Fund II Investments
East Texas Oil & Gas
East Texas Oil & Gas, LLC (“ETOG”) was formed to pursue oil and gas exploration and development in
East Texas. ETOG is managed by a team with a combined 150 years of experience in the East Texas
basin. The two main principals, Eddy Pearson and Ray Weaver, were previously key members of T-Bar-X
Limited Company, where they were integral in building T-Bar-X from a small private company to a major
player in the southwestern region of the East Texas basin.
Quality Magnetite
Quality Magnetite, LLC was formed to acquire the assets of Akers Magnetite, Inc. and Akers Supply, Inc.,
which are West Virginia magnetite distribution businesses based in Ceredo and Matewan,
respectively. Quality Magnetite will serve over 60 coal preparation plants in Virginia, Kentucky, Ohio,
and West Virginia. Magnetite is a form of iron ore that is used in cyclones in coal preparation plants to
separate coal from ash. Primary customers include Massey, Arch, TECO, International Coal Group and
CONSOL.
The Company sold approximately 80,000 tons of magnetite in its first twelve months, with the total
market size for domestic use of magnetite in coal preparation in the United States being approximately
270,000 tons per year. The Company has 27 employees, 20 tractor trailers, and two processing facilities
located in Kenova, WV. The business model includes purchasing magnetite from an importer, storing it,
drying it, and trucking it to the customer.
Chase Power Development
Chase Power Development, LLC (“Chase”) was formed to pursue electric power generation and related
development projects primarily in Texas. Chase is managed by John Upchurch and Kathleen Smith, each
a degreed engineer and who has worked in project development throughout his/her career while with
large merchant energy corporations (most recently Duke Energy Generation Services, Inc.).
Through its subsidiary, Las Brisas Energy Center, LLC (“Las Brisas”), Chase has filed an air permit
application with the Texas Commission on Environmental Quality (“TCEQ”) for a 1200 megawatt
capacity solid-fuel fired power generation facility located on land owned by the Port of Corpus Christi
Authority. Las Brisas will utilize circulating fluidized bed boiler technology, which when combined with
certain emission controls technologies is considered by the EPA as ‘best available controls technology’.
The primary feedstock will be petroleum coke, a by-product of crude oil refineries that is typically
shipped globally to cement kilns and other industrial burners utilizing little or no emission controls. Las
Brisas will provide base-load power to off-takers locally as well as in the growing regions of central and
south Texas. Chase and Quintana have attracted a qualified team of external experts to assist Las Brisas
in its development efforts, including legal counsel and RPS JDC for air permit application, and Bechtel
Power Corporation for engineering, procurement and construction, among others.
Genesis Energy LP
Genesis Energy, L.P. (AMEX: “GEL”) is a diversified midstream energy MLP engaged in four business
segments. The Pipeline Transportation Division is engaged in the pipeline transportation of crude oil
and, to a lesser extent, natural gas and carbon dioxide. The Refinery Services Division primarily
processes sour gas streams to remove sulfur at refining operations, principally located in Texas,
Louisiana and Arkansas. The Supply and Logistics Division is engaged in the transportation, storage and
supply of energy products, including crude oil and refined products. The Industrial Gases Division
produces and supplies industrial gases such as carbon dioxide and syngas. GEL’s operations are
primarily located in Texas, Louisiana, Arkansas, Mississippi, Alabama and Florida. Substantially all
revenues are derived from services provided to integrated oil companies, large independent oil and gas
or refinery companies, and large industrial and commercial enterprises.
Quintana E&P Argentina
Based in Buenos Aires, Argentina, Quintana E&P Argentina (“QEPA”) is comprised of a team of five
individuals with a combined 84 years of experience in the oil and gas industry of Argentina. QEPA was
formed to pursue oil and gas exploration and development within the San Jorge, Neuquén, and Cuyo
basins in Argentina.
Led by CEO, Jose Ronchino, the principals of QEPA were key management team members of Petro
Andina Resources, Inc. (“Petro Andina”), a publically traded Canadian E&P company with operations in
Columbia, Trinidad & Tobago, and Argentina. While at Petro Andina, the QEPA principals were
responsible for the discovery and development of the largest oil discovery in Argentina in 18 years and
played an integral role in building Petro Andina from a small private company with seed capital of
C$10.3mm to a legitimate, publically traded player with a market capitalization of C$545mm. In
November 2009, Petro Andina completed the sale of their business to Pluspetrol for C$545mm.
Completion Industrial Minerals LLC
Completion Industrial Minerals, LLC (“CIM”) is a developmental project to construct, own and operate a
500,000 ton/year frac sand processing plant in Marshfield, WI. The initial plant capacity will be 350,000
tons/year with an expansion to 500,000 tons/year planned by year two. The site and facility can
ultimately be expanded to 1,000,000 ton/year if market conditions warrant. The plant will produce
Ottawa White frac sand focused on the most common sieve sizes used in the oil and gas service
industry; specifically 20/40 and 40/70 mesh sizes. Approximately 47 million tons of raw feedstock sand
with an estimated 36% product yield (~33 year reserve life) has been contracted at multiple locations
within a 15 mile radius of the plant site. CIM has also signed off-take agreements with key market
participants for approximately 80% of the plant’s 2011 capacity.
Fund I Investments
AmerCable Incorporated
AmerCable Incorporated develops, manufactures and sells highly-engineered, jacketed electrical cable
products, cable assemblies and customer-driven solutions for power, instrumentation and control
applications for use in severe operating environments. AmerCable holds leading market positions in its
targeted North American niche markets, which include marine and offshore drilling for oil and gas
exploration and production, as well as underground and surface mining. AmerCable has 370 employees
and is headquartered in El Dorado, Arkansas.
Consolidated Oil Well Services LLC
Q Consolidated Oil Well Services, LLC (“COWS”) is a pressure pumping service provider offering
cementing, fracturing, acidizing and water hauling services in the Cherokee, Forest City and Powder
River Basins. With a fleet of 140 trucks/tractors, 64 trailers, and 48 pick-up trucks, COWS provides
services to roughly 500 customers, including Yates Petroleum, Newfield and a number of smaller
exploration and production companies. COWS employs approximately 175 employees in 9 field offices:
Bartlesville, OK, Cushing, OK, Oakley, KS, El Dorado, KS, Ottawa, KS, Eureka, KS, Thayer, KS, Gillette, WY
and Worland, WY.
Cypress E&P Corporation Eaglewood Drilling Program
Cypress E&P Corporation is an oil and gas exploration and production company formed in 1984 by two
principals, Robert W. Beardsley and Larry E. Cochran. Both began their careers with Shell Oil Company
and have more than 30 years experience in engineering and exploration disciplines. Cypress currently is
generating and drilling prospects primarily in the deep, highly pressured Wilcox trend of the Texas Gulf
Coast. These wells are in the 10,000' to 17,500' depth range and are targeting 3D, AVO, and velocitybased prospects. QEP is involved as a 10% working interest owner in the Eaglewood Area Participation
Agreement, which includes 700 square miles of land in both Fort Bend and Wharton Counties, Texas
covered by 3D seismic surveys acquired from Seitel. Under the Eaglewood Agreement, Cypress and its
partners plan to utilize this 3D data set to identify and drill exploration prospects within the Eaglewood
Project Area targeting the Wilcox, Cook Mountain, and Yegua formations.
Directional Drilling LLC
Q Directional Drilling, LLC (“DDC”) offers a complete package of premium drilling services, including
directional, horizontal, under-balanced drilling, measurement-while-drilling, gyroscope, survey and wireline services to large and mid-size independent oil and gas producers. DDC provides other services,
including directional drilling tool configuration, well site directional drilling supervision and guidance,
new well and reentry drilling, steerable drilling and logging-while-drilling services. DDC is headquartered
in Willis, Texas with sales and/or service facilities in Midland, Texas, Casper, Wyoming and Denver,
Colorado.
Deep Gulf Energy LP
Deep Gulf Energy, L.P. (“DGE”) is a deepwater, Gulf of Mexico, oil and gas exploration and production
company. DGE’s strategy is to acquire, operate and develop small, stranded, previously-discovered but
undeveloped deepwater fields that are viewed by the major oil companies (typically) as non-core assets
because of their size and/or distance to host production facilities.
Deep Gulf Energy II LLC
Deep Gulf Energy II, LLC (“DGE II”) is a deepwater Gulf of Mexico, oil and gas exploration and production
company. DGE II’s strategy consists of spending two-thirds of its efforts to acquire, operate and develop
small, stranded deepwater fields that had previously been discovered but not developed by major oil
companies and which, because of the size of the fields and/or the proximity to their production facilities,
are viewed as non-core assets. DGE II will spend the remaining third of its efforts exploring for oil and
gas in previously unexplored portions of the deepwater Gulf of Mexico.
Texas Energy Future Co-Invest LP
Energy Future Holdings Corp. (“EFH”) is a Dallas-based energy holding company, with a portfolio of
competitive and regulated energy subsidiaries, primarily in Texas, including TXU Energy, Luminant and
Oncor. TXU Energy is a competitive retailer that provides electricity and related services to more than 2
million electricity customers in Texas. Luminant is a competitive power generation business, including
mining, wholesale marketing and trading, construction and development operations. Luminant has
17,500 MW of generation in Texas, including 2,300 MW of nuclear and 7,200 MW fueled by coal. An
additional 800 MW of coal-fueled generation capacity is under construction and is expected to begin
commercial operation in 2010. Luminant is also the largest purchaser of wind-generated electricity in
Texas and fifth largest in the United States. Oncor is a regulated electric distribution and transmission
business that uses superior asset management skills to provide reliable electricity delivery to consumers.
Oncor operates the largest distribution and transmission system in Texas, providing power to more than
three million electric delivery points over more than 102,000 miles of distribution and 15,000 miles of
transmission lines. While Oncor is a subsidiary of EFH Corp., Oncor reports to a separate and
independent board.
Falcon VPP LP
Falcon VPP, L.P. is an entity that owns a volumetric production payment (“VPP”) conveyed in the form of
a limited term overriding royalty covering 71.2 Bcfe of reserves owned by Chesapeake Energy Corp.
(“Chesapeake” or “CHK”) located in Zapata, Webb and Hidalgo counties in South Texas. The 71.2 Bcfe
VPP volumes will be delivered over a 7.5 year period and are underpinned by 210 Bcfe of PDP, PDNP and
PBP reserves underlying the leases and wells to be burdened by the overriding royalty interest. The VPP
assets include interests in approximately 825 wells which are spread across approximately 1,500 square
miles. The wells are producing from gas-weighted conventional formations and represent the majority
of Chesapeake’s interests in the region.
Integrated Downhole Solutions LLC
Integrated Downhole Solutions, LLC (“IDS”) was formed to meet the increasing demand of mud motor
rental needs of directional and performance drilling companies. IDS will provide all service and repair
work for the motors. The mud motors are being built using bearing sections from Ashmin (under a new
license) and power sections from Weatherford and Dyna-Drill. IDS has utilized Q Directional Drilling, LLC
(DDC) for initial back-office functions to minimize overhead and reduce start-up expenses prior to
building out a complete staff of employees. Customers for the mud motor rentals include independent
drilling service providers such as Professional Directional, Sharewell, Crescent, Downhole Drilling
Services, and DDC. At the onset, it was estimated that 100% of IDS’s customers will be directional
drillers, with a target of 75% directional drilling and 25% performance drilling going forward. Currently,
IDS has approximately 90 motors in its fleet.
Irion Minerals LLC
Irion Minerals is an early stage upstream oil and gas investment. The project, which is located 90 miles
southeast of Midland, TX, includes prospective acreage surrounding existing Wolfcamp formation
production. The opportunity is focused on a conventional resource play covering approximately 15,000
acres in Irion County, Texas. The Prospect lies within the Permian Basin of West Texas and is targeting
the Wolfcamp Formation at around 6,800 – 7,000 feet of depth as the primary objective.
Kopper Glo Fuel Inc.
Kopper Glo Fuel, Inc. is a Central Appalachian surface mining operation located near Knoxville,
Tennessee that produces high quality steam coal. Kopper Glo currently sells about 650,000 tons of low
sulfur, high btu coal annually and has a sales contract in place with a major utility with 4 years
remaining. Approximately half of the coal produced comes from a contract miner, with the remaining
half coming from company-managed equipment and personnel. Management estimates coal reserves
on the property to be over 16 million tons.
MWD Services LLC
MWD Services, LLC (“MWD”), based in Lafayette, Louisiana, is an independent provider of
measurement-while-drilling services to the directional drilling market. MWD currently has a fleet of 26
retrievable MWD tool systems and is servicing the directional drilling markets in Louisiana and North
Texas (Barnett Shale). MWD’s tools are utilized by directional drillers to track the compass direction,
inclination (measured in degrees from vertical) and gamma ray response of the formation down hole.
This information allows the directional driller to know the current location and direction of the drill bit
while drilling directional or horizontal wells, as well as provides information about the lithology of the
formation being drilled.
Prize Petroleum LLC
Prize Petroleum, LLC consists of oil and gas related assets in East Texas, North Louisiana, and Michigan.
Daily production is approximately 1,150 boe, comprised of ~93% oil. The assets are characterized by
stable, shallow decline production (projected decline of 2.9% in 2009) and are 100% operated by Prize.
The combined original oil in place for the three fields is approximately 459 million barrels (198 million
barrels of which is estimated to be recoverable) and the cumulative production to date has been
approximately 180 million barrels. The assets include 140 producing wells across 12,000 net acres. The
producing reserves have a reserve life of 26 years, and the total proved reserves have an estimated
reserve life of 34 years. In 2010, the Company replaced the existing management team to change the
strategic direction of the Company with a team comprised primarily of Redman Resources employees
and Redman endorsed hires QEP believes that Redman Resources has the experience and track record
to maximize the value imbedded in Prize’s existing asset base, as well as provide for accretive growth
through a focused, acquisition-oriented business development program.
Quintana WellPro S.A.
Quintana WellPro (“QWP”) is a workover/drilling services company focused on the Argentine oil and gas
market. QWP was formed by QMC and Tom Murphy. As a contract drilling and well service business,
QWP provides rigs and crews to exploration and production companies so they can drill and complete
an oil or natural gas well. One of QWP’s affiliates, International Petroleum Equipment (“IPE”), primarily
owns and leases rig parts to QWP. Another of QWP’s affiliate companies, Transportes Aguila (“TA”),
provides trucking services to drilling/workover rigs throughout Argentina and South America. IPE and
TA were also formed by QMC and Murphy. QWP, IPE and TA are collectively referred to as the
“Company”.
Stone Mountain Resources Ltd.
Stone Mountain Resources, Ltd (“SMR”) is a privately held exploration and production company formed
by QMC and First Reserve Corporation in January 2005. SMR was formed to support Harvey
Klingensmith, an experienced and well-regarded exploration and production executive, and a team of
technical professionals in actively pursuing Canadian exploration and production opportunities.
Taggart Global LLC
Taggart Global, LLC specializes in the design, engineering, construction and operation of coal
preparation plants and material handling systems worldwide. Taggart manages and provides the
majority of its services from its offices in Pittsburgh, Pennsylvania, Johannesburg, South Africa, and
Beijing, China. Taggart currently has operations in North America (74%), China (13%), South Africa (11%)
and other (2%), and has operated in the past in Russia, Brazil, and Trinidad. Taggart’s core business is
engineering and construction; future growth is predicated on Taggart’s plant operations initiative and
international expansion. The operations initiative involves building and operating coal preparation
plants and emissions reduction systems at coal-fired utilities. Taggart currently has 400 employees on
payroll and approximately 380 leased employees.
Talen’s Marine & Fuel LLC
Talen’s Marine & Fuel, LLC is a domestic fuel supplier, with eight leased and owned marine docks
strategically located along the Gulf Coast and Intracoastal Waterway. Talen’s utilizes 14 fuel barges, 13
tug boats, 24 trucks, and one bulk plant facility to provide customers with refined products (primarily
diesel, but also jet fuel and gasoline), lubricants, specialty chemicals, and other ancillary services (trash
hauling, fresh water, food and beverage and personnel staging for offshore work, among others). A
typical dock facility will include fuel and lube storage and distribution capability (dockside and via truck
rack); several trucks to service local land-based demand; one or two small barges for “midstreaming”
(providing fueling services to ships on the water); and infrastructure at the dock to handle the dockside
fueling, lubricant, water, and trash needs of OSVs (Offshore Service Vessels) servicing the Gulf of
Mexico.
Team CO2 LLC
Team CO2, LLC provides onsite carbon dioxide fracturing and stimulation treatments to oil and gas
operators. The Company was formed by Randy Decker, Mike Hyman, and John Ridge in April 2001 to
provide a superior well stimulation treatment for exploration and production producers. The Company
is headquartered in the heart of the Permian Basin in Midland, Texas, and services an area with a radius
of approximately 250 miles.
Download

138996_Portfolio Company Business Descriptions