Wilcox Swartzwelder & Co have released the most recent data on notable merger and acquisition trends, deals and valuation in the energy and industrial sector.

1. Energy & Industrial Sector Observations

KPMG: Oil & Gas One of Four Industries Expected to Dominate M&A in 2014. About
56% of those O&G companies surveyed said they would be initiating an acquisition in
2014. Middle-market deals were expected to dominate, but energy executives
predicted slightly larger deal sizes. Of those who said they would do a deal, 11%
expected their deals valued at $500 million - $999 million, 23% expected between
$250 million - $499 million and 56% expected less than $250 million. Their primary
reason for doing a deal was to expand their geographic reach (25%) and to expand
their customer base (14%). A substantial 57% predicted that their own industry would
be the most active. Executive said they were motivated by the desire for growth.
(KPMG, LLP Monthly Press Release – January 2014)

Inorganic Opportunities to Drive Growth Fueled U.S. Oil & Gas M&A. Accelerated
M&A activity in the U.S. oil and gas industry throughout 2013, which included a
strong uptick in the last three months of the year, led to 182 total deals accounting
for $115.9 billion in total deal value for the year. As companies, continue
concentrating on sustaining growth and maximizing shareholder value, PwC expects
continued interest in M&A activity in the sector throughout 2014. During the final
three months of 2013, there were a total of 51 oil and gas deals with values greater
than $50 million accounting for $41.7 billion, a 154 percent increase in deal value
from the 43 deals worth $16.4 billion in the third quarter of 2013. (Pricewaterhouse
Cooper Press Release – January 28, 2014)

Shale Plays Fuel Energy M&A. “Overall, M&A activity has been robust for a number
of years in oil and gas,” said Doug Meier, PwC’s U.S. energy sector deals leader. “We
see that (trend) continuing as companies in the space focus on portfolio optimization
– further investing in those assets that are generating strong returns and divesting
those assets that are generating lower returns.” According to PwC, 27 deals in the
final quarter of 2013 were related to shale plays. Shale deals had a combined value of
$23.8 billion, up 338% sequentially. There were 79 shale deals that contributed $53.2
billion in value for all of last year, marking an additional two deals and $1.5 billion in
value versus 2012. (Fox Business – January 28, 2014)

Reuters: North American Energy Boom Remaking World Order. North America's
energy revolution is remaking all aspects of the global economy and international
relations in what has turned out to be the most profound shift in the second decade
of the 21st century. If fracking has not yet made the United States "energy
independent", it has certainly created a crucial source of competitive advantage and
given policymakers much more room to manoeuvre. Since 2008, net energy imports
have almost halved, to just $217 billion in the first 11 months of 2013. In 2013, the
country is expected to have imported the fewest barrels of crude oil since 1994.
(Reuters – January 29, 2014)
Sector Update | February 2014
phone 972.831.1300 | web WS-iBank.com
102 Decker Court
Suite 204
Irving, Texas 75062
972.831.1300
WS-iBank.com

2. 2

IHS Report Predicts 20 Years of Stable Natural Gas Prices. The price of U.S.-produced natural gas will remain stable and
relatively low for at least the next two decades, boosting opportunities for exploiting the fuel’s economic and
environmental benefits, according to an IHS report. The report projects that natural gas will sell for an average $4-$5 per
million Btu, adjusted for inflation, through 2035. The price of crude oil will remain three to four times higher on an
energy-equivalent bases, IHS said. Viewed as increasingly scarce just a decade ago, when its price rose above $15 per
million Btu, natural gas produced from unconventional tight reservoirs now is plentiful and cheap, leading to
reassessments of the entire U.S. energy landscape. IHS said unconventional natural gas resources totaling 900 trillion
cubic feet can be produced economically when gas trades at $4 or even less. “This means that the North American natural
gas resource base can accommodate significant increases in demand without requiring a significantly higher price to elicit
new supply,” IHS said. (Fuel Fix – January 16, 2014)

IEA Sees Higher Oil Demand. World consumption will climb by 1.3 MMBoe/d, or 1.4%, to a record 92.5 MMBoe/d, the IEA
said in its Oil Market Report. The increase of 90,000 barrels a day from last month follows the first year of annual demand
growth in developed nations since 2010, it said. “Upside risks to oil demand growth are much more relevant this year than
the same period last year, where concerns were for downside risks to materialize,” Miswin Mahesh, an analyst at Barclays
Plc in London, said. “Demand-supply metrics in the oil market are moving toward a relatively better equilibrium this year
as further North American production gets on board.” Amrita Sen, chief market strategist at Energy Aspects Ltd., a
consultant in London said “There is hardly an inventory buffer. The fact that demand increases for much of 2013 was
coming from unfamiliar territories - the OECD - meant that it was overlooked for many months. If this year has any
surprises in stock, they are more likely to come from the demand side.” (Bloomberg – January 21, 2014)

Remarkable Rise of Texas Crude Oil. November production for Texas reached a 33-year high and was 36% of all U.S.
crude oil. Oil drillers in Texas pumped out an average of 2.797 million barrels of crude oil every day (bpd) during the
month of November, which is the highest daily oil output in Texas in any single month since at least January 1981, when
the EIA started reporting each state’s monthly oil production. Compared to a year ago, oil output in Texas increased by
25% in October marking the 27th straight month starting in August 2011 that the state’s oil output has increased by 25%
or more on a year-over-year basis. Remarkably, oil production in Texas has doubled in just the last two and one-half years,
from 1.39 million bpd in May 2011 to 2.797 million bpd in November of last year, and that production surge has to be one
of the most significant increases in oil output ever recorded in the US over such a short period of time. (American
Enterprise Institute – January 31, 2014)
Broader Middle Market M&A Trends
Historical M&A Volume
6,000
5,000
Transaction Valuations
(Completed Deals < $500 Million)
(EBITDA Multiple; Completed Deals<$500 Million)
9.4x
9.2x
8.5x
8.4x
8.4x
8.2x
7.9x
7.4x
7.4x
7.1x
7.0x
10.0x
10 Year Avg. = 3,763
8.0x
4,000
6.0x
3,000
4.0x
2,000
2.0x
1,000
0.0x
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sector Update | February 2014
phone 972.831.1300 | web WS-iBank.com

3. 3
Energy Stock Price Performance
U.S. Rig Count
2,250
90.0%
2,000
80.0%
1,750
70.0%
1,500
60.0%
1,250
50.0%
1,000
40.0%
750
30.0%
500
20.0%
250
10.0%
0
0.0%
Jan-07Jul-07Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14
Oil
Gas
% Oil
(As of January 31, 2014)
Basin
Permian
Eagle Ford
Williston
Red – New York Stock Exchange Composite
Blue – Oilfield Services Index
Green – Exploration & Production
Industrial Stock Price Performance
Rig
Count
484
214
179
YoY Rig
Change
20
-25
-13
%
Change
4%
-10%
-7%
U.S. Industrial Manufacturing (ISM)
75.0
70.0
65.0
60.0
55.0
PMI
50.0
45.0
40.0
35.0
30.0
25.0
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14
(As of February 1, 2014)
Red – New York Stock Exchange Composite
Blue – Industrial and Infrastructure
Nov-13 Dec-13 Jan-14
PMI
Sector Update | February 2014
phone 972.831.1300 | web WS-iBank.com
57.3
56.5
51.3

4. 4
Notable Energy & Industrial Transactions
Announcement Date
Acquiror
Target
Target/Transaction Description
Transaction
Value ($M)
Energy & Industrial Manufacturing and Services
1/30/14
1/29/14
1/24/14
1/23/14
1/22/14
Packers Plus Energy
Services
CMC Machine
Works/Eagle
Downhole Solutions
CMC Machine is a Texas-bas company that performs
machining services that provide manufacturing capabilities
to companies; Eagle Downhole is a Texas-based company
providing downhole tools and product development
solutions to solve completion and production issues
--
Pipeline Supply &
Service/Goldman
Sachs Merchant
Banking
Industrial Air Tool/
ZS Fund
Texas-based distributor of handling equipment, industrial
tools, MRO & safety supplies, spare parts and aftermarket
repair & rental services to upstream and downstream oil
and gas and industrial markets
--
Insight Equity
Holdings
Midstate
Berkshire/SAC
Capital
Massachusetts-based company that machines and
2
assembles large & small scale components with 250,000 ft
of manufacturing space and 100+ multi-axis CNC machines
--
MicroSeismic
Reservoir Imaging
Acquisition of U.S. assets of MicroSeismic that include
wireline units and equipment for downhole microseismic
data acquisition services
--
Texas-based provider of wellhead sales & installation, frac
stack rental and installation, field service and repair of
valves/wellhead and field greasing of production and
frac equipment
--
Canary, LLC
American Wellhead
1/22/14
Enserco Midstream
Frac Resources
Texas-based provider of frac sand storage, transloading
and logistic services
--
1/21/14
Cunningham Energy
Pettey Oilfield
Services
Through a merger transaction with Pettey Oilfield Services,
a new company, Cunningham Oilfield Services, was formed
which will provide contract drilling, well service &
swabbing rig, cement, plugging, trucking and wellsite,
right-of-way & pipeline construction services
--
1/20/14
1/16/14
1/14/14
1/6/13
General Electric
Flotek
Cameron
Eclipse IOR Services
Acquisition of Cameron’s Reciprocating Compression
business which provides reciprocating compression
equipment and aftermarket parts & services
$550.0
Texas-based provider of enhanced oil recovery
technologies and services, including water control
polymers, sweep improvement technology, mobility
control polymer flooding, injectivity improvement and
permanent clay stabilization
$7.0
IronGate Energy
Services/ Clearlake
Capital
Green Light Energy
Services
Bakken-based provider of rental services, including work
string components and pressure control, completion &
production-related equipment and services
--
DXP Enterprises
B27, LLC
Global supplier, with multiple offices in Texas, Oklahoma
and Louisiana, that provides pump and integrated flow
control solutions and
$285.0
Sector Update | February 2014
phone 972.831.1300 | web WS-iBank.com

5. 5
Notable Exploration & Production and Midstream/Downstream Transactions
Announcement Date
Acquiror
Target
Target/Transaction Description
Transaction
Value ($M)
Exploration & Production and Midstream/Downstream
1/31/14
1/30/14
1/24/14
1/22/14
1/21/14
1/10/14
1/3/14
Liberty Resources,
LLC
Undisclosed seller
Undisclosed buyer
Hess Corp.
Athlon Energy, Inc.
Undisclosed seller
Acquisition of assets located in the Williston Basin that
consist of 53,000 net acres producing over 4,000 Boe/d
$455.0
Sale of assets located in the Utica Shale that consist of
74,000 acres producing primary dry gas, which brings
Hess’s total divestment total to over $8 billion since 2013
$924.0
Acquisition of assets located in the northern Midland Basin
that consist of 5,656 net acres with current production of
750 Boe/d with 60% oil
$88.0
Acquisition of assets located in the Niobara Shale,
specifically the Denver-Julesburg Basin, that consist of
interests in 40 wells and 28,727 net acres
$30.0
Pacific Energy
Development
(PEDEVCO)
Undisclosed seller
Undisclosed buyer
Chesapeake Energy
Corp./Chaparral
Energy
Concentrating on reducing financial complexity and refocusing on core assets, Chesapeake sold its 20% stake in
Chaparral Energy; this sale would value Chaparral at
approximately $1 billion
$215.0
Undisclosed sellers
Two separate acquisitions of properties located in the
Williston Basin that consist of a combined 20,800 net acres
and 350 Boe/d
$74.6
Acquisition of assets located in West Virginia, Virginia and
Kentucky that consist of 400,000 acres with royalty income
from 2,5000 active natural gas wells
$60.1
Emerald Oil, Inc
Pardee Resources,
Co.
Undisclosed seller
Sector Update | February 2014
phone 972.831.1300 | web WS-iBank.com

6. 6
Wilcox | Swartzwelder & Co.
Wilcox Swartzwelder & Co. is a boutique investment bank, specialized in delivering high quality
financial advice exclusively to owners of middle market companies and oil and gas properties in
the energy and industrial sector.
Advisory services include company sales, mergers and acquisitions, private placements of debt
and equity, oil and gas property acquisitions and divestitures, institutional capital raises, and
general corporate finance matters. Through its merchant funding activities, the Firm acts as
direct investor providing flexible capital to support small, entrepreneurial companies.
Principals have more than 40 years of combined investment banking experience, closing over 100
transactions with an aggregate value in excess of $3.9 billion. They have also acted as investors
with capital at risk, operators and board members in multiple companies, having navigated
through various business cycles and completed transactions in both up and down markets.
The Firm is fully licensed and registered. Securities are offered through PetroGrowth Energy
Advisors, LLC, a registered broker-dealer and member of FINRA/SIPC.
Notes:
The information and views contained in this report were prepared by Wilcox Swartzwelder & Co. LLC and should not be
construed as an offer to buy or sell or a solicitation to buy or sell any financial instruments or to participate in any trading
strategy. The information contained herein is believed to be reliable, but Wilcox Swartzwelder & Co. LLC makes no
representation as to its accuracy or completeness.
Indices: Dow Jones U.S. Select Oil Equipment and Services Index (DJSOES), Dow Jones U.S. Select Oil Exploration and Production
(DJSOEP), Industrial Select Sector SPDR (XLI), NYSE Composite Index (NYA)
Data Sources: Dealogic, Capital IQ, Stockcharts.com, Baker Hughes, RigData, Rig Zone, Energy Information Agency (EIA),
Association of Energy Service Companies (AESC), Institute of Supply Management (ISM), Wilcox Swartzwelder Proprietary Energy
and Industrial M&A Database
Copyright © 2014 Wilcox Swartzwelder & Co. LLC, all rights reserved.
Sector Update | February 2014
phone 972.831.1300 | web WS-iBank.com