Energy Spectrum: Capital Portfolio Companies

Aspen Pipeline
Aspen Pipeline was formed in June 2006 with an initial investment in a small gas gathering system in Erath County, Texas. Since that time, Aspen has developed two other major projects. The first is a constructed biomass (wood-fired) electric power plant in East Texas. Aspen's other major project is Odessa Fuels, which involves a pipeline in West Texas to gather and deliver high nitrogen content natural gas to customers capable of directly burning the gas without nitrogen removal. Management continues to look for additional assets or development initiatives around this system while also pursuing opportunistic acquisitions and greenfield projects in Texas.

Aspen Pipeline II was formed in January 2008 with Aspen management to co-invest alongside Aspen Pipeline in Odessa Fuels. The Company also acquired a 50% interest in Robbins Community Power, a 50 megawatt biomass power plant in Illinois. Aspen II will refurbish the Robbins plant and convert it to run on wood waste and debris from the Chicago metropolitan area. Aspen II will own any additional future projects developed by the Aspen management team. A co-investment agreement has been designed to eliminate conflicts and was proposed by the General Partner and approved by the Advisory Committee of each ESC Fund. The co-investment structure requires that both Funds each sponsor 50% of the required project equity until such time as the initial Fund exhausts its ability to support the project, after which the subsequent Fund can account for 100% of the project.

C&J Specialty Rental Tools
In October 2006, Energy Spectrum Capital invested in C&J Specialty Rental Tools. C&J is a market leader for coiled tubing, pressure pumping and fracturing services with extensive relationships in its market area. Since ESC's investment with C&J closed, the company has expanded its operations significantly by opening a new coiled tubing facility in East Texas and adding fracturing fleets in South Texas. The new East Texas office has positioned the company to perform coil and frac work for some of the leading producers in the Haynesville Shale. Management is seeking to expand the business through further penetration of its core market and expansion opportunities in new frac markets as complementary services.

CERITAS Energy
CERITAS was formed in January 2005 with a strategy of acquiring and growing natural gas gathering and processing systems. CERITAS' first acquisition was a system in Liberty County, Texas, in March 2005. Management has been successful in attracting new gas to the system. A project to expand the system and add a 50 MMcfd processing plant was completed in 2006. The management team has also purchased significant midstream infrastructure in the Powder River Basin from Optigas and divested non-core assets to fellow portfolio company Laser Midstream.

In February 2008, Energy Spectrum Capital closed its initial investment in CERITAS II. The current management team of CERITAS Energy will manage the new CERITAS II and pursue new-build midstream projects, initially in the Rockies. CERITAS II is a partnership between ESC, CERITAS management, and Quantum Energy Partners (an energy-focused private equity fund that primarily backs upstream companies). It is anticipated that Quantum will direct the midstream deal flow generated by its upstream companies to CERITAS II, allowing Quantum to capture some of the midstream value its upstream companies produce while providing CERITAS II access to greater deal flow. The initial CERITAS II project development efforts are focused on midstream opportunities related to Ute Energy, a joint venture between Quantum and the Northern Ute Indian Tribe that operates in the Uintah basin.

Clear Creek Energy Services
Clear Creek Energy Services (CCES) was formed in June 2005. Clear Creek has existing assets in the Powder River (Wyoming) and Piceance (Colorado) Basins and is pursuing additional opportunities in other basins.

Forrest Drilling Company
In March 2006, Energy Spectrum Capital partnered with the Gungoll Family to form Forrest Drilling Company to support the construction of six medium-depth drilling rigs. The rigs of this Oklahoma City-based contract land drilling company all have 1,000-1,500 horsepower and are capable of drilling to 15,000-20,000 feet depths and in all formations. Forrest initially operated in Mississippi, Texas and Oklahoma and expects to add additional rigs through acquisitions of existing operating equipment plus new construction. The company currently operates seven deep drilling rigs which are all capable of drilling horizontally at 11,000-16,000 feet depths.

Frontier Midstream
Frontier Midstream was formed in March 2008 with a strategy of acquiring and/or building greenfield midstream development projects, initially located in the Fayetteville Shale, Marcellus Shale, Permian Basin and the Mid-Continent area. Frontier is led by the previous President & CEO of Frontier Field Services, LLC (a Fund II/III company), one of Energy Spectrum's most successful prior investments. The current Frontier management team includes several team members from the first Frontier entity and has a documented history of managing, building, and successfully exiting entrepreneurial oil & gas ventures. Frontier currently owns four gathering systems in the Fayetteville Shale in Arkansas and a gas plant and gathering system in the Texas Panhandle. In August 2009, the Company formed Frontier Gas Services, a new company owned 50% by Frontier Midstream and 50% by Tenaska Capital, in order to have more equity capacity to pursue one or more larger midstream acquisitions.

High Sierra Energy
In October 2006, Energy Spectrum Capital invested in High Sierra Energy. Based in Denver and structured as a private MLP, High Sierra is a diversified midstream services provider looking to expand its current operations by pursuing opportunistic acquisitions and development opportunities throughout the midstream value chain. The Company's operations include crude oil, liquids and refined products gathering, transportation and marketing.

Hoover Energy Partners
In May 2008, Energy Spectrum Capital closed on an initial investment in Hoover Energy Partners, LP to acquire and develop midstream assets with organic growth opportunities in Texas and the Mid-Continent. The President & CEO is an experienced midstream executive who most recently served as president of a private MLP in the midstream space. In November 2009, the Company acquired gathering and treating assets in West Texas, one of its target geographical areas.

Laser Midstream II
In November 2007, Energy Spectrum Capital closed on its initial investment in Laser II. The company was formed to pursue opportunities in the midstream gas business with a primary focus on acquiring and expanding under-utilized systems in mature areas. Laser II is led by the key management team from Laser I, which was a very successful portfolio company in Fund IV. Laser II continues to pursue several midstream project opportunities, all of which are consistent with ESC's lower middle market strategy oriented towards negotiated acquisitions and new-build approach to value creation. The Company continues to focus on expanding its operating footprint on the construction of a Marcellus Shale gathering system in northeast Pennsylvania and New York.

Midstream Energy Services
Midstream Energy Services (MES) was formed in January 2005 to capitalize on greenfield development opportunities primarily in the Mid-Continent area, while also pursuing acquisitions and construction projects in other commercially attractive regions. MES initially acquired a small gathering system in southern Louisiana to capitalize on organic growth opportunities. Management also purchased a gathering system and processing plant with helium recovery located in the panhandle of Oklahoma in March 2006. Currently, a newly constructed processing plant in the Texas Panhandle is flowing gas and is anchored by a major integrated producer.

Stonehenge Energy Resources
In November 2007, Energy Spectrum Capital closed on an initial investment in Stonehenge. Based in Denver, Stonehenge is focused on the design, construction and operation of new-build gas pipeline and treating projects in the Rockies and Mid-Continent. The Stonehenge principals currently operate a well-respected engineering and design firm that constructs midstream assets for many leading oil and gas producers. Stonehenge, backed by the Fund's equity, will allow the Principals to pursue turnkey "build, own, and operate" opportunities with their current client base and others. The Company is focused on expanding its operating footprint on the construction of a Marcellus Shale gathering system in northeastern West Virginia.

Texas Energy Midstream
In July 2008, Energy Spectrum Capital sponsored Texas Energy Midstream to acquire and develop midstream assets with organic growth opportunities in Texas, beginning in the Barnett Shale. The Company is constructing a gathering system and compression facility in Tarrant County, Texas, in the heart of the Barnett Shale. The Company is also pursuing additional midstream opportunities, particularly in the Barnett Shale and other basins in the southwest United States. The three Texas Energy Midstream principals have years of energy experience and extensive network contacts.

TransEdge Energy
In July 2007, TransEdge was formed to pursue opportunities primarily in the refined products pipeline and terminal sectors. The Company has integrated its first acquisition, Lewis Oil, a leading heating oil and propane distributor in northern New Hampshire, and continues to make operational improvements. TransEdge continues to be in discussions to acquire another leading distributor in the northern New Hampshire region that would allow it to increase its operating footprint in anticipation of pursuing at least one of their near-term acquisition targets. The company is also evaluating organic and acquisition growth opportunities around its assets in New Hampshire, while also pursuing other terminal and pipeline assets.

Tristate Midstream
Tristate Midstream LP was founded in November 2007 to acquire, develop and construct natural gas gathering and conditioning assets in Texas, Louisiana and Arkansas. The Company's first acquisition was a small natural gas gathering and compression system in Red River Parish, Louisiana (the Red River System) in a negotiated transaction. Since that time, Tristate has completed a number of system enhancements and expansion projects (including the Sabine Parish System) to enlarge its operating footprint. The Company has been successful in contracting for additional wells with existing producers and for wells with new producers in the heart of the active and prolific Haynesville Shale play.

In March 2010, Fund V experienced its first partial realization when Tristate sold their Red River System in the North Louisiana Haynesville Shale area to Energy Transfer Partners, LP. The sale does not include the Company's Sabine Parish, Louisiana assets and Management continues to pursue opportunistic acquisitions and greenfield projects in its target areas.

Velocity Midstream
Velocity Midstream was formed in October 2008 with a strategy of acquiring and/or building greenfield midstream development assets, initially located in East and Central Texas, Northern Louisiana, and Western and Southern Oklahoma. The Velocity management team includes three team members that have years of combined midstream and E&P experience and is well connected in the energy space. In July 2009, the Company closed on the acquisition of East Texas gas gathering assets from Berry Petroleum. Velocity is focused on optimizing and expanding its East Texas assets (including adding other producers) and acquiring additional midstream assets in its target areas.