Transcript Slide 1
IPAA/COGA:
Rocky Mountain
Private Capital
Jonathan Farber
August 10, 2006
Confidential and Proprietary
www.lrpartners.com
Today
1. About Lime Rock
2. Three main issues in economics and governance
3. The Lime Rock Partners difference
Confidential and Proprietary
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About Lime Rock
Lime Rock Manages Four Funds with $1.3 Billion in Total
Capital Commitments
$850 million under management in Lime Rock Partners funds
Lime Rock Partners, $105 million, October 1998 inception,
12 investments
Lime Rock Partners II, $320 million, August 2002 inception,
16 investments
Lime Rock Partners III, $425 million, November 2004 inception,
11 investments to date
$450 million under management in Lime Rock Resources fund
Lime Rock Partners global network through four locations: Westport,
Connecticut; Aberdeen, Scotland; Calgary, Alberta; Houston, Texas
Lime Rock Partners focuses on growth equity investments of $10 million to
$75 million in companies in three sectors of energy industry: exploration and
production, energy service, and oil service technology
Lime Rock Resources acquires, operates, and improves oil and gas
properties in the United States
Confidential and Proprietary
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About Lime Rock
Lime Rock Partners Invests in Growing Energy
Companies That Stand Out From the Crowd
Exceptional management teams
Identifiable track records of meeting or exceeding goals
Proven ability to adapt to changing markets
History of closely aligning their interests with their shareholders.
Clear growth strategy
Clearly defined strategy to grow earnings through organic growth,
acquisitions, or savvy asset purchases
Strategies to create value upon exit
Attractive business niche
Competitive advantage in an attractive sub-sector of the energy industry,
whether it’s a region or an oil and gas basin
Strategic joint ventures
Confidential and Proprietary
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About Lime Rock
Team: Deep Interdisciplinary Expertise, Global Network
of Relationships, and Track Record of Success
Westport
Aberdeen
Jonathan Farber, Managing Director
Formerly at Goldman Sachs Investment Banking/Research
Lawrence Ross, Managing Director
Formerly Head of 3i Oil and Gas Team
John Reynolds, Managing Director
Formerly at Goldman Sachs Investment Research
Simon Munro, Director
Formerly at J.P. Morgan, Simmons
Mark McCall, CFO and General Counsel
Formerly at Lehman Brothers M&A
Rob Willings, Director
Formerly at Schlumberger, Simmons
Jeffrey Scofield, Vice President
Formerly at Harrison Lovegrove, Credit Suisse
Lime Rock
brings together
a global network
of relationships
from its four
locations
worldwide.
Greg Highberger, Analyst
Formerly at Credit Suisse
Calgary
Houston
John Clarkson, Senior Adviser
Formerly at Renaissance Energy
Tom Bates, Managing Director
Formerly at Schlumberger, Weatherford (CEO)
Will Franklin, Director
Formerly at Riverstone, Simmons
J McLane, Director
Formerly at Pioneer Natural Resources
Michael Teplitsky, Associate
Formerly at UBS
Barrett Schick, Analyst
Formerly at Lehman Brothers
Confidential and Proprietary
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Economics/Governance
There Are Three Main Issues in Economics/Governance
Control
Do the private equity private firm or firms have majority control and the
right to change management?
If the management team has majority control, do investors have structured
control over areas such as major acquisitions or liquidity events?
Management incentives
Typically, management incentives are promotes based on ROI hurdles: what
are the promote splits and what are the hurdles?
Valuation of management’s existing share in company
Security type
Common shares or securities with liquidation preferences
Confidential and Proprietary
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Economics/Governance
However, Economics/Governance Issues are Usually Less
Important Than Soft Issues
Yes, look at terms, but in many cases there won’t be a big difference in
financial terms or governance structures—do the math
We recommend instead five areas of focus:
Look at track record: have their portfolio companies made money for
investors and managers
Talk to their management teams: do they value the private equity firm
as a true investment partner
Judge them by their due diligence: a firm doing thorough due diligence
has the expertise to be good long-term partner
Ask them what relationships and expertise they will bring to help you
create value
Check on their industry knowledge: do they understand the energy
business
Confidential and Proprietary
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Lime Rock Partners Difference
Lime Rock Partners is a Different Kind of Investment
Partner
1. Creative and flexible approach
We structure every investment
differently—no “cookie cutter” deals
2. True investment partner
We add value to every investment
We never charge transaction or advisory
fees
3. Strong track record of value creation
Our investors and management teams
benefit from exceptional growth
4. Global strategy
Multi-sector and multi-region
5. Long-term view
Investment horizon is years, not quarters
Confidential and Proprietary
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