NGP GLOBAL ADAPTATION PARTNERSCapital and Sponsorship for the Natural Resources Industry Since 1988
THE WATER/ENERGY NEXUS
JUNE 2013
– 23-year longevity
– 31% Gross IRR (21% Net IRR) since inception in 1988
– Top quartile performance since inception in 1988
– No senior leadership turnover
– Proprietary deal flow throughout platform
– Consistently applied investment process
Natural Gas PartnersUnparalleled Track Record
Offices: Irving, TX (Dallas); Houston, TX; Santa Fe, NM; Stamford, CT; Washington, DC
Confidential: Not for Reproduction or Distribution.
Francis J. HarveyRobert W. Jordan
Thomas R. PickeringJames R. Schlesinger
Paul D. WolfowitzPat Wood, III
Strategic Advisory Council
Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.Natural Gas Partners IX, L.P.
Mezzanine Debt Midstream In “Harvest” Period Focus Folded into NGP X
NGP MIDSTREAM
& RESOURCES, L.P.
NASDAQ: NGPC Total: $1.4 Billion
II, L.P.
Energy Technology Growth Capital─ Energy Efficiency─ Power Technologies─ Alternative Energy─ Oilfield Services Technologies
Total: $496MM
2004 2007
2008
2005
1988
1994
1995
1996
1998
2000
2003
2005
2007
$100 MM
$37 MM
$30 MM
$150 MM
$320 MM
$370 MM
$600 MM
$1,300 MM
$4,000 MM
$148 MM
$348 MM
NGP Natural Resources X, L.P.
2012$3,586 MM
Energy Assets and Services (>90%)─ Oil & Gas Resources─ Oilfield Services─ Pipeline and Processing
Other (up to 10%)─ Food & Agriculture─ Water Infrastructure & Services
Total: $10.5 Billion
FIR
M O
VE
RV
IEW
Founded in 1988, NGP Energy Capital Management is a Premier Investment Franchise in the Natural Resources Industry, Which Together With Its Affiliates Has Managed $13.0 Billion in Cumulative Committed Capital
22Note: Past Performance is not indicative of future results. See Performance Notes in the Appendix.
3NGP GLOBAL ADAPTATION PARTNERS
Interesting Water FactsW
AT
ER
FA
CT
OID
S
• Water is heavy (7 lbs/gal) and expensive to move
– Which makes it very local and leads to virtual water strategies
• Water has no substitute at any price
– Which makes it “perfectly price inelastic” (unlike energy and other natural resources)
• Water is becoming a much more constrained and limited resource
– There are many examples across the world of over-drafting of ground water
• Water can not remain a “free good”
– Prices continue to increase to reflect full value
– Higher prices should lead to better stewardship
4NGP GLOBAL ADAPTATION PARTNERS
The Water Value Chain in Fracing
• The owner/drilling customer is beginning to consider the entire water value chain
• (e.g. sourcing, transpiration, storage, Recycle /Reuse (clean brine and desal water) and disposal
• Flow back vs. produced water strategy changes with fracing activity
• Logistics is the primary valuation metric (reduce windshield time)
• Hub and spoke vs. empty back haul
• proven simple and reliable water solutions win the day…no silver bullet
• Solutions and strategy are different form by formation (Marcellus is very different from Eagle ford)
• Price does matter…but so does safety, reliability and good old fashion customer service
• Top down MSA’s without local relationships is a flawed strategy
5NGP GLOBAL ADAPTATION PARTNERS
SU
MM
AR
Y
• Water and energy are inextricably tied as critical global resources and fundamental to all economies
• NGP’s investment thesis is to partner with smart executive teams and bring both capital and domain expertise in energy and water sectors
• U.S. statesmen, Ben Franklin, stated “We will know the value of water when the well runs dry”
Summary
Founded in 1988, NGP Energy Capital Management is a premier investment franchise in the natural resources
sector
Santa Fe, NM100 North Guadalupe StreetSuite 205Santa Fe, NM 87501(505) 983-8400
Irving, TX125 East John Carpenter Fwy.Suite 600Irving, TX 75062(972) 432-1440
Stamford, CT1266 East Main Street6th FloorStamford, CT 06902(203) 504-5072
Houston, TX5 Houston Center1401 McKinneySuite 1025Houston, TX 77010(713) 579-5700
www.ngpenergycapital.com
NATURAL GAS PARTNERS • NGP GLOBAL ADAPTATION PARTNERS
Houston, TX811 Main StreetSuite 4200Houston, TX 77002
NGP MIDSTREAM & RESOURCES, L.P.
Houston, TX909 Fannin StreetSuite 3800Houston, TX 77010(713) 752-0062www.ngpcrc.com
NGPCNGP Capital Resources Company
Washington, DC1700 K Street NWSuite 750Washington, DC 20006(202) 536-3920www.ngpetp.com
NGPENERGY TECHNOLOGY PARTNERS
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