotiate the awards, and, where applicable, thenmanage the contracts.

REVENUE

EXAMPLES OF EXPERTISE

• STATE REVENUE SHARING: A county approached US Consults because it was revenue-challenged. It had an impoverished electorate, wasrural, and under-populated. It had no influence within the state legislature. US Consults developed, in full transparency with the state,several options by which the County could generate significant new revenue without burdening its electorate. The county elected toimplement the mechanism with the greatest revenue potential - one that ipso facto provided the county with revenue sharing from a statetax which had no provision by statute for any such sharing of revenue back to the county of origin.

• WORKFORCE FUNDING: A regional workforce board approached US Consults because it lacked the financial resources to satisfy asignificant workforce training need. US Consults identified and targeted appropriate federal funding resources and then obtained severalmillion dollars in grants for the board. Simultaneously, US Consults trained the board’s staff, so that the board could become self-sufficientin accessing future funding opportunities. The program has been highly successful, with the board repeating the early successesindependent of further assistance from US Consults. US Consults has used this approach as a successful model for other workforce boardsas well.

• EDUCATION FUNDING: A local school system was revenue-starved. US Consults, in full transparency with the state, structured payment-in-lieu of tax agreements that both (i) provided incremental net revenue to the school district and (ii) tax relief for the local taxpayer. Thisscenario has repeated a number of times with other school systems.

• LOCAL BUSINESS INVESTMENT SUBSIDY: A company was considering an investment that would both retain and create new jobs. However,the financial payback was insufficient to justify the expenditure. US Consults obtained a state grant enabling the investment to proceed.This scenario has repeated literally dozens of times, helping communities both maintain and expand their tax and general economic base.US Consults has extensive experience obtaining state and federal funding for private sector projects - funding in the form of grants and/orultra-low interest or forgivable loans.

• COMMUNITY & ECONOMIC DEVELOPMENT: A company was planning to make a significant investment that would provide a community withan entertainment center. The community lacked such facilities - and the nearest entertainment was over 100 miles distant. The investmentitself, however, was of marginal financial viability (payback). US Consults obtained a state grant for the project, creating over 50 jobs inaddition to providing services otherwise absent in the community.

• PURCHASING: The municipal utility of a city (which had been in operation for over 100 years) utilized US Consults to identify and thenobtain significantly lower-cost sources of natural gas for its generation.

REVENUE

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GENERAL OFFICES � JACKSON HOLE � WYOMING 83001 WWW.USCONSULTS.COM

ABOUT US CONSULTS LLC

US Consults is a privately held national consulting company that has been providing unique income-enhancing solutions to its clients in both the public and private sectors for over 25 years. These solutions invariably have been attained through the successful negotiation of significant discretionary benefits – negotiations conducted by US Consults. Our client list includes manufacturers (Frito-Lay, Hi-Tech Pharmacal, Kolmar Labs, etc.), energy producers (Riata Energy, Sempra Energy, Infinite Energy, etc.), utilities (Lakeland Electric, TECO, etc.) and local government (Pecos County, Polk County, City of Lakeland, etc). Additionally, we function as ad hoc advisors to state government. Of note: (i) two of our partners are members of the Petroleum Club of Midland, Texas, and the Dallas Petroleum Club; and (ii) Pecos County is one of the three largest oil and gas producing counties in Texas. In fact, it is one of the five largest oil and gas producing counties in the U.S.

OUR ENERGY EXPERTISE

Through our representation of clients in all aspects of the energy industry, during the past two decades US Consults has developed both unique relationships and an exclusive and extensive knowledge base. We currently consult for virtually all parties in energy transactions - from royalty owners through producers to the ultimate consumer (such as utilities and manufacturers). We consult to the parties that tax the energy as well as those who produce it and pay those taxes. We are aware of no other company that has this comprehensive knowledge and perspective of the industry – and the capability to turn it into real incremental wealth for clients.

THE VALUE WE BRING

ROYALTY INTEREST OWNER

• CONTRACT NEGOTIATIONS: US Consults’ unique nationwide representation provides it with intimate and proprietary knowledge of the current market terms and conditions, enabling the Royalty Interest Owner to maximize bonus payments, percentage share, and ultimately net income.

• CONTRACT PERFORMANCE MANAGEMENT: Maximizing the revenue stream requires oversight to ensure compliance with contractual allowances – and to ensure proper valuation of the produced energy.

• CONTRACT VALUE OPTIMIZATION: Through its unique collaborative approach, US Consults increases the total net revenue from the energy produced – optimizing the full contract value.

WORKING INTEREST OWNER

• AD VALOREM ABATEMENT: US Consults has unique and extensive experience negotiating ad valorem valuation and abatement, utilizing a collaborative rather than adversarial approach that results in improved rather than strained government and community relations.

• SEVERANCE ABATEMENT: US Consults has developed a proprietary collaborative approach to severance tax abatement. As every producer knows, the market price for natural gas and crude oil includes taxes paid – and as a result when these same taxes are abated net revenue is increased.

• CASH GRANTS: Because of its extensive experience obtaining grants for manufacturers such as Frito-Lay, Campbell Soup and others, US Consults is able to obtain grants to offset both hard investment costs as well as soft costs (community development, etc.).

• LABOR INCENTIVES: US Consults is expert at obtaining work trials (free wages), wage subsidies (50% of the wages reimbursed), tax credits (up to $10,000 per hire) and training grants.

LOCAL GOVERNMENT

• AD VALOREM VALUATION: US Consults provides expert economic analytical support to tax districts to properly value reserves, and facilitates mutually beneficial P.I.L.O.T. agreements that enhance local revenue yet provide tax relief for the taxpayer.

• INCREMENTAL REVENUE STREAMS: US Consults can utilize the proprietary program it developed for Pecos County (Texas) to significantly enhance local government revenue – without adding any burden to the local taxpayer.

• ENERGY PURCHASING: US Consults can significantly reduce a government’s cost of energy through (i) negotiating special contracts to reduce costs inherently by as much as 20%, and (ii) providing expert analytical advice to support timing issues (long-term contracting, hedging, etc.).

LOCAL SCHOOLS

• INCREMENTAL REVENUE: US Consults has a successful track record of creating and implementing funding mechanisms that result in real, retained, and non-earmarked incremental revenue for school districts.

• REVENUE RETENTION: It is one thing for school districts to collect incremental revenue. It is usually quite another matter for that school district to be able to retain those revenues. US Consults is expert at structuring revenue streams to ensure that local school districts retain incremental revenue generated by activities such as oil and gas production.

PRIVATE SECTOR (OTHER ENERGY SECTOR BUSINESSES)

• AD VALOREM ABATEMENT: US Consults has unique and extensive experience negotiating ad valorem valuation and abatement, utilizing a collaborative rather than adversarial approach that results in improved rather than strained government and community relations. The cost of these taxes are inclusive in the usual and customary market prices of the commodity. As a result, by structuring purchases to exempt these taxes, the client can save substantially versus market commodity prices – enhancing its margins.

• SEVERANCE ABATEMENT: US Consults has developed a proprietary collaborative approach to severance tax abatement. As the market price for natural gas and crude oil includes taxes paid, when these same taxes are abated a client can save substantially versus the market price.



• DISCRETIONARY TAX CREDITS, ABATEMENTS & EXEMPTIONS: US Consults is expert at obtaining discretionary tax considerations for investment – federal, state and local.

• ENERGY PURCHASING: US Consults can significantly reduce a client’s cost of energy through (i) negotiating special contracts to reduce costs inherently by as much as 20%, (ii) providing expert analytical advice to support timing issues (long-term contracting, hedging, etc.), and (iii) implementing new purchasing methodologies to minimize costs.

PRIVATE SECTOR (NON-ENERGY SECTOR)

• AD VALOREM & SEVERANCE ABATEMENT: US Consults has unique and extensive experience negotiating ad valorem valuation and abatement, utilizing a collaborative rather than adversarial approach that results in improved rather than strained government and community relations. Additionally it has developed a proprietary collaborative approach to severance tax abatement. The cost of these taxes are inclusive in the usual and customary market prices of the commodity. As a result, by structuring purchases to exempt these taxes, the client can save substantially versus market commodity prices – enhancing its margins.



• DISCRETIONARY TAX CREDITS, ABATEMENTS & EXEMPTIONS: US Consults is expert at obtaining discretionary tax considerations for investment – federal, state and local.

• ENERGY PURCHASING: US Consults can significantly reduce a client’s cost of energy through (i) negotiating special contracts to reduce costs inherently by as much as 20%, (ii) providing expert analytical advice to support timing issues (long-term contracting, hedging, etc.), and (iii) implementing new purchasing methodologies to minimize costs.

HENRY HUB PREMIUM VS WAHA HUBINTERCONTINENTAL EXCHANGE DAY AHEAD DATA 6 MONTH ROLLING AVERAGE 2001-2005

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Oct 1, 2001

Nov 5

, 2001

Dec

12, 2001

Jan 2

2, 2002

Feb 2

7, 2002

Apr

4, 2002

May 9

, 2002

Jun 1

4, 2002

Jul 24, 2002

Aug 2

8, 2002

Oct 3, 2002

Nov 7

, 2002

Dec

16, 2002

Jan 2

4, 2003

Mar

4, 2003

Apr

8, 2003

May 1

4, 2003

Jun 1

9, 2003

Jul 25, 2003

Aug 2

9, 2003

Oct 6, 2003

Nov 1

0, 2003

Dec

17, 2003

Jan 2

8, 2004

Mar

4, 2004

Apr

8, 2004

May 1

4, 2004

Jun 2

2, 2004

Jul 28, 2004

Sep 1

, 2004

Oct 7, 2004

Nov 1

1, 2004

Dec

20, 2004

Jan 2

7, 2005

Mar

4, 2005

Apr

11, 2005

May 1

6, 2005

2.000

2.500

3.000

3.500

4.000

4.500

5.000

5.500

6.000

6.500

7.000

Avg Hub Spread Avg Henry Hub Price



WWW.USCONSULTS.COM

CREATING & CAPTURING OPPORTUNITIES

END

us consults public sector and energy services

Economy & Finance

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