Selected Realized Investments

Common Resources
Common Resources was a Houston-based independent oil and gas company focused on creating value through the drillbit in the Eagle Ford and Haynesville shales. Common was formed by the former executive management team of Spinnaker Exploration Company (NYSE: SKE), which sold to Norsk Hydro in December 2005 for $2.6 billion.

Since its formation in September 2007, the Company successfully acquired over 60,000 net acres in the Eagle Ford and Haynesville shale plays. Through successfully drilling numerous wells in both areas, the Common management team was able to establish a significant reserve base with substantial resource potential. In May 2010, Common closed the sale of its Eagle Ford assets to Talisman Energy for $359 million and its Haynesville assets to BG/EXCO for $446 million.

Cordillera Energy Partners I / Cordillera Energy Partners II
Cordillera Energy Partners is a Denver-based exploration and production company focused on pursuing an acquire and exploit strategy. Cordillera actively pursues growth through producing property acquisitions with a focus toward long life gas reserves principally in the Rocky Mountain and Mid-Continent regions. The founder and CEO of Cordillera was an experienced industry executive who had been instrumental in the consummation of over $1 billion in acquisition and divestiture transactions while at HS Resources and Apache Corporation (NYSE: APA).

Cordillera I – In February 2000, EnCap and management formed Cordillera Energy Partners I to acquire and develop properties in the Rocky Mountain and Mid-Continent regions. Utilizing a combination of bank debt and private equity, Cordillera pursued an aggressive growth strategy, closing six acquisition transactions between February 2001 and December 2002. In the process, the Company amassed over 200 Bcfe of proved reserves at an attractive price of less than $0.90/mcf.  In 2002, the Company initiated an active development program which substantially increased production volumes and cash flow. In October 2003, Cordillera was sold to Patina Oil & Gas Corporation for cash and warrants.

Cordillera II – In December 2004, EnCap and Management formed Cordillera Energy Partners II.  Over the ensuing three and a half years, Cordillera II deployed its commitment in the Texas Panhandle and East Texas while following a similar strategy as Cordillera I. Due to favorable market conditions, Cordillera II sold its assets to Forest Oil Company (NYSE: FST) in September 2008.

EnCap is currently partnered with the same management team through Cordillera Energy Partners III.

Empresa Energy I / Empresa Energy II
Empresa Energy is a Houston-based independent oil and gas company focused on the acquisition and development of resource play-type assets. While partnered with EnCap, the Empresa team has successfully developed and realized assets in the Haynesville and Eagle Ford shale plays.  

Empresa I – EnCap and the Empresa management team formed Empresa in December 2004. The company pursued an aggressive growth strategy, amassing a substantial acreage position in the ArkLaTex Basin and Haynesville Shale play. Empresa successfully executed a development program over a four and a half year period, creating significant proved reserve value and resource potential. In July 2009, Empresa sold to Chesapeake Energy Corporation (NYSE: CHK).

Empresa II – Subsequent to the sale of Empresa I to Chesapeake, EnCap again partnered with management to form Empresa II in July 2009. Over the ensuing year, Empresa II deployed its equity commitment in the condensate window of the emerging Eagle Ford Shale play. In June 2010, Empresa II’s Eagle Ford assets were acquired by Chesapeake Energy Corporation.

Enduring Resources
Enduring Resources is a Denver-based independent oil and gas company focused on acquiring and developing oil and natural gas reserves in domestic onshore basins. Enduring was formed in December 2004 by the former management team of Westport Resources, a publicly traded Rocky Mountain-based exploration and production company that was sold to Kerr-McGee (NYSE: KMG) in 2003.

Over a six year period, Enduring assembled and developed multiple assets located primarily in the Uinta Basin, East Texas and the Eagle Ford Shale in South Texas. Enduring monetized the majority of these assets through two major sales: the August 2008 sale of East Texas assets to Cabot Oil & Gas (NYSE: COG) for approximately $600 million and the December 2010 sale of Eagle Ford Shale South Texas assets to Statoil ASA (NYSE: STO) and Talisman Energy (NYSE: TLM) for approximately $1.4 billion.

Escondido Resources
Escondido Resources is an exploration and production Company focused on the Olmos Trend in South Texas. The Escondido management team has an excellent track record of acquiring both producing and non-producing properties and maximizing value through additional development.

Since formation in December 2004, Escondido successfully acquired over 80,000 net acres located in the Maverick Basin in South Texas. Within this acreage position, Escondido drilled over 150 natural gas wells targeting the shallow Escondido and Olmos sands with a success rate of greater than 95%.

In September 2007, Escondido entered into a definitive agreement to sell its oil and gas assets to Swift Energy Company (NYSE: SFY) for $245 million.

Laramie Energy
Laramie Energy is a Denver-based, independent oil and gas company formed by former executives of Forest Oil Corporation (NYSE: FST) and Mesa-Hydrocarbons, Inc. Laramie is focused on acquiring and exploiting unconventional natural gas plays in the Rocky Mountains, primarily in the Piceance Basin of Colorado.

From its inception in May 2004 to its exit in May 2007, Laramie acquired a total of 66,000 gross / 58,000 net acres in the Piceance Basin through small acquisitions and Federal Lease Sales. These acquisitions were primarily acreage acquisitions without PDP reserves.

Laramie was able to create significant value on this acreage through a successful drilling effort that resulted in over 380 Bcfe of Total Proved reserves at the time of its sale. Over the three-year period, the Company successfully drilled over 200 wells in the Piceance Basin. The Company’s developmental success also added significant Probable upside resulting in 2.2 Tcfe of total net (2P) reserves at exit.

In May 2007, Laramie sold to Plains Exploration & Production Company (NYSE: PXP) for approximately $1.0 billion.

Laredo Energy I / Laredo Energy II / Laredo Energy III
Laredo Energy is a Houston-based independent oil & gas acquisition and development company with operations in the Lobo Trend in South Texas. While partnered with EnCap, the Laredo team has successfully developed and realized assets in this area several times.

Laredo I – In December 2001, EnCap and management formed Laredo to finance the acquisition and development of properties in the Lobo Trend. Laredo acquired and developed acreage and in the Lobo Trend and, after executing a successful development program, was acquired by Chesapeake Energy (NYSE: CHK) in October 2003 for $200 million.

Laredo II – Subsequent to the sale of Laredo I in October 2003, EnCap and Laredo management formed Laredo II. In December 2003, Laredo II acquired producing properties with development upside from ChevronTexaco. Like its predecessor, Laredo II demonstrated significant development upside and later sold to Chesapeake Energy Corporation in March 2005 for $369 million.

Laredo III – Laredo III experienced similar success in the Lobo Trend, ultimately increasing production to over 16 Mmcfe per day before exiting to El Paso Corporation (NYSE: EP) in January 2007 for $255 million.

Limestone Exploration
Limestone Exploration is a Midland-based independent oil and gas company focused on acquiring and developing acreage in the Spraberry and Wolfcamp (Wolfberry) trend.  Limestone was formed by a multi-disciplinary management team with extensive experience in the Permian Basin and strong connections in the Midland area.

At the time of EnCap’s initial commitment to Limestone in April 2008, the Company had identified and obtained an option on 7,500 contiguous  net acres in Martin County, TX that were highly prospective for the Spraberry and Wolfcamp formations. The management team believed that the Wolfberry model of combining several discrete stratigraphic reservoirs in the Permian Basin and stimulating them with modern technology would result in economically viable wells. Limestone drilled a total of 19 successful wells, generating 28.2 MMBoe of proved reserves and ~1,000 Boe/d of net production by September 2010. In October 2010, Limestone closed the sale of its assets to an undisclosed buyer.

Lone Star Land & Energy
Lone Star Land & Energy was a Dallas-based independent oil and gas company focused on the pursuit of (i) acquisitions of producing properties with behind-pipe and drill-bit oriented upside and (ii) acreage and drilling opportunities in low-risk resource play areas. Lone Star was formed by a team of seasoned E&P executives with over 100 years of aggregate experience in A&D, land, technical evaluation, geology, and drilling/production in the Delaware Basin, Permian Basin, Williston Basin, Gulf Coast, East Texas, and North Louisiana. 

After closing on an initial acquisition of producing properties in South and West Texas, Lone Star conducted an in-depth study of the Williston Basin and decided to pursue a sizeable acreage position in a targeted area of the Bakken shale oil resource play in North Dakota. Over the course of the following 18 months, the team successfully pieced together an attractive 26,000 net acre footprint in Dunn and Mountrail Counties.

From late 2009 through early 2010, Lone Star partnered with an industry player and drilled eight gross (four net) wells with positive results. The board decided to capitalize on Lone Star’s positive drilling results and the industry’s increased appetite for oily assets by putting the assets up for sale. While the company took initial steps in initiating a marketed process, it ultimately accepted a pre-emptive offer from its partner in mid 2010 and sold its Texas producing properties in late 2010.

Marquette Exploration
Marquette Exploration was an upstream oil and gas company focused on unconventional resource plays in several basins throughout North America. Marquette was formed by a seasoned management and technical team that formerly served with Burlington Resources and ConocoPhillips (NYSE: COP) and exhibited a proven track record of discovering and developing significant unconventional resources throughout North America.

Subsequent to formation in September 2006, Marquette identified three underexploited resource plays located in East Ohio, North Louisiana and Michigan and built significant leasehold positions in each play. Over the next several years, Marquette successfully tested and delineated each play in order to establish the resource potential. Marquette ultimately sold its Michigan assets (125,000 acres) in Q2 2010 to an undisclosed buyer for $74 million, and in Q3 2011, Hess Corporation (NYSE: HES) purchased Marquette and other leases in Ohio’s Utica Shale play for $750 million.

Oasis Petroleum
Oasis Petroleum (NYSE: OAS) is a Houston-based independent oil and gas company focused on the acquisition and development of unconventional oil and natural gas resources. Oasis was formed by former senior management members at Burlington Resources, which was acquired by ConocoPhillips (NYSE: COP) in March 2006.

Paloma Barnett
Paloma Barnett was a Houston-based independent operating company focused on acquiring and developing acreage in the Barnett Shale in Tarrant and Johnson counties, TX. The Company was formed by a multi-disciplinary management team with extensive experience and a demonstrable track record of value creation through multiple previous entities.

Soon after Paloma Barnett’s formation in March 2007, Paloma management recognized the public independents were willing to pay a significant premium for contiguous acreage positions and drilling locations in the urban areas of Tarrant County. Paloma quickly and efficiently altered its business plan to take advantage of the opportunity and was very soon managing a team of over 200 contract landmen on the ground in Tarrant County. This aggressive approach allowed Paloma to capture an attractive acreage position in Tarrant County that ended up accounting for a significant portion of the Company’s value.  In April 2008, the Company closed the sale of its Barnett Shale assets to Chesapeake Energy Corporation (NYSE: CHK).

PetroHawk Energy Corporation
Petrohawk Energy Corporation (NYSE: HK) is a publicly-traded E&P company based in Houston. The Company was formed in May 2003 by the former founder and CEO of 3TEC Energy, a successful EnCap Fund III investment. The Company has aggressively pursued its acquire and exploit growth strategy and has evolved from a start-up to a substantial mid-cap independent.

In May 2004, Petrohawk acquired a controlling interest in Beta Oil & Gas (“Beta”), a small publicly-traded oil and gas company based in Tulsa, with the intention of utilizing Beta as a platform to raise public equity for future growth. Subsequent to the transaction, Beta was re-named Petrohawk.

In January 2005, Petrohawk completed a Reg-D offering to supplement bank financing in consummating the acquisition of Wynn Crosby Energy, Inc. Following this offering, EnCap sold enough of its common stock in Petrohawk to recoup its initial investment.

In July 2005, Petrohawk finalized a merger with Mission Resources Corporation, a publicly traded E&P company with assets in the Permian Basin and Gulf Coast, with the combined Company having over $1 billion of oil and gas assets. Subsequent to this merger, EnCap began to strategically liquidate its remaining ownership in the Company until the last of the securities were sold in February 2006.

In July 2006, Petrohawk completed a merger with KCS Energy, creating a combined Company with estimated proved reserves of approximately 1 Tcfe.

In August 2011, Petrohawk was sold to BHP Billiton for a cash offer of $38.75 per share, representing a total equity value of ~$12.1 billion and a total enterprise value of ~$15.1 billion.
www.petrohawk.com

Plains All American Pipeline, L.P.
Plains All American is a publicly traded master limited partnership (NYSE: PAA) engaged in crude oil gathering, transportation, marketing and storage in the U.S. and Canada.  EnCap’s storied investment in PAA stems from its extremely strong relationship with the senior PAA management team. Dating back to EnCap’s investment in Plains Resources in June 2001 (“PLX”, formerly the sole GP owner of PAA), EnCap developed an understanding of the exceptional, value-driven PAA management team. 

Over the following eight and a half years, PAA pursued an aggressive development strategy growing from a $75 million equity valuation in 2001 to a $2.8 billion equity valuation in 2009. 

Plantation Petroleum Holdings
Headquartered in Houston, Plantation Petroleum Holdings is an upstream oil & gas company focused in the Permian Basin in West Texas and Southeast New Mexico. The Plantation management team has a history of creating value with EnCap in the Permian Basin using an acquire and exploit strategy.

Plantation I - In July 2002, EnCap invested equity capital to facilitate Plantation’s acquisition of Maynard Oil Company, a publicly-held company focused in the Permian Basin. The Plantation management team implemented a successful development plan and sold to Forest Oil Corporation (NYSE: FST) in December 2003.

Plantation II - Subsequent to the sale of Plantation I to Forest Oil, management again partnered with EnCap to form Plantation II in November 2003. Using a combination of bank debt and equity, Plantation II closed a highly attractive acquisition in Southeast New Mexico and created additional value by increasing production at a minimal cost. In June 2005, Plantation II sold to Range Resources Corporation (NYSE: RRC) for $116.5 million.

Plantation III - In December 2005, management partnered with EnCap for the third time in Plantation III. Again, management successfully closed an attractive acquisition in the Permian Basin and successfully implemented a drilling and production enhancement program. In July 2007, Plantation III entered into a definitive agreement to sell its assets to EV Energy Partners, L.P. (Nasdaq: EVEP) for $160 million.

Stroud Energy
Stroud Energy, is a Fort Worth-based, independent oil and gas company originally established in Wichita, Kansas in 1985. However, the Company relocated its headquarters to Fort Worth in 2000 and began focusing in the Austin Chalk trend of Central Texas. At the time of EnCap’s investment, Stroud had recently undergone an extensive transformation, having replaced its senior management team, restructured its balance sheet and redefined its strategy. In addition to continuing to selectively drill development wells in the Austin Chalk, the new management team intended to diversify its asset base through acquisitions in other geographic areas, specifically focusing on the Barnett Shale in North

Central Texas, where Stroud’s new CEO had extensive experience and a broad base of industry contacts. EnCap’s equity infusion substantially de-levered the Company providing Stroud’s new management team with growth capital to pursue their acquisition strategy. The Company expanded its position in the Barnett Shale and East Texas through a number of acquisitions and farmout agreements. As a result of successful drilling in these two areas, as well as the Austin Chalk, Stroud increased its net daily production and doubled its base of proved reserves.

Due to a receptive public market and a compelling valuation, Stroud engaged Raymond James in early 2005 to take the Company public through a 144A offering. In September 2005, Stroud successfully completed the 144A offering and in June 2006, Stroud sold to Range Resources (NYSE: RRC) for $450 million.

Talon Oil & Gas
Talon Oil & Gas was a Dallas-based independent oil and gas company focused on creating value through the acquisition and exploitation of producing properties in the Barnett Shale, East Texas and the Texas Panhandle. Talon was formed by a team of seasoned E&P executives with over 180 years of aggregate experience in all facets of the upstream oil & gas business. Furthermore, the majority of the team has worked together for 19 years in key senior positions at Coda Energy, Belco Oil & Gas, Westport Resources, Kerr-McGee Corporation and Talon where they have been involved in $27.5 billion of oil and gas transactions.

Since its formation in January 2007, Talon completed $551 million of producing property acquisitions yielding an aggregate 537 Bcfe of proved reserves and 83 MMcfepd of daily production for an attractive $1.03/Mcfe and $6,607/Mcfepd. In addition to creating value through privately negotiated acquisitions of quality assets for below-market prices, the team utilized its technical expertise to further enhance returns through strategic exploitation and operational improvements. As a result of these efforts the aggregate PDP, total proved and 3P reserves of the properties increased by 25%, 58% and 65%, respectively. In December 2010, Talon closed the sale of its assets for a combined $1 billion to EnerVest (Barnett), Devon (Texas Panhandle) and an undisclosed third party (East Texas). 

Tracker Resources Development II
Tracker Resources Development II is a Denver-based, independent oil and gas company focused on creating value through the acquisition and development of leasehold and producing properties. Tracker is lead by a highly experienced team of professionals with extensive oil and gas related experience with both major and independent companies, with a historical track record of creating value in the Rocky Mountain region.

Since formation in May 2006, Tracker acquired and developed a 150,000 net acre position in the Bakken Shale in North Dakota. The Company successfully established a significant reserve base across its position through drilling over 40 operated wells utilizing enhanced horizontal drilling techniques. Through its development, Tracker partnered with Red Arrow Energy, another EnCap portfolio company, as well as a large third party investor through an entity they jointly formed, TRZ Energy. In December 2010, TRZ sold its Bakken assets to Hess Corporation (NYSE: HES) for approximately $1.1 billion of cash consideration.