Financing Solutions
for the
Petroleum Industry
Cat® Financial
November 2009
Cat Financial Services
 Wholly-owned subsidiary of Caterpillar Inc.,
world’s largest manufacturer of construction
and mining equipment, diesel and gas
engines, industrial gas turbines
 28 years in business
 $30B portfolio
 Offering financial products to customers
who purchase equipment manufactured by Caterpillar
– Equipment leases and loans
– Corporate finance debt products including syndicated bank loans
– Project and construction finance
 Industries: Mining, Construction, Electric Power, Marine, and Petroleum
Cat Financial Services
 Dedicated Team: Petroleum Industry
– In 2007, Cat® Financial dedicated a team of professionals to focus on
petroleum industry
– $900 million already committed to the sector
– The desire is to grow to $3 billion by 2012
 To Provide Financial Products for Select Industries:
– Drilling and Well Servicing
– Natural Gas Compression: contract services, gathering, processing,
storage and transmission
Cat Financial Services
 Equipment Loans: Well Servicing and Drilling
– Equipment type(s): onshore drill rigs, workover rigs, FRAC trailers, coiled tubing
units, wireline trucks powered by Cat engines
– Term: 3 to 5 years
– Down payment: 20% or more
– Minimum transaction size: $1 million
– Minimum EBITDA: $10 million (may be lower if an affiliate of larger entity)
 Recent Transactions:
– $25 million financing for two new 1500 hp Cat powered rigs. Owner is a public
international oilfield service company. Rigs are under contract in the Haynesville
Shale.
– $9.6 million financing to rebuild and repower a 1000 hp drill rig for use by proprietary
drilling company of private E&P company operating in West Texas. Rig equipped
with new 2 x C15s.
– $2.3 million financing for three new workover rigs equipped with a Cat C15 diesel
engine and TH-35 transmission. Private operator in East Texas.
* Final customer pricing and down payment is based on risk assessment and is subject to internal credit approval by Cat Financial
Cat Financial Services
 Equipment Leases and Loans: Natural Gas Compression
–
–
–
–
–
Equipment type: natural gas compressors powered by Cat engines
Term: 5 to 10 years
Security deposit or down payment: 0-25%
Minimum transaction size: $1 million
Minimum EBITDA: $5 million (may be lower if an affiliate of larger entity)
 Recent Transactions:
– $75 million operating lease for purchase of new Cat powered gas compression
equipment. A portion of the financing is available for sale and leaseback of recently
acquired fleet. Lessee is a public contract compression company.
– $45 million operating lease for purchase of new Cat powered gas compression
equipment. Lessee is a private contract compression company.
* Final customer pricing and down payment is based on risk assessment and is subject to internal credit approval by Cat Financial
Cat Financial Services
 Syndicated Bank Loans: Non-Investment Grade and Highly Leveraged
Companies
Industries:
– Natural Gas Transmission
– Natural Gas Storage
– Natural Gas Compression
– Drilling and Well Servicing
Loan Purpose:
– Project and construction
– General corporate
– Capital expenditure
– Merger and acquisition
Parameters:
– Longstanding Caterpillar petroleum customer
– Or, first time customer purchasing new fleet
powered by Cat engines
– Public and private ownership
– Credit ratings: BBB- or lower, or non-rated
companies
– Term: 3 to 7 years
– Minimum transaction size: $10 million
– Minimum EBITDA: $5 million
– Indicative pricing: 3 month Libor + 350 bps or
higher (reflects market conditions as of
November 2009)
* Final customer pricing and down payment is based on risk assessment and is subject to internal credit approval by Cat Financial
Cat Financial Services
 Syndicated Bank Loans: Select Borrowers by Industry
Well Service and Drilling:
– MidCon Compression, L.L.C.
(Chesapeake Energy)
– Parker Drilling Company
– Cal Dive International, Inc.
– Trinidad Drilling Ltd.
– Key Energy Services, Inc.
– Pioneer Drilling Company
– Saxon Energy Services Inc.
Contract Compression Services:
– CDM Resource Management LLC
– USA Compression Partners LP
– J-W Operating Company
– Mustang Gas Compression
– Natural Gas Compression Systems, Inc.
Natural Gas Storage Projects:
– Arcadia Gas Storage, LLC
– Bobcat Gas Storage
– Monroe Gas Storage Company LLC
– Pine Prairie Energy Center LLC
– SGR Holdings, L.L.C.
Natural Gas Gathering, Processing,
and Transmission:
– Atlas Pipeline Partners, LP
– Continental Energy Systems LLC
– Enterprise GP Holdings L.P.
– Myria Acquisition Inc. (Natural Gas
Pipeline Company of America)
– Martin Midstream Partners L.P.
– Regency Energy Partners LP
Cat Financial Services
What makes us different?
 Cat Financial is solely devoted to promoting Caterpillar
products and supporting our customers’ growth
 We originate transactions for our own balance sheet.
Committing our own money. We do not act as a placement
agent or broker.
 While many lenders are divesting their portfolios in the
petroleum sector, Cat Financial seeks to grow its portfolio.
Rarely do we have customer or portfolio concentration issues.
 Your company will have direct communication and coordination
through a dedicated and knowledgeable account manager.
Caterpillar Financial
2009-2010
Buy Now Incentives
Natural Gas Compression Re-Value Program
Cat Access Account:
Petroleum Engine Overhaul Program
2009 Bonus Depreciation Tax Incentive
Natural Gas Compression Re-Value Program
 Do you currently own a fleet of Cat powered
natural gas compressors?
 Do you want to upgrade your fleet and buy new
in 2010?
Monetize the value of your existing fleet and use a portion of the
proceeds
as a down payment to buy new Cat powered equipment.
Cat Financial will:
 Provide you with the money to upgrade and refinance your existing fleet,
 Finance the new Cat powered fleet with a modest down payment, and
 Provide additional cash for operating needs.
Natural Gas Compression Re-Value Program:
Example
1. Customer seeks new equipment
– New Cat powered equipment to
expand and upgrade fleet
– Purchase price = $37.5 million
2. Cat Financial lends:
– $30 million to purchase the new fleet
– $20 million to refinance the existing
fleet
– Advance rate of 80% of equipment
value
3. Customer monetizes the value
of existing equipment
– Existing fleet of Cat powered
equipment with an orderly liquidation
value (OLV) = $25 million
4. End result
– Customer nets $12.5M in cash for
operations after a down payment of
$12.5 million
* Final customer pricing and down payment is based on risk assessment and is subject to internal credit approval by Cat Financial
Natural Gas Compression Re-Value Program
 Program minimum size $25 million. Value of new equipment
purchased must be >60% of loan amount. Qualifying
equipment must contain Cat engines.
 Cat Financial will require the loan to be secured by the
compression equipment.
 Our team of professionals is well versed in understanding the
restrictions often imposed by bank credit documents, including
limitations on additional debt, liens, asset sales, and
sale/leaseback.
 Most often we can find financial solutions that work within the
framework of these documents.
Cat AccessAccount
Use one account nationwide at any U.S. Cat
dealer to pay for parts, service, sales, and rentals.
Standard Rate: Prime +7%, 10% min. monthly payment
Special Program: Petroleum Engine Overhaul Program
 6 Months No Payments 0% Interest
 12 Equal Monthly Payments 0% Interest
 Program Term: Through June 30, 2010
 Qualifications:
– Caterpillar major engine overhauls (parts and labor) purchased from and conducted
by a Cat dealer. Engine must be used in petroleum application.
– Eligible engines include: Cat gas and diesel 6.25" bore, C-Series engines 15L and
up, 3400, 3500, and 3600 series products
– Cannot be combined with any other offer
2009 Bonus Depreciation Tax Incentive:
Some of the Requirements to Extend
Bonus Depreciation to 2010
 Asset is placed in service by 12/31/10 and costs more than $1 million
 Asset takes more than (or about) 1 year to be manufactured and placed in service (may
include time for design and development)
 Where the asset requires components like engines, these components are ordered
during the production period, delivered, and placed in service by 12/31/10
 The amount that would qualify for Bonus Depreciation is the cost incurred by 12/31/09,
including amount incurred for components purchased for manufacturing of the asset
 Qualified cost incurred is the amount taxpayer reports on its GAAP financial statement
(in case of an accrual basis taxpayer) or pays (in case of a cash basis taxpayer), and the
amount is more than 10% of the total cost of the property (excluding cost of any land and
preliminary activities such as planning or designing, securing financing, exploring, or
researching)
 Recovery period of the asset needs to be between 10 and 20 years, and the asset
qualifies for MACRS depreciation
Contact Information: Cat Financial
Person
Industry
Phone
Email
Martin Donner
Petroleum Sales
Manager
615-341-5078
Martin.Donner@cat.com
Alex Karwowski
Midstream and
Gas Transmission,
Compression
615-341-1082
Alex.Karwowski@cat.com
George Simon
Drilling, Well Service,
Compression
214-383-2967
George.Simon@cat.com
615-341-1044
Alexander.Tumanov@cat.com
Alex Tumanov
E&P, Gas Storage
Jeff Condo
Cat AccessAccount
469-362-6219
Jeff.Condo@cat.com
Hap Henley
Cat AccessAccount
615-341-5-66
Hap.Henley@cat.com
Information contained in this publication may be considered confidential.
Discretion is recommended when distributing.
Materials and specifications are subject to change without notice.
CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow” and the “Power Edge” trade dress, as well as corporate
and product identity used herein, are trademarks of Caterpillar and may not be used without permission.
LESW0017-00 (11/09)
2009 Caterpillar
All rights reserved.