G2 Integrated Solutions is a provider of asset integrity solutions to midstream and downstream energy companies, offering a suite of services designed to help clients manage risk within their existing transmission and distribution networks, demonstrate regulatory compliance, and extend the useful lives of their infrastructure assets. The Company leverages customers’ internal data and records, its proprietary tools and methodologies, and a deep pool of highly trained professionals to solve complex operating problems for an extensive client base that includes a number of high profile North American pipeline operators and natural gas utilities.

Top Down Investment Thesis

Given the dramatic increase in activity in the domestic energy market, aging midstream and downstream infrastructure, and an increasingly stringent regulatory environment surrounding these assets, Excellere believes that there is an opportunity to establish a vertically integrated integrity management services provider that operates through a national footprint and broad suite of capabilities. Excellere’s investment into G2 Integrated Solutions is driven by a number of dynamics, including (i) the opportunity to deliver G2’s broad suite of advanced technical solutions to a diverse set of clients that are focused upon risk management solutions and regulatory compliance support, and (ii) attractive end market fundamentals, whereby new project build-out is resulting in an expanded installed base for service and an aging infrastructure is positioning high-quality integrity management services providers for future growth.

Increasing global demand, advancements in horizontal drilling and hydraulic fracturing technologies and new discoveries of economically viable basins have contributed to the continued emphasis on unconventional oil and gas production. In order to support this increased activity, energy companies are required to build infrastructure to integrate new producing regions into existing midstream and downstream networks, maintain and support aging infrastructure given increased throughput, and engineer complex solutions such as converting gas pipelines to liquids in order to respond to market conditions. Furthermore, given the increase in energy activity and the number of high profile catastrophic incidents, an increasingly stringent regulatory environment has evolved, which is driving higher compliance standards. As a result, the North American natural gas industry is currently projected to spend an estimated $20.0 billion annually through 2035 to build new infrastructure and maintain existing assets, resulting in substantial future opportunities for integrity management service providers with advanced technical capabilities and broad service offerings.

Buy and Build Strategy

The North American asset integrity market is highly fragmented with numerous independent product and service providers. As such, G2 Integrated Solutions is well-positioned to add complementary capabilities and extend its geographic reach via acquisitions. The fragmentation in this market, coupled with the increased importance of domestically produced oil and natural gas to the North American energy supply, has created an opportunity to build a full-scale integrity management solutions provider to midstream and downstream energy companies. Specific areas of interest within the systems integrity management industry include: (i) complementary high-end infrastructure engineering services, (ii) GIS products and services, (iii) data analytics and management, and (iv) safety services.

To the extent you are interested in learning more about G2 Integrated Solutions or the integrity management industry, please contact David Kessenich at or Brad Cornell at .

IPT is an oil and natural gas engineering services firm specializing in the integration of modern well completion, hydraulic fracture stimulation and reservoir engineering technologies. The Company is comprised of practicing petroleum engineers with extensive operator and service company experience throughout the United States and in select international markets. IPT is considered one of the foremost thought leaders in the hydraulic fracturing industry with over 20 years of experience working in most basins and major shale plays. IPT not only provides highly technical consulting services that significantly influence the economics of a well, but also represent an independent third-party expert at the well site that helps to ensure that all parties are performing their respective duties in a safe and efficient manner.

Top Down Investment Thesis

Recent discoveries of oil and natural gas reserves, increasing global demand and the evolution of horizontal drilling and well completion technologies have spawned a substantial increase in exploration and production activity in the United States. According to the Annual Energy Outlook 2012 as published by the U.S. Energy Information Administration (“AEO12”), U.S. dependence on imported petroleum liquids is projected to decline by more than one million barrels per day by 2020 driven primarily by growth in domestic oil production. In addition, net petroleum imports as a share of total U.S. liquid fuels consumed is projected to drop from 49 percent in 2010 to 36 percent in 2035 as the United States continues to harvest its natural resources in pursuit of energy independence. Technological advances and the increasing commercial consumption of natural gas will also drive increased exploration and production activity. Since 2000, U.S. shale gas production has increased 17-fold, currently comprising approximately 30 percent of the total U.S. production, and is projected to comprise 49% of total U.S. production by 2035 (according to AEO12).

In order to unlock the potential of the oil and natural gas resources trapped in tight formations and shale plays, exploration and production companies have enlisted the services of hydraulic fracturing experts that employ advanced completion and stimulation techniques to optimize the output of their wells. The pressure pumping market, which includes hydraulic fracturing and other stimulation services provided to oil and gas exploration and production companies, is expected to grow from $16.7 billion in 2009 to $51.0 billion in 2012, driven in part by the effectiveness of these services to enhance well production.

Buy and Build Strategy

The oil and natural gas engineering services market is highly fragmented with a limited number of institutional service providers capable of managing national programs for customers. Furthermore, the majority of service providers offer only one solution to customers, rather than providing a fully integrated suite of capabilities that spans the lifecycle of an active well. This fragmentation, coupled with the limited service offerings of most industry participants, has created an opportunity to build an integrated solutions provider with a broad set of complementary capabilities to better serve customers. Specific areas of interest within the oil and natural gas engineering services industry include: (i) complementary high-end capabilities such as seismic processing or well design (ii) technology enabled solutions and software (iii) data collection, management and analytics, and (iv) regulatory compliance.

To the extent you are interested in learning more about IPT, please contact David Kessenich at or Brad Cornell at to further discuss the oil and natural gas services industry.