STRATEGIC CONSULTING AND INDUSTRY ADVISORY SERVICES Merger and Acquisition Support

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1 Baker & O Brien s due diligence experts often work closely with and advise financial teams on a wide range of technical and economic issues that impact the hydrocarbon processing industries. Our consultants have prepared due diligence reports for transactions involving a wide variety of existing facilities. In addition to acting for equity investors, we also provide support to lending institutions that require an independent assessment of the facilities to secure the loan and operating companies seeking to divest or acquire the assets. RELATED INDUSTRIES Additional Process Industries Gas Processing Oil and Gas Production Petrochemical / Chemical Petroleum Refining Power Generation Renewable / Alternative Energy Transportation and Storage Our expertise in conducting due diligence investigations of existing midstream and downstream assets has typically included some or all of the following activities: Review of hydrocarbon purchase and sale contracts for consistency with commercial norms; Analysis of historical and projected operational and financial data for significant anomalies; Physical inspection of the facilities, operations, and associated records; Competitive review of the facilities within the appropriate markets; and Development of a financial model that translates estimated production volumes, prices, operating expenses, sustaining capital requirements, and an appropriate discount rate into a fair market value. 1 of 12

2 PRIMARY CONTACTS Donald L. Flessner President Dallas Dileep N. Sirur Vice President, Recruiting Manager Dallas Kevin G. Waguespack Executive Vice President Houston 2 of 12

3 RELATED EXPERIENCE Acquisition of Crude Oil Gathering System Conducted technical and economic due diligence on behalf of commercial bank in conjunction with the financed acquisition of a crude oil gathering system from a major oil company. Bankruptcy Reorganization Developed, in conjunction with senior management, reorganization plans for various operating segments of a major trading and transport company. The resulting business plan formed the foundation of the company's successful reorganization and emergence from bankruptcy. Business/Technology Valuation Conducted a due diligence assessment and preliminary economic valuation of an existing business with proprietary technology designed to significantly reduce crude oil exploration and finding costs. Company Reorganization Study Following the bankruptcy of a major Singapore-based shipyard, with significant oil interests throughout Southeast Asia, worked with the company's lenders to restructure and reorganize the company's asset base. Made visits to all major company sites and prepared report outlining current status. Recommended the disposition of non-core assets and the reorganization of core assets into a smaller and less highly leveraged entity. Following acceptance of most of recommendations by creditors' committee, company was able to successfully emerge from bankruptcy protection. Crude Oil Evaluation Evaluated several processing alternatives and combinations of various refining assets located in the Caribbean and on the U.S. Gulf Coast to process heavy Ecuadorian crude oil production. Crude Oil Pipeline Acquisition On behalf of an international pipeline company, prepared an assessment of the acquisition of a fifty percent ownership in a pipeline system that transports crude oil from Canada into the U.S. Study included crude oil supply/demand projections for the markets served. Due Diligence of Gas Gathering and Processing Assets Conducted due diligence on gas gathering and processing assets within the Permian Basin in Southeast New Mexico and West Texas on behalf of lending group and prospective purchaser. Conducted physical inspection of the facilities, reviewed operation and maintenance records, 3 of 12

4 Conducted physical inspection of the facilities, reviewed operation and maintenance records, assessed gas supply and competitive position, and reviewed financial assumptions and projections to ensure consistency with current gas supply contracts and asset performance. Ethanol Terminal Blending Facility Evaluation On behalf of a private equity firm, reviewed a site development plan for a coastal ethanol receiving terminal and associated gasoline blending facility. Evaluated the market competition for terminalling services within the local area. Evaluation of Refinery Competitive Environment Helped in the defense of a major oil company against the Federal Trade Commission's (FTC's) claims regarding the anti-competitive nature of the company's proposed acquisition of a West Coast-based refining and marketing company. Prepared a detailed report analyzing the West Coast refining industry. Assessed the competitive position of each West Coast refinery processing Alaskan crude oil and how they might respond to changes in crude oil prices and/or availability. Fertilizers Company Privatization Performed due diligence for the purchase of several fertilizer plants located near Moscow on behalf of an investor. These plants manufactured nitrogen fertilizers, phosphate fertilizers, methanol, and other related industrial chemicals. Inspected company assets, assessed technology, analyzed feedstock and product markets, reviewed contracts, evaluated capital investment programs, and analyzed comparative manufacturing economics. M&A Dispute Evaluated the foreseeability of project cost overruns that negatively impacted the economics of the acquisition of an EPC Firm. Manufacturing Facility and Plant Evaluation Performed an on-site assessment of a pipe manufacturing facility to determine operational viability. Key assessments made on mechanical integrity and reliability of the process equipment, technical understanding and organizational strength of facility personnel, and related operational issues. Midstream Acquisition Due Diligence Assisted energy distribution company with due diligence for potential transaction involving gas gathering and processing assets located in the Permian Basin. Assets evaluated included over 4 of 12

5 4,000 miles of gas and liquid pipelines, four gas processing plants, and multiple gas treating plants. Participated in data room reviews and management presentations with a focus on commercial, operational, and technical evaluations of midstream systems. Developed comprehensive economic model of the integrated gathering and processing assets that was used to determine valuations and evaluate key sensitivities. Natural Gas Pipeline and Processing Plant Due Diligence Assisted an electric utility in its merger with a gas transmission and distribution company. Inspected pipeline and processing facilities and reviewed natural gas and natural gas liquids supply and marketing issues. Conducted operations review and an analysis of staffing levels. Oil Sands Downstream Integration Venture Assisted a producer of Canadian oil sands in assessing potential joint venture partners and refinery acquisition targets for processing diluted bitumen in the U.S. Conducted modeling and analysis of prospective refineries and advised the client on likely capital expenditures required for processing increasing volumes of diluted bitumen. Performed technical due diligence, assisted with cash flow valuation analysis, and supported negotiations. Refinery Valuation and Due Diligence Prepared an analysis of refining and marketing assets for a company that was considering acquisition of shares of a refining and marketing business located in South Korea. The analysis included refining and marketing economics, and due diligence of the facilities. Refinery Acquisition Planning On behalf of an acquisitive client, developed a summary of the U.S. refining business to focus on the supply/demand and competitive forces within the market. Provided information regarding historical U.S. refinery M&A transactions and a summary of typical due diligence focus items. Screened several potential acquisition candidates and developed a shortlist of opportunities which appeared to best align with the strategic objectives of the client. Technical Review Performed technical review of chlor-alkali and calcium chloride processes and project plan on behalf of prospective lender. Reviewed the process design packages for the chlor-alkali and calcium chloride production facilities and provided opinions regarding the selected processes and 5 of 12

6 their technical compatibility. Reviewed the project schedule and cost estimate for the facilities and provided input to the prospective lender regarding the appropriate level of contingency. Evaluated the contracting strategy and project execution plan and provided opinions. U.S. Refining and Marketing Strategy Advised a client on developing strategic options as it relates to future participation in the U.S. refining and marketing sector. Developed scenarios and assessed the medium term outlook for refining and marketing in the U.S. to support client objectives. Prepared short list of potential candidates for acquisition, and developed case studies and recommendations related to post merger integration activities. Advised client on appropriate timing for executing strategic objectives. Refinery Analysis For a prospective investor, provided analysis and commentary on the relative competitiveness of a targeted refinery, explaining the fundamental basis for its competitive position. Refinery Operations Snapshot Provided client with an estimate of actual crude runs by grade, product yields, and operating costs for a European refinery in 2007 based on our proprietary PRISM refinery database and simulator. Process Plant Leasehold Settlements Assessed the market value of residual operating interests held by a major financial entity in several leased chemical processing facilities. Each engagement included an ongoing advisory role pursuant to successful negotiations for sale of the institution's ownership interests. NGL Pipeline Due Diligence Reviewed data presented by a potential NGL pipeline seller on behalf of a potential buyer. The review focused on mechanical integrity and other safety issues. Gas Gathering and Treating Due Diligence Performed due diligence of West Texas natural gas gathering and treating system. Reviewed contracts and facilities, assessed competition, developed economic model, and estimated market value of assets. Petroleum Refinery Due Diligence Prepared a due diligence report on a full conversion refinery, including a review of regional crude 6 of 12

7 oil supply and regional products markets. Reviewed refinery operations, including high level assessments of refinery safety and environmental performance. Developed economic model of refinery and estimated market value. Due Diligence of a Lube Re-Refining Facility Conducted a due diligence analysis of technical and economic features of a lube oil re-refining plant involving a potential acquisition. Gasoline and Diesel Terminal Due Diligence Performed technical due diligence for terminal assets on behalf of financial firm. Visited the facilities and reviewed relevant documentation to advise the client on issues concerning the operability, safety, and physical conditions of the facilities and potential future maintenance and capital costs. Refinery Economic Analysis Prepared due diligence analysis of refinery technical and economic performance to support a potential working capital loan. Refinery Technical Review Provided a technical review and forecast of cash flows for a refinery acquisition candidate. Condensate Gathering System Due Diligence Assisted client with engineering due diligence on a Texas condensate gathering system focusing on pipeline mechanical integrity issues. PADD 1 Refining Study Provided a competitiveness analysis of refineries located in U.S. PADD 1, U.S. Virgin Islands, and Eastern Canada. Developed a price forecast and historical supply and demand balance. Provided a competitive ranking of a prospective acquisition of a refinery in the region being considered by the client. Refinery Due Diligence Assisted financial client with a due diligence study of a European Refinery. Visited the site and received briefing from refinery management. Developed cash flow model of historic and projected operations. Tuned cash flow model to match past four year's of operations and cash flow results. Developed five year price forecasts for crude oil and refined products in Europe. Reviewed 7 of 12

8 operating and maintenance expenses. Crude Oil Pipeline System Due Diligence Supplemented the client's team performing due diligence as part of a potential transaction regarding a crude oil gathering and mainline pipeline system. Our focus was on the engineering aspects of new facilities and facilities under construction. We provided an opinion on whether the new facilities, and the facilities under construction, appeared to be designed to applicable industry specifications. Refining and Marketing Privatization Assisted a state-owned integrated oil company in Central Europe in completing a strategic planning study for its downstream refining and marketing business. The study considered potential markets and pricing for crude oil and refined products. Opportunities to optimize the operation and logistics of the company's refining and marketing system were evaluated in view of maximizing the value of the assets prior to privatization. Reorganization of Crude Oil Trading Business Analyzed crude trading business for potential reorganization. M&A in the Cement Industry Performed acquisitions (share and asset) with hands on accountability for economic valuations, financial and market analysis, development of strategic rationale, approval documentation / presentations, deal negotiation, due diligence, legal agreements, and management and integration planning. Privatization of Olefins Plant Evaluated an olefins plant for competitiveness in operating costs, yields, feed supply, and product marketing. Identified and documented strengths and weaknesses and presented the key initiatives, which would be needed to ensure a successful transaction. Estimated the fair market value. Product Terminal and Transmix Processing Valuation Physical asset appraisal and business valuation of a refined product terminal and transmix processing facility. Estimated the replacement cost and deferred replacement value of the physical assets to provide a depreciation basis for taxes. Valued the business enterprise using a discounted cash flow approach based on an analysis and projection of transmix processing and product 8 of 12

9 terminal activities. Refinery Valuation and Synergy Analysis On behalf of two international refining companies, investigated and estimated the potential value of synergies that might be realized upon the combination of the two refineries. Provided indication of value capture, based on criteria provided by companies. Terminal Acquisition Due Diligence Support Conducted a review of fuel oil and asphalt terminal assets in support of a potential acquisition. Provided input and recommendations as to the overall quality of the assets, including a review of previous expenditures and maintenance records. Refinery Risk Assessment Assessed the technical and commercial risks inherent in each of several refineries owned by a U.S. refining company. Product Pipeline Terminal Valuation Prepared a terminal valuation based on a discounted cash flow analysis of transmix and terminal businesses and an appraisal of the physical assets. Polypropylene Plant Due Diligence Support Provided technical due diligence support for a moth-balled polypropylene plant located in Egypt. Evaluated capacity, historical utilization and mechanical availability and other factors. Refinery Due Diligence Evaluated the condition of refining assets for a potential acquisition. Addressed potential "fatal flaws" regarding the acquisition of a topping refinery. Provided support in evaluating the potential cash flow for the refinery. Refinery Screening and Evaluation Provided cash flow forecasts and indicative transaction values for select target refineries using PRISM charges and yields and client price forecasts. Natural Gas Midstream Due Diligence Conducted due diligence on gas gathering assets in East Texas for a prospective purchaser. Inspected facilities, reviewed pipeline and facility construction records, confirmed regulatory status, evaluated pipeline integrity management program, and assessed process safety. 9 of 12

10 Strategic Review of Refining Portfolio For a large integrated refiner and marketer, assessed the historical performance of each refinery in the company's system, and evaluated key benchmark metrics against various selected peer groups. Reviewed each refinery's competitive position and highlighted the key factors that differentiated its performance. Quantified the performance gaps on a dollar-per-barrel basis, attributed the gaps to controllable or structural factors, and made recommendations for improving the controllable gaps. Wyoming Refinery Appraisal Fair market appraisal of a refinery including connecting crude and products pipelines and storage assets to support debt financing. Project included income valuation with forecast prices, discounted cash flows, and replacement cost estimates for the refinery as well as the pipeline and storage assets. PRISM Refinery Data Provided refinery capacity, throughput, product yield, and cash flow estimates for two European refineries in support of preliminary acquisition discussions. Refinery Acquisition Screening and Valuation Provided refinery modeling, valuation and M&A support for a client that was considering a refinery acquisition. Crude Oil Pipeline Due Diligence Provided technical, commercial, and market due diligence for acquisition of pipeline transportation rights in Latin America. Carried out a technical review of the oil pipeline and pump station facilities. Reviewed the tariff setting mechanism and analyzed key inputs. Developed a tariff model and ran sensitivity scenarios to predict future pipeline tariffs. Carried out regional market study to compare alternate transportation modes (pipeline versus truck) and reviewed forecasts for crude oil production and transportation. Crude Oil Pipeline System Due Diligence On behalf of an investment group, provided technical and operational due diligence of an interstate (FERC regulated) crude oil pipeline system. Our focus included the review of asset integrity, design, system capacity, and operating costs of an existing asset and the design, project execution 10 of 12

11 plan, schedule, cost estimate, and projected operating costs of a proposed pipeline. LNG Due Diligence On behalf of potential offtakers and equity investors of one train, Baker & O Brien performed a technical due diligence and risk assessment of a two-train liquefaction project, including common use of certain existing regasification facilities. Work completed during the development phase of the project involved the evaluation of pre-completion risks and post-completion risks, including a review of planned and existing facilities. CAPEX, contractor capabilities, construction schedule duration, and OPEX were reviewed for appropriateness and risk of overrun. Subsequent follow-up work included a review of an Open Book Estimate (OBE), a project risk evaluation (reviewed and quantified pre-fid and post-fid cost and schedule risk), and an assessment of the project s draft environmental impact statement (EIS). Logistics services company assessment Provided an independent financial and commercial assessment of a logistics services company that our client was considering purchasing. Condensate Splitter Due Diligence Conducted asset due diligence activities: inspected facility under construction; provided market incentives, operating costs, risk overview, and staffing recommendations for successful acquisition of condensate splitter and associated logistics. Refinery Due Dilgence Assessment Provided an initial assessment of a Gulf Coast refinery for possible acquisition by the client. Provided estimated refinery yields and profitability. Refined Products Terminal Study To support a client's due diligence efforts for a potential petroleum products terminal acquisition, undertook a market study to evaluate the current refined products supply and demand balance on the U.S. Gulf Coast. Key market drivers were identified which could impact future market growth. Terminal Due Diligence Provided technical due diligence support for a large terminal acquisition opportunity involving approximately 50 terminals, 700 tanks, and 30MMbbls of storage. Condensate Splitter Due Diligence 11 of 12

12 Conducted asset due diligence activities: (1) inspected facility under construction; (2) provided market incentives; (3) operating costs; (4) risk overview; and (5) staffing recommendations for successful acquisition of condensate splitter and associated logistics. Condensate Splitter Market Study Developed market study and economics for a "grassroots" Eagle Ford condensate splitter located in Corpus Christi. Evaluated alternate locations and presented to CEO and management. Potential Refinery Acquisition On behalf of a prospective buyer, evaluated a Northern European refinery as a potential acquisition target. Determined the current physical condition of the refinery, its existing processing capability, and the potential for expansion and upgrade. Developed an economic and financial model that was used by client to prepare its tender offer. 12 of 12