Global Research Published by Raymond James & Associates

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1 Published by Raymond James & Associates Energy Pavel Molchanov, RJA, (713) , J. Marshall Adkins, RJA, (713) , Andrew Bradford, CFA, RJL, , Jean-Pierre Dmirdjian, Res. Analyst, RJEE, +33 (1) , October 5, 2018 Industry Brief Energy: Energy Quarterly Raymond James Quarterly Global Energy Report for 3Q18 This quarterly report aggregates energy research highlights from Raymond James & Associates as well as our international teams: Raymond James Ltd. (Canada) and Raymond James Europe. Quarterly Highlights Crude Oil After the 2Q blowout in the spread between Brent and WTI prices, the spread narrowed slightly in 3Q with both benchmarks averaging at their highest levels since WTI s $69.61/Bbl average rose 2% q/q, and Brent at $75.26 edged up 1%; the spread was $5.66, splitting the difference between $6.58 in 2Q and $4.08 in 1Q, though it widened back out towards the end of the quarter. We continue to see a supportive fundamental backdrop for the global oil market: the larger U.S. producers are exhibiting restraint in capital allocation; OPEC+Russia s gradual unwinding of production cuts is being offset by declines in Venezuela and sanctionsrelated pressure on Iranian exports; there are still supply declines in several non-opec geographies; and the picture for global demand growth is broadly upbeat. See page four for details on our oil price assumptions, most recently updated in September to reflect a somewhat narrower Brent-WTI spread for Natural Gas In 3Q, Henry Hub bid week prices averaged $2.90/Mcf, up 5% q/q. There continues to be a tug of war between mostly positive demand trends but persistently high supply, especially from Permian associated gas. Industrial demand and pipeline gas exports to Mexico are bullish demand drivers, and LNG exports will become more needle-moving as four U.S. LNG export projects are due to start up between now and year-end On the other hand, the structural ramp-up in wind and solar is steadily restraining gas s market share gains in the power sector even without the longer-term threat that batteries will present to gas peakers. See page four for details on our gas price assumptions. Stocks The broader market was very strong in 3Q, setting a series of records towards the end of the quarter, as the relentless U.S.-China trade war headlines were more than offset by the tailwinds of strong corporate earnings and a predictable Fed policy. Following a 1Q decline of 1.4% and 2Q gain of 3.1%, the S&P 500 ended 3Q up 7.2%. Despite a solid end to the quarter, energy underperformed; the two broadest U.S. energy subsector indices, E&P and oil service, were up 0.6% and down 3.5%, respectively. That said, energy (on the whole) is on track to outperform the S&P for only the second year out of the past eight, the other exception being Energy s market cap weighting within the S&P, currently 6.0%, is still near the lowest level since See page three for details on the performance of various energy indices. Please read domestic and foreign disclosure/risk information beginning on page 2 and Analyst Certification on page 2. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

2 Contents Stats of the Week... 5 Highlights... 6 Exploration and Production... 7 Oilfield Services Independent Refiners Renewable Energy and Clean Technology Canadian Oil and Gas European Oil and Gas International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

3 $/Mcf $/Bbl $/Mcf $/Bbl Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 % of S&P 500 Raymond James 40% 30% Energy Indices vs. Broader Market - Trailing 12 Months and Quarterly Index Performance TTM Performance Quarterly Performance 20% 10% 0% -10% -20% E&P Index S&P 500 Coal Index Clean Tech Index Oilservice Index Midstream Index Source: FactSet, Raymond James research 30 Market Cap Weightings in S&P 500: Energy vs. Tech vs. Healthcare Energy Information Technology Healthcare Current: 6.0% 0 Source: S&P, Bloomberg, Raymond James research Oil and Gas Price Trends $6.00 Front-Month Crude Oil and Natural Gas Futures Contracts January September 2018 $110 $ Month Crude Oil and Natural Gas Futures Strips January September 2018 $110 $5.50 $100 $5.50 $100 $5.00 $90 $5.00 $90 $4.50 $80 $4.50 $80 $4.00 $70 $4.00 $70 $3.50 $60 $3.50 $60 $3.00 $50 $3.00 $50 $2.50 $40 $2.50 $40 $2.00 $1.50 Natural Gas (Henry Hub) Crude Oil (WTI) $30 $20 $2.00 $1.50 Natural Gas (Henry Hub) Crude Oil (WTI) $30 $20 Source: Bloomberg, Raymond James research Source: Bloomberg, Raymond James research International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

4 2018 RJ WTI RJ Brent 2019 RJ WTI RJ Brent 2020 RJ WTI RJ Brent RJ&A Oil Price Forecast Q1 18A Q2 18A Q3 18A Q4 18E 2018E $62.89 $67.97 $69.61 $70.00 $68.00 $66.97 $74.55 $75.26 $85.00 $75.00 Q1 19E Q2 19E Q3 19E Q4 19E 2019E $70.00 $67.50 $67.50 $65.00 $67.50 $85.00 $80.00 $80.00 $75.00 $80.00 Q1 20E Q2 20E Q3 20E Q4 20E 2020E $75.00 $75.00 $75.00 $75.00 $75.00 $80.00 $80.00 $80.00 $80.00 $ (+) Long-Term Forecast RJ WTI RJ Brent Source: Bloomberg, FactSet, Raymond James research 2021E+ $70.00 $ Actual Gas RJ&A Henry Hub Natural Gas Price Forecast Q1 17A Q2 17A Q3 17A Q4 17A 2017A $3.13 $3.04 $2.93 $2.91 $ Bloomberg Consensus NYMEX Futures RJ Gas 2019 Bloomberg Consensus NYMEX Futures RJ Gas Q1 18A Q2 18A Q3 18A Q4 18E 2018E $3.03 $2.76 $2.90 $3.03 $2.95 $3.03 $2.76 $2.90 $3.13 $2.95 $3.03 $2.76 $2.90 $2.75 $2.85 Q1 19E Q2 19E Q3 19E Q4 19E 2019E $3.12 $2.94 $2.96 $3.10 $3.05 $3.12 $2.65 $2.69 $2.76 $2.80 $2.40 $2.20 $2.10 $2.30 $ (+) Bloomberg Consensus NYMEX Futures RJ Gas Long-Term Forecast Source: Bloomberg, FactSet, Raymond James research $3.01 $2.67 $2.50 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

5 Stats of the Week In Case You Missed It Here Is a Recap of All the Energy Stats of the Week from 3Q18 July 2: As U.S. Coal-Fired Power Falls, the Grid Can Adapt, and European Case Studies Show How July 9: U.S. Rig Count Set to Move Sharply Up Despite Potential Permian Oil Price Problems July 16: As Libya's Factions Fight It Out, This Is Yet Another Oil Supply Outage to Keep Us Busy July 23: IMO How Bullish Is it for Refining and Will it Drive Crude Prices Much Higher? July 30: Raising Oil Price Forecasts for 2020 and Beyond - Higher Prices are Here to Stay August 6: Will Global Oil Demand Growth Stall in Response to Higher Oil Prices? August 13: Should Energy Investors Be Concerned About Fossil Fuel Divestments? August 20: What Are the Big Themes Energy Investors Need to Know for the Next Five Years? August 27: Three Years After Paris Agreement, Tech Drives Decarbonization, Regardless of Politics September 4: OPEC's African Production Has Declined 25% in Six Years, Why Doesn't the Market Care? September 10: U.S. Sanctions Working - Reducing Iranian Supply Forecast - Oil Model Now More Bullish September 17: CapEx Trend Shows That Russia Is Having to Work Harder For Its Oil Production Growth September 24: Permian Oil Diffs to Ease in 2019 As New Pipes, Debottlenecking Efforts Emerge International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

6 Highlights In Case You Missed It The List Below Highlights One Featured 3Q18 Report from Each RJ Energy Analyst Marshall Adkins: NOV: Strong 2Q Points Towards Sustainable Growth; Raising 2019 Estimates Andrew Bradford: BDI.T: Downgrading to Market Perform: LNG-Related Contracts Conditionally Awarded - We Expect More Chris Cox: ECA.T: 2Q18 Results A Solid Beat As Market Diversification On Display; Strong Momentum Into 2H18 Jean-Pierre Dmirdjian: GTT.PA: Initiating at Strong Buy: Underappreciated Play on LNG and IMO John Freeman: FANG: Model Update Following EGN Acquisition; Boosting Target to $187 Justin Jenkins: Refining Monthly Crack Check, August 2018: Time to Buy Refiners Ahead of Fall Turnaround Season? Jeremy McCrea: ARX.T: Upgrading to Strong Buy: Reading Between the Lines - More Growth and Liquids Upside Pavel Molchanov: XYL: Initiating With Outperform: The Supermarket of Water Tech Is Not Cheap, but Well Worth It Kurt Molnar: VET.T: Initiating with Outperform: A Castle Is Only As Good As Its Moat Praveen Narra: HAL: Transitory Issues Cause Near-term Softness: Valuation Suggests Fears Overblown J.R. Weston: AMGP/AM: Antero Franchise the Next Midstream GP/LP Roll-up Candidate? Detailed Merger Math International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

7 Exploration and Production Stock Performance in 3Q18 and TTM 3Q18 Stock Price Performance Trailing 12-Month Stock Price Performance VNOM (1) SM (2) EGN (2) KOS (2) MRO (1) WPX (1) COP (3) CXO (1) MTDR (2) OAS (1) S&P 500 HES (2) CRC (3) NFG (3) CLR (1) FANG (2) EOG (2) APA (2) RRC (4) WLL (1) Group Avg. S&P Energy MUR (3) OXY (2) PE (1) SWN (4) NFX (1) COG (4) WRD (1) QEP (1) PXD (1) APC (3) XEC (3) DVN (3) CRZO (1) NBL (3) CHK (4) LPI (2) AR (2) SRCI (1) CNX (4) (20)% (10)% 0% 10% 20% 30% 40% CRC (3) WLL (1) VNOM (1) SM (2) WRD (1) CLR (1) WPX (1) MRO (1) EGN (2) OAS (1) COP (3) HES (2) CRZO (1) Group Avg. FANG (2) APC (3) QEP (1) EOG (2) OXY (2) MUR (3) MTDR (2) PXD (1) KOS (2) CXO (1) S&P 500 PE (1) S&P Energy NBL (3) DVN (3) CHK (4) APA (2) CNX (4) NFG (3) NFX (1) SRCI (1) AR (2) RRC (4) COG (4) SWN (4) XEC (3) LPI (2) (40)% 0% 40% 80% 120% 160% 200% 240% 280% 320% 360% Source: FactSet, Raymond James research. RJ Ratings: 1 = Strong Buy, 2 = Outperform, 3 = Market Perform, 4 = Underperform, S = Suspended This analysis does not include transaction costs and tax considerations. If included these costs would reduce an investor s return. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. A complete record of our Exploration & Production stock recommendations for the trailing 12 months is available upon request. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

8 Number of Companies Raymond James E&P Outlook and Investment Thesis Topical E&P themes for the remainder of 2018 include the transition by larger operators to a highly efficient manufacturing mode for drilling and completion horizontal wells, an emphasis on capital restraint by U.S. producers, and the M&A outlook in a higher crude price environment. As discussed in a prior Stat of the Week, In light of recent Permian takeaway issues, operators have begun building up an above average well inventory backlog to facilitate larger scale batch completions, the key ingredient in the switch to manufacturing mode once pricing recovers. Notwithstanding the differential, crude prices remain materially above the $50-$60 crude initially budgeted by most E&Ps, meaning planned projects are still attractive and should allow operators to meet their 2018 cash flow targets. While growth in drilling activity has the potential to continue placing pressure on the Brent-WTI differential, we believe that increasing takeaway capacity due to the Sunrise/Cactus II pipelines and rail options should stop the differential doomsday from occurring in the foreseeable future. Looking out longer term, as Permian production continues to grow, will more operators shift rigs to less crowded plays such as the Gulf of Mexico or Eagle Ford to access higher crude prices? Additionally, a hallmark of the year has been the capital restraint shown by E&P operators even with the strengthening price of oil. A preponderance of the companies in our coverage have emphasized returns on capital by pursuing FCFs and ROE/ROIC/ROCE metrics that incentivize capital discipline. Is this merely PTSD from the days of 2015 when crude prices finished below $40/Bbl or does it represent a long-term shift to the manufacturing style model, delineated here? We anticipate the latter, as the nascent instability in oil prices tilts the scales toward a capital discipline approach that makes E&Ps less vulnerable to transient disruptions in prices. Concluding the year, will ongoing bullish oil prices cause companies to forget the vagaries of recent years and abandon capital restraint? While only a handful of large-scale corporate M&A deals came during the first three quarters of this year, a strong case can be made that economies of scale are an important dynamic with production ramping up. (CXO s $9 billion acquisition of RSPP and FANG s $9B acquisition of EGN were both predicated on substantial synergies surrounding G&A and batch completions). Will a proliferation of corporate M&A be observed going into next year as operators look to increase synergies, to reduce G&A and lower operating costs, while at the same time gain pricing power over highly demanded oil service providers? Naturally, we will keep our ears to the ground for any fluctuations in these undercurrents in the E&P space. Overall, however, we expect E&Ps to post outsized gains during the last quarter of the year that should surpass the uplift in oil prices given the themes highlighted above. Our top picks in the E&P space include the following. Among large-caps: Concho (CXO), Continental (CLR), Marathon oil (MRO), and Pioneer (PXD). Among small/mid-caps: Oasis (OAS), Parsley (PE), SRC Energy (SRCI), and WildHorse (WRD). Our ratings distribution is now 35% Strong Buy, 30% Outperform, 22% Market Perform, and 14% Underperform. As you can see in the chart below, we have maintained our bullish ratings across the E&P coverage universe since our last update in July. Given our conviction that prices will average ~$70/Bbl for the year in 2018, we have positioned our ratings accordingly, with approximately two-thirds of the E&P coverage rated at Strong Buy or Outperform Raymond James E&P Ratings Distribution 0 MU-4 MP-3 MO-2 SB-1 Source: Raymond James Research 2Q18 Earnings Preview Current International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

9 LPI SRCI WRD MUR SWN CRZO NFX AR QEP WLL CNX SM CHK RRC KOS XEC OAS CRC PE MTDR NFG EGN WPX FANG Years APA MRO APC COP DVN NBL OXY CLR COG PXD EOG HES CXO Years Raymond James Large Caps: EV/EBITDA Multiples vs. Reserve Life 14.0x x 10.0x 8.0x 6.0x x 2.0x 0.0x 0 EV / 2018E EBITDA Reserve Life Source: FactSet, Raymond James research. As of October 2, 2018 Small and Mid-Caps: EV/EBITDA Multiples vs. Reserve Life 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x x 0 EV / 2018E EBITDA Reserve Life Source: FactSet, Raymond James research. As of October 2, 2018 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

10 SWN AR RRC CNX CHK WRD QEP MUR LPI CRC SM WLL CRZO NFG NFX EGN XEC OAS WPX SRCI PE MTDR KOS FANG Years COG DVN NBL MRO COP APA HES CLR OXY APC CXO PXD EOG Years Raymond James Large Caps: Enterprise Value/Proved Reserves vs. Reserve Life $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $ $ Enterprise Value/Boe Reserve Life (Years) Source: FactSet, Raymond James research. As of October 2, 2018 Small and Mid-Caps: Enterprise Value/Proved Reserves vs. Reserve Life $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $ Enterprise Value/Boe Reserve Life (Years) Source: FactSet, Raymond James research. As of October 2, 2018 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

11 XEC MTDR WPX NFX OAS RRC SM FANG EGN LPI QEP CRZO KOS SRCI CRC NFG AR MUR WRD PXD APA CXO COG CLR EOG HES OXY COP MRO DVN Raymond James Large Caps: % of Proved NAV/Share 70% 60% 50% 40% 30% 20% 10% 0% Source: FactSet, Raymond James research. As of October 2, 2018 Small and Mid-Caps: % of Proved NAV/Share 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: FactSet, Raymond James research. As of October 2, 2018 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

12 PE WPX WRD SRCI KOS CLR FANG MRO PXD CRZO WLL SM APC EGN CRC EOG DVN COP LPI MUR QEP OXY OAS HES NFX CXO CHK CNX NBL APA MTDR XEC RRC AR NFG SWN Raymond James Production Growth per Debt-Adjusted Share The following chart ranks our coverage universe on production growth per debt-adjusted share for the period Investors can use this tool to screen for potentially top-performing stocks, in addition to other relevant factors, including: 1) absolute and relative valuations; 2) leverage to changes in commodity prices; and 3) company-specific financial and operational risk profiles. According to our analysis, the companies with the highest projected production growth per debt-adjusted share over the period are Parsley Energy (PE), WPX Energy (WPX), WildHorse Resource Development (WRD), and SRC Energy (SRCI). Debt Adjusted Cash Flow Growth % 74% 71% 64% 58% 53% 50% 49% 47% 47% 46% 43% 43% 41% 39% 33% 33% 32% 31% 31% 29% 28% 27% 26% 24% 24% 23% 21% 21% 21% 20% 18% 5% 1% -5% -7% Source: Raymond James Research International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

13 Raymond James E&P Research Universe Market Valuation Database Raymond James E&P Research Universe Market Valuation Database Raymond James E&P Comps Sheet - Large Caps Priced Market Enterprise EV / EBITDA (RJ) EV / EBITDA (Consensus) Y/Y Production Growth Debt Adj. Production Commodity Mix Value per Name Ticker Analyst Rating 10/2/2018 Cap ($mm) Value ($mm) Growth Oil Gas NGLs Flowing Barrel Large Caps Anadarko Petroleum Corp. APC JF MP-3 $ ,207 48, x 4.9x 6.2x 5.3x 0% 12% 11.7% 58% 28% 15% $75,629 Apache Corporation APA JF MO-2 $ ,692 25, x 4.5x 5.2x 5.0x 3% 10% 6.0% 53% 33% 13% $55,282 Cabot Oil & Gas COG JF MU-4 $ ,354 10, x 10.2x 9.2x 7.0x 12% 31% 25.0% 0% 100% 0% $34,303 Concho Resources CXO JF SB-1 $ ,204 34, x 8.6x 12.6x 8.9x 36% 43% 19.6% 68% 32% 0% $99,589 ConocoPhillips COP PM MP-3 $ , , x 5.5x 6.9x 6.6x -8% 3% 2.1% 63% 37% 0% $83,427 Continental Resources CLR JF SB-1 $ ,376 32, x 6.3x 8.6x 7.4x 23% 24% 28.1% 55% 45% 0% $114,107 Devon Energy DVN JF MP-3 $ ,767 26, x 5.5x 7.2x 6.7x 0% 8% 21.5% 45% 35% 20% $48,755 EOG Resources EOG JF MO-2 $ ,294 79, x 7.6x 9.8x 8.2x 18% 21% 21.3% 55% 29% 16% $113,162 Hess Corp. HES PM MO-2 $ ,825 25, x 8.8x 10.0x 8.5x -11% 12% 0.9% 65% 35% 0% $95,621 Marathon Oil MRO PM SB-1 $ ,101 23, x 4.8x 6.2x 5.5x 12% 6% 15.9% 64% 36% 0% $57,206 Noble Energy NBL JF MP-3 $ ,222 21, x 6.3x 7.2x 6.2x -8% 10% -1.7% 37% 44% 19% $63,327 Occidental Petroleum OXY PM MO-2 $ ,594 72, x 7.0x 7.5x 6.6x 8% 10% 11.2% 78% 22% 0% $113,528 Pioneer Natural Resources PXD JF SB-1 $ ,423 31, x 6.2x 9.5x 7.1x 18% 18% 19.3% 59% 21% 20% $104,299 Median 31, x 6.3x 7.5x 6.7x 8% 12% 15.9% 58% 35% 0% $83,427 Mean 41, x 6.6x 8.2x 6.9x 8% 16% 13.9% 54% 38% 8% $81,403 SB1= Strong Buy; MO2 = Outperform; MP3 = Market Perform; MU4 = Underperform; S = Suspended. Source: FactSet and Raymond James Research. Pricing as of 10/02/2018 Raymond James E&P Comps Sheet - SMID Caps Priced Market Enterprise EV / EBITDA (RJ) EV / EBITDA (Consensus) Y/Y Production Growth Debt Adj. Production Commodity Mix Value per Name Ticker Analyst Rating 10/2/2018 Cap ($mm) Value ($mm) Growth Oil Gas NGLs Flowing Barrel SMID Caps Antero Resources AR JF MO-2 $ ,646 10, x 4.6x 5.5x 4.2x 18% 24% 16.3% 2% 73% 25% $25,925 California Resources CRC PM MP-3 $ ,343 7, x 6.8x 7.3x 5.6x 3% 5% 2.5% 74% 26% 0% $55,048 Carrizo Oil & Gas CRZO JF SB-1 $ ,024 3, x 3.6x 5.1x 3.6x 12% 34% 17.4% 67% 17% 16% $70,907 Chesapeake Energy CHK JF MU-4 $4.52 4,138 15, x 8.4x 6.4x 6.2x -8% -13% -4.3% 17% 73% 10% $28,377 Cimarex Energy XEC JF MP-3 $ ,177 10, x 6.8x 6.9x 5.9x 14% 16% 14.8% 9% 0% 91% $17,575 CNX Resources Corp. CNX JF MU-4 $ ,072 5, x 6.3x 6.0x 5.9x 24% 16% 10.2% 0% 93% 7% $25,218 Diamondback Energy FANG JF MO-2 $ ,533 24, x 6.6x 15.2x 6.5x 48% 138% 43.3% 73% 12% 15% $216,592 Energen Corporation EGN JF MO-2 $ ,568 9, x 6.4x 9.0x 6.7x 34% 34% 31.8% 58% 21% 21% $96,488 Enerplus Corporation ERF KM MO-2 $ ,102 3, x 5.5x 5.9x 4.9x 5% 4% 8.1% 42% 54% 4% $38,506 Kosmos Energy KOS PM MO-2 $9.55 3,790 4, x 6.0x 6.8x 3.9x 64% 36% 33.4% 100% 0% 0% $114,561 Laredo Petroleum LPI JF MO-2 $7.37 1,708 2, x 3.4x 4.3x 3.7x 18% 15% 13.1% 41% 30% 29% $38,293 Matador Resources MTDR JF MO-2 $ ,864 4, x 7.7x 8.0x 6.5x 32% 18% 11.6% 56% 44% 0% $81,153 Murphy Oil MUR PM MP-3 $ ,865 7, x 3.6x 4.8x 4.3x 4% 5% 6.4% 59% 41% 0% $46,029 National Fuel Gas NFG JF MP-3 $ ,886 6, x 8.8x 8.6x 8.3x 2% 28% 11.4% 8% 92% 0% $78,488 Newfield Exploration NFX JF SB-1 $ ,741 7, x 4.7x 5.1x 4.4x 21% 14% 15.6% 42% 38% 20% $45,197 Oasis Petroleum OAS JF SB-1 $ ,460 7, x 5.4x 7.0x 5.2x 26% 22% 8.4% 76% 24% 0% $90,653 Parsley Energy PE JF SB-1 $ ,440 10, x 5.3x 7.5x 5.7x 63% 35% 48.7% 63% 16% 21% $96,663 QEP Resources QEP JF SB-1 $ ,728 5, x 4.5x 5.6x 5.3x -1% 11% 2.4% 47% 45% 8% $34,904 Range Resources RRC JF MU-4 $ ,251 8, x 6.9x 6.4x 5.9x 11% 10% 9.3% 4% 68% 29% $24,991 SM Energy SM JF MO-2 $ ,687 5, x 5.5x 6.2x 4.9x 0% 19% 7.3% 40% 38% 22% $46,728 Southwestern SWN JF MU-4 $5.16 3,035 6, x 5.4x 4.9x 5.9x 7% -22% -0.1% 2% 86% 12% $15,291 SRC Energy SRCI JF SB-1 $8.76 2,130 2, x 3.1x 4.8x 3.4x 49% 35% 46.4% 46% 33% 20% $57,836 Whiting Petroleum WLL JF SB-1 $ ,834 7, x 3.9x 5.7x 4.9x 10% 13% 9.1% 67% 16% 16% $60,196 WildHorse Resource Development WRD JF SB-1 $ ,353 3, x 4.5x 4.8x 3.9x 60% 21% 34.3% 72% 16% 13% $69,998 WPX Energy WPX JF SB-1 $ ,436 10, x 5.5x 9.2x 6.1x 16% 34% 23.4% 65% 20% 15% $83,916 Median 7, x 5.5x 6.2x 5.3x 16% 18% 11.6% 47% 33% 15% $55,048 Mean 7, x 5.6x 6.7x 5.3x 21% 22% 16.8% 45% 39% 16% $62,381 SB1= Strong Buy; MO2 = Outperform; MP3 = Market Perform; MU4 = Underperform; S = Suspended. Source: FactSet and Raymond James Research. Pricing as of 10/02/2018 ERF is covered by RJ Ltd. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

14 Raymond James E&P Debt Comps - Large Caps Priced Market Net Debt Net Debt / TTM EBITDA Interest Net Debt / Boe Net Debt / Name Ticker Analyst Rating 10/2/2018 Cap ($MM)) ($MM) Most Recent Coverage Proved Developed PV-10 Anadarko Petroleum Corp. APC JF MP $ ,207 10, x 1.5x 1.1x N/A $6.38 N/A N/A Apache Corporation APA JF MO $ ,692 6, x 1.3x 1.1x 10.9x $5.93 $ x Cabot Oil & Gas COG JF MU $ , x 0.5x 0.6x 11.8x $0.29 $ x Concho Resources CXO JF SB $ ,204 3, x 1.4x 0.8x 13.3x $2.96 $ x ConocoPhillips COP PM MP $ ,462 11, x 0.6x 0.6x 17.0x $2.33 $ x Continental Resources CLR JF SB $ ,376 6, x 1.3x 0.8x 10.5x $4.74 $ x Devon Energy DVN JF MP $ ,767 5, x 1.3x 1.3x 4.2x $2.63 $ x EOG Resources EOG JF MO $ ,294 4, x 0.5x 0.3x 18.1x $1.94 $ x Hess Corp. HES PM MO $ ,825 3, x 1.4x 1.4x 6.6x $3.06 $ x Marathon Oil MRO PM SB $ ,101 3, x 0.7x 0.4x 17.4x $2.64 $ x Noble Energy NBL JF MP $ ,222 6, x 2.3x 2.0x 9.1x $4.65 $ x Occidental Petroleum OXY PM MO $ ,594 8, x 0.7x 0.7x 19.5x $3.44 $ x Pioneer Natural Resources PXD JF SB $ ,423 1, x 0.4x 0.1x 15.3x $1.41 $ x Median 26,376 5, x 1.3x 0.8x 12.5x $2.96 $ x Mean 35,655 5, x 1.1x 0.9x 12.8x $3.26 $ x SB1= Strong Buy; MO2 = Outperform; MP3 = Market Perform; MU4 = Underperform; S = Suspended. Source: FactSet and Raymond James Research. Pricing as of 10/02/2018 Raymond James E&P Debt Comps - SMID Caps Priced Market Net Debt Net Debt / TTM EBITDA Interest Net Debt / Boe Net Debt / Name Ticker Analyst Rating 10/2/2018 Cap ($MM)) ($MM) Most Recent Coverage Proved Developed PV-10 Antero Resources AR JF MO $ ,646 5, x 2.6x 2.3x 5.2x $1.82 $ x California Resources CRC PM MP $ ,343 5, x 5.9x 4.7x 1.6x $8.15 $ x Carrizo Oil & Gas CRZO JF SB $ ,024 1, x 2.1x 1.3x 7.5x $6.15 $ x Chesapeake Energy CHK JF MU $4.52 4,138 10, x 4.0x 5.3x 5.1x $5.70 $ x Cimarex Energy XEC JF MP $ ,177 1, x 1.0x 0.9x 17.7x $2.26 $ x CNX Resources Corp. CNX JF MU $ ,072 2, x 2.5x 3.1x 5.2x $2.03 $ x Diamondback Energy FANG JF MO $ ,533 1, x 2.3x 0.7x 25.3x $5.53 $ x Energen Corporation EGN JF MO $ , x 0.9x 0.7x 20.2x $1.86 $ x Enerplus Corporation ERF KM MO $ , x 0.4x 0.2x 12.6x $1.47 $ x Kosmos Energy KOS PM MO $9.55 3,790 1, x 3.2x 1.8x 4.8x $9.44 $ x Laredo Petroleum LPI JF MO $7.37 1, x 1.3x 1.1x 7.8x $4.01 $ x Matador Resources MTDR JF MO $ , x 1.6x 1.6x 13.4x $2.86 $ x Murphy Oil MUR PM MP $ ,865 2, x 1.0x 0.8x 8.0x $2.87 $ x National Fuel Gas NFG JF MP $ ,886 1, x 2.2x 2.5x 6.5x $4.24 $ x Newfield Exploration NFX JF SB $ ,741 2, x 1.9x 1.6x 12.2x $5.36 $ x Oasis Petroleum OAS JF SB $ ,460 2, x 2.6x 2.0x 6.0x $8.98 $ x Parsley Energy PE JF SB $ ,440 1, x 1.5x 1.1x 6.9x $4.76 $ x QEP Resources QEP JF SB $ ,728 2, x 2.5x 2.2x 6.0x $3.92 $ x Range Resources RRC JF MU $ ,251 3, x 3.2x 3.4x -5.6x $1.91 $ x SM Energy SM JF MO $ ,687 1, x 2.8x 2.3x 4.5x $4.18 $ x Southwestern SWN JF MU $5.16 3,035 3, x 1.3x 2.2x 8.0x $1.43 $ x SRC Energy SRCI JF SB $8.76 2, x 1.0x 0.5x N/A $2.19 $ x Whiting Petroleum WLL JF SB $ ,834 2, x 1.9x 1.2x 5.7x $4.47 $ x WildHorse Resource Development WRD JF SB $ , x 1.4x 1.0x 9.8x $2.02 $ x WPX Energy WPX JF SB $ ,436 2, x 1.9x 1.1x -5.2x $4.70 $ x Median 4,138 1, x 1.9x 1.6x 6.7x $4.01 $ x Mean 5,232 2, x 2.1x 1.8x 7.9x $4.09 $ x SB1= Strong Buy; MO2 = Outperform; MP3 = Market Perform; MU4 = Underperform; S = Suspended. Source: FactSet and Raymond James Research. Pricing as of 10/02/2018 ERF is covered by RJ Ltd. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

15 For integrated oil and gas companies, whose day-to-day trading dynamics typically resemble large-cap E&Ps, the following valuation table provides more detail on individual company multiples as well as our ratings. Raymond James - Integrated Oil and Gas Research Universe Market Valuation Database Current Equity RJ Valuation Ratios Consensus Valuation Ratios Price 3-Month Value EV / EBITDA Price / EPS EV / EBITDA Price / EPS Company Ticker Rating 10/3/2018 Volume ($ MM) BP plc * BP MP3 $ ,072, , x 4.5x 14.1x 12.5x Cenovus Energy * CVE MP3 $ ,198,400 12, x 6.1x NM 13.7x Chevron Corp. CVX MO2 $ ,270, , x 5.6x 14.3x 14.0x 6.5x 5.7x 16.1x 13.6x China Petroleum & Chemical SNP NC $ , , x 2.9x 10.0x 9.6x CNOOC Ltd. CEO NC $ ,399 87, x 4.0x 10.5x 9.6x Ecopetrol S.A. EC MU4 $ ,004,430 56, x 5.1x 12.5x 11.8x 6.3x 6.2x 13.4x 12.6x Eni SpA * E MO2 $ ,560 68, x 3.1x 13.5x 11.4x Equinor ASA EQNR NC $ ,555 93, x 3.3x 14.2x 12.6x Exxon Mobil Corp. XOM MP3 $ ,212, , x 6.9x 18.4x 15.9x 8.2x 7.1x 18.5x 15.3x Imperial Oil * IMO MO2 $ ,349 27, x 8.3x 18.4x 14.9x PetroChina Co. PTR NC $ , , x 3.2x 17.8x 15.1x Petróleo Brasileiro PBR MP3 $ ,709,054 88, x 2.7x 8.0x 5.8x 5.0x 4.5x 9.7x 7.8x Royal Dutch Shell plc * RDS.A-US MO2 $ ,533, , x 5.1x 12.6x 10.5x Suncor Energy * SU MO2 $ ,833,705 65, x 6.0x 16.2x 12.9x Total S.A. * TOT MO2 $ ,143, , x 4.6x 11.9x 10.4x YPF S.A. YPF SB1 $ ,322,386 6, x 2.6x 30.3x 10.6x 3.8x 3.1x 11.9x 7.8x Median $91, x 5.1x 14.3x 11.8x 5.1x 4.5x 13.5x 12.5x Mean $124, x 4.6x 16.7x 11.6x 5.6x 4.9x 13.9x 11.9x SB1 = Strong Buy; M O2 = Outperform; M P3 = M arket Perform; M U4 = Underperform; NC = Not Covered Source: FactSet, Raymond James research * CVE, IM O, and SU are covered by RJ Ltd. E, RDS, and TOT are covered by RJ Europe. BP is co-covered with RJ Europe. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

16 Oilfield Services Stock Performance in 3Q18 and TTM RJ Oilservice Universe- 12 Month Trailing Stock Performance RJ Oilservice Universe- 3Q18 Stock Performance 3-TUSK 2-TTI 3-NE 3-RDC 2-DWSN 3-ESV WTI 2-HLX 3-DO 4-RIG 2-OIS 1-UNT 1-PUMP 2-NOV 3-PES 3-HCLP 3-FTI OSX 2-CCLP 1-NR 1-SPN 2-USAC 1-HAL 3-SLB 1-PTEN 1-NBR 1-RES 2-NCSM -40% -20% 0% 20% 40% 60% 80% Source: Raymond James research, Factset 2-HLX 3-RDC 3-ESV 1-SPN 1-RES 2-NCSM 3-NE 1-PUMP 1-UNT 4-RIG 2-OIS 2-NOV 1-NBR WTI 2-CCLP 1-PTEN OSX 2-USAC 1-NINE 3-DO 3-FTI 1-NR 2-TTI 3-SLB 3-HCLP 1-HAL 2-WFT 3-TUSK 2-DWSN 3-PES -50% -40% -30% -20% -10% 0% 10% 20% 30% Source: Raymond James research, Factset Source: FactSet, Raymond James research. 3Q18 saw oil service stocks continue positive momentum. Service stocks were mostly up in the quarter as positive sentiment surrounded the offshore/international arena and as the market rewarded oilservice resilience amidst industry bottlenecks. Leading our coverage universe were the offshore-levered names, spurred by Brent moving to the $75-85/Bbl range. Helix (HLX) in particular stole the show (+24%) as it benefitted from operators being more inclined to allocate capital towards less intensive investment into offshore production enhancement and intervention work. Not far behind Helix, Rowan (RDC) and Ensco (ESV) performed well in the quarter (up 23% and 22%, respectively) driven by positive sentiment surrounding Brent prices. However, although offshore tender activity has picked up, the sheer quantity of rigs in the market has kept dayrates depressed, which we believe should continue to drive weak fundamentals in the near term. That said, international activity is starting to show signs of life, which could lead to stronger overall performance from the group. Last, but not least, we turn our attention to the second best performing group: the pressure pumpers. Despite conversations surrounding overcapacity of horsepower in the market, we saw names such as Propetro (PUMP) and Superior (SPN) get rewarded by the investment community (+15% and +19%, respectively) for top-notch service execution and stable frac calendars that have led to firm customer commitment in otherwise uncertain times for growth at all costs competitors. Conversely, a few names in our group saw underperformance in the quarter, namely PES (-44%), DWSN (-16%), TUSK (-14%), and WFT (-12%). Which are the most attractive oil service stocks? With the recovery in full swing and our group indicating a range-bound oil price level at the current $70-75/Bbl range, we think investors need to be overweight oil service stocks and maintain strong exposure to the space. Our group s call is for oil prices to continue chugging along at healthy and sustainable levels, which should support higher service stock prices. Our favorite oilfield service names are U.S. land-levered pressure pumping names with proven dedicated customer models, namely ProPetro (PUMP), Halliburton (HAL), and Superior (SPN); (2) companies in specific niche growth markets, namely Newpark Resources (NR); (3) emerging completions technologies, namely NINE Energy Service (NINE) and NCS Multistage (NCSM); (4) growth-oriented onshore names with significant financial and operational leverage to commodity price movements, such as Unit Corp. (UNT); and (5) companies with leverage to the offshore recovery via capital-light production enhancement such as Helix (HLX) and robust manufacturing backlogs such as National Oilwell Varco (NOV). Once the market signals an acceptance of higher oil prices for longer, those names with longer-term fundamentals or international leverage may become relatively more attractive. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

17 RAYMOND JAMES ENERGY RESEARCH - OIL SERVICE COMPARISON TABLES - VALUATION RATIOS Market Valuation ($MM) Consensus Consensus Valuation Raymond James Consensus Valuation Raymond James As of: 10/3/2018 RJ Market Total Enterprise P/Sales P/E Ratio P/E Ratio EV/EBITDA EV/EBITDA Rating Cap Debt Value 2018E E 2019E 2018E 2019E E 2019E 2018E 2019E COMPLETION & FRAC CJ C&J ENERGY SERVICES NR $1,475 $0 $1, x 19.8x 26.3x 5.4x 4.6x 4.4x HAL HALLIBURTON SB1 $36,700 $10,871 $45, x 10.4x 20.6x 16.7x 21.3x 13.4x 6.3x 10.2x 9.0x 10.4x 8.0x FRAC KEANE GROUP INC NR $1,421 $351 $1, x 15.4x 20.1x 4.2x 4.5x FTSI FTS International NR $1,329 $629 $1, x 4.2x 5.2x 4.0x 4.9x LBRT LIBERTY OILFIELD SERVICES NR $1,581 $107 $1, x 9.6x 12.1x 4.0x 4.2x TUSK MAMMOTH ENERGY MP3 $1,339 $6 $1, x 6.7x 7.6x 6.9x 8.9x 2.7x 3.3x 2.9x 3.7x PTEN PATTERSON UTI SB1 $3,892 $1,119 $4, x 12.2x NM NM NM NM 4.8x 6.1x 5.5x 6.0x 4.8x PUMP PROPETRO SB1 $1,473 $0 $1, x 7.9x 8.8x 9.3x 7.0x 4.3x 4.3x 26.6x 25.1x RES RPC SB1 $3,487 $0 $3, x 14.2x 17.0x 18.8x 17.4x 14.1x 5.3x 8.0x 8.1x 8.2x 6.7x SPN SUPERIOR ENERGY SB1 $1,615 $1,281 $2, x 5.8x NM NM NM NM 2.3x 7.4x 6.5x 7.2x 5.5x Completion Average 1.0x 11.4x 12.6x 14.4x 13.7x 10.9x 4.8x 5.6x 5.5x 10.2x 9.0x DIVERSIFIEDS BHGE BAKER HUGHES NR $13,276 $7,386 $15, x 7.6x 44.6x 21.8x 8.0x 13.2x 10.1x 17.8x HAL HALLIBURTON SB1 $36,700 $10,871 $45, x 10.4x 20.6x 16.7x 21.3x 13.4x 6.3x 10.2x 9.0x 10.4x 8.0x SLB SCHLUMBERGER MP3 $85,663 $17,601 $100, x 11.1x 34.9x 25.0x 32.7x 24.8x 7.4x 14.3x 12.1x 14.2x 11.6x WFT WEATHERFORD MO2 $2,802 $7,929 $10, x 2.9x NM NM NM NM 3.5x 13.6x 9.4x 13.1x 8.1x Diversifieds Average 1.3x 8.0x 33.4x 21.1x 27.0x 19.1x 6.3x 12.8x 10.2x 13.9x 9.2x MANUFACTURERS DRQ DRIL QUIP NR $1,935 $0 $1, x 10.1x NM NM 4.7x NM 38.0x FTI FMC TECHNOLOGIES MP3 $14,099 $3,990 $12, x 10.0x 23.0x 20.4x 20.6x 20.9x 9.5x 7.9x 8.0x 17.0x 16.6x FET FORUM NR $1,155 $467 $1, x 5.7x NM 35.6x 4.6x 15.0x 10.7x GDI GARDNER DENVER NR $5,591 $1,911 $7, x 15.2x 14.3x 10.4x 9.8x NOV NATIONAL OILWELL VARCO MO2 $16,988 $2,715 $18, x 7.3x NM 43.9x NM 32.8x 4.1x 20.4x 14.5x 20.3x 12.7x NCSM NCS MUTLISTAGE NR $752 $25 $ x 31.2x 17.3x 25.7x 15.2x 13.3x 8.5x 13.2x 8.2x OII OCEANEERING NR $2,658 $782 $3, x 6.7x NM NM 3.6x 19.9x 15.0x OIS OIL STATES MO2 $2,010 $350 $2, x 9.1x NM 49.1x NM 37.2x 4.9x 15.4x 12.0x 14.9x 10.6x TWIN TWIN DISC NR $296 $5 $ x NM 27.6x 13.7x 14.2x 13.4x 7.1x WHD CACTUS WELLHEADS NR $2,859 $16 $2, x 21.0x 17.7x 13.3x 11.6x Manufacturers Average 2.4x 8.2x 23.6x 26.5x 23.2x 26.5x 6.5x 14.3x 13.5x 16.4x 12.0x LAND DRILLERS HP HELMERICH & PAYNE NR $7,625 $494 $7, x 11.3x NM NM 5.0x 13.0x 10.0x NBR NABORS DRILLING SB1 $2,311 $3,819 $5, x 4.9x NM NM NM NM 3.3x 7.3x 5.5x 7.3x 5.5x PKD PARKER DRILLING NR $28 $579 $ x 0.6x NM NM 1.9x 7.8x 4.6x PTEN PATTERSON UTI SB1 $3,892 $1,119 $4, x 12.2x NM NM NM NM 4.8x 6.1x 5.5x 6.0x 4.8x PES PIONEER ENERGY SERVICES MP3 $224 $463 $ x 9.2x NM NM NM NM 2.4x 7.7x 5.8x 7.7x 5.7x PDS PRECISION DRILLING NR $1,002 $1,320 $2, x 5.4x NM NM 3.3x 7.8x 6.1x UNT UNIT CORPORATION SB1 $1,454 $657 $2, x 6.2x 32.0x 22.8x 28.0x 20.9x 2.9x 6.3x 5.5x 5.9x 5.4x Onshore Drillers Average 1.1x 7.1x 32.0x 22.8x 28.0x 20.9x 3.4x 8.0x 6.1x 6.7x 5.3x OFFSHORE DRILLERS DO DIAMOND OFFSHORE MP3 $2,765 $1,973 $4, x 6.4x NM NM NM NM 3.8x 16.7x 16.3x 16.8x 15.4x ESV ENSCO MP3 $3,676 $4,995 $7, x 1.4x NM NM NM NM 3.3x 27.4x 23.4x 28.8x 36.1x NE NOBLE MP3 $1,727 $3,843 $5, x 2.4x NM NM NM NM 2.8x 17.4x 17.2x 17.9x 18.5x RDC ROWAN COMPANIES MP3 $2,391 $2,511 $3, x 8.8x NM NM NM NM 5.3x NM NM NM NM SDRL SEADRILL NR $2,551 N/A $20, x 9.8x NM NM 7.8x NM NM RIG TRANSOCEAN MU4 $6,457 $9,630 $13, x 2.8x NM NM NM NM 3.4x 12.4x 11.6x 12.3x 13.3x Offshore Drillers Average 2.2x 5.3x 4.4x 18.5x 17.1x 19.0x 20.8x OFFSHORE CONSTRUCTION GIFI GULF ISLAND FABRICATION NR $151 $0 $ x 9.6x NM 33.4x 2.2x NM 6.8x HLX HELIX ENERGY SOLUTIONS MO2 $1,469 $459 $1, x 5.4x NM 27.8x 40.6x 22.2x 4.4x 10.2x 8.2x 9.8x 8.0x MDR MCDERMOTT NR $3,138 $3,460 $5, x NM 12.0x 8.6x NM 7.5x 5.4x PROPPANTS & SAND CRR CARBO CERAMICS NR $201 $88 $ x 3.0x NM NM 1.5x NM 7.3x EMES EMERGE ENERGY NR $128 $203 $ x 1.1x 4.9x 3.8x 2.5x 3.8x 3.6x FMSA FAIRMOUNT SANTROL NR $1,171 $1,636 $2, x 1.7x 5.6x 7.8x 6.8x 4.2x 5.2x HCLP HI-CRUSH PARTNERS MP3 $1,034 $195 $1, x 3.8x 4.6x 5.0x 8.3x 4.0x 3.9x 41.5x 35.2x SND SMART SAND NR $182 $45 $ x 4.9x 4.3x 3.4x 3.0x SOI SOLARIS OILFIELD MP3 $859 $0 $ x 10.2x 6.9x 10.1x 6.6x 6.8x 4.5x 6.8x 4.3x SLCA U.S. SILICA NR $1,504 $1,267 $2, x 7.9x 7.9x 8.9x 10.2x 5.2x 5.0x Proppants Average 1.2x 3.5x 6.3x 6.1x 10.1x 6.6x 5.9x 4.6x 4.6x 24.1x 19.7x MISCELLANEOUS CLB CORE LABORATORIES NR $5,258 $242 $5, x 20.3x 48.8x 38.4x 14.6x 33.2x 27.4x DWSN DAWSON GEOPHYSICAL MO2 $143 $7 $ x NM NM NM NM 7.9x 5.6x 7.9x 5.6x FTK FLOTEK INDUSTRIES NR $137 $49 $ x 2.5x NM NM 2.0x NM NM NCSM NCS MUTLISTAGE NR $752 $25 $ x 31.2x 17.3x 25.7x 15.2x 13.3x 8.5x 13.2x 8.2x NR NEWPARK RESOURCES SB1 $949 $197 $1, x 12.5x 24.3x 14.8x 23.9x 13.9x 6.2x 9.0x 6.9x 9.1x 6.8x RNET RIGNET NR $393 $58 $ x 23.3x NM NM 6.1x 15.5x 13.2x NESR NATIONAL ENERGY SERVICES REUNITED NR $984 $306 $1, x 13.1x 10.1x 7.4x 6.3x TTI TETRA TECHNOLOGIES MO2 $549 $856 $1, x 16.2x NM 19.6x 40.4x 17.6x 8.2x 8.2x 6.6x 8.2x 6.5x WTTR SELECT ENERGY SERVICES NR $958 $81 $1, x 12.0x 10.1x 5.3x 4.4x CEU-TSE CES ENERGY SOLUTIONS SB1 $835 $320 $1, x 12.9x 19.8x 14.4x 18.7x 12.3x 8.4x 8.6x 7.0x 8.1x 6.6x Miscellaneous Average 1.8x 14.6x 24.9x 17.8x 27.2x 14.8x 7.6x 12.1x 9.5x 9.3x 6.7x COMPRESSION AROC ARCHROCK INC NR $1,576 $1,459 $3, x 17.7x 43.9x 24.2x 4.6x 9.2x 7.9x CCLP COMPRESSCO PARTNERS MO2 $225 $685 $ x 11.3x NM NM NM NM 11.2x 8.7x 7.4x 8.6x 6.8x NGS NATURAL GAS SERVICES NR $268 $0 $ x 18.5x NM 49.3x 4.6x 8.5x 6.8x USAC USA COMPRESSION MO2 $1,502 $1,658 $3, x 27.8x NM NM NM NM 32.8x 11.6x 9.3x 12.3x 8.9x Compression Average 2.2x 18.8x 43.9x 36.8x 13.3x 9.5x 7.9x 10.5x 7.9x Sources: Raymond James Research, Factset International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

18 2-Jan 2-Feb 2-Mar 2-Apr 2-May 2-Jun 2-Jul 2-Aug 2-Sep 2-Oct 2-Nov 2-Dec $ / Bbl Raymond James Independent Refiners Stock Performance in 3Q18 and TTM RJ Refiners Universe Quarterly Stock Price Performance MO2 - PBF MP3 - ANDV SB1 - MPC S&P 500 MO2 - VLO MP3 - HFC MO2 - PSX SB1 - DK RJ Refiners Universe - Quarterly Stock Price Performance -20% -10% 0% 10% 20% 30% Source: FactSet, Raymond James research MP3 - ANDV TTM Stock Price Performance MP3 - HFC MO2 - PBF SB1 - DK MO2 - VLO SB1 - MPC MO2 - PSX S&P 500 RJ Refiners Universe - TTM Stock Price Performance 0% 20% 40% 60% 80% 100% Source: FactSet, Raymond James research Source: FactSet, Raymond James research. This analysis does not include transaction costs and tax considerations. If included these costs would reduce an investor s return. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. A complete record of our stock recommendations for the trailing 12 months is available upon request. Outlook on the Refining Industry Over the past several years, the U.S. refining industry has been among the primary beneficiaries of several changes to the global oil (and gas) market. First, in the wake of the domestic shale revolution, refiners saw earnings driven higher by wide crude price differentials between the U.S. and international markets (particularly benefitting inland-weighted refiners) on the back of rapidly growing domestic supply. Further, as the price of oil collapsed starting in late-2014, oil demand growth has re-emerged at much faster rates, supporting overall refining margins (though offset in 2016 and early 2017 by increased refined product supply). More recently, with robust U.S. production growth reemerging across several basins (largely in the Permian), the competitive advantage afforded by discounted U.S. crude (and natural gas) has once again arisen as a strong tailwind for the group. Indeed, in the summer of 2017, the disruptions from Hurricane Harvey contributed to a resurgence in the Brent-WTI spread that has remained elevated despite persistently high U.S. crude exports as well as recent draws at Cushing. Looking ahead, we fully expect that the WTI-Brent spread will continue to experience some volatility, but in the long term, we envision WTI trading at a continued discount to seaborne international crudes. Global cracks priced off seaborne crudes sat well in line U.S. - NYMEX WTI Crack Spread $45 with last year s level for the majority of the quarter, $40 though into quarter end rising product inventories led $35 crack spreads slightly lower (while 2017 levels saw a $30 substantial bump from Hurricane Harvey). Looking $25 $20 forward, we expect fall maintenance season and $15 continued strength from product exports to support $10 cracks. Overall, with global economic activity $5 encouraging, we believe a continuation of strong $0 demand trends for the remainder of 2018 could work down inventories to more attractive levels. Indeed, Source: Bloomberg 5-Yr. Range both gasoline and diesel demand have exceeded our expectations (particularly diesel), and we continue to believe strong global economic trends and an uptick in U.S. drilling-related demand may further boost the outlook. Overall, with the meaningful improvements to the fundamental refining backdrop during the start of 2018 seemingly poised to International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

19 Capacity utilization (%) Raymond James extend through year end, coupled with the upside from IMO 2020, we believe the outlook for the independent refining group remains quite attractive for 2018 and beyond, despite valuations that are above historical norms. When product demand is robust, refineries can run at average utilization rates in excess of 90%. When demand is weak, and product inventories are high as a result, refiners cut back on throughput (as seen by economic run cuts by several refineries in February 2017). As shown in the following graphic, U.S. refinery utilization was on a g enerally downward trend from 2005 to 2010 but trended towards higher average rates since. Regional trends can vary con siderably, particularly between the Mid-Continent region and lower-margin East Coast. Recently, refiners have been running at fairly high utilization rates as attractive domestic crude prices have incentivized operators to run hard. 100% U.S. Refinery Utilization 90% 80% 70% 60% Hurricanes Katrina and Rita Hurricanes Gustav and Ike Hurricanes Harvey and Irma Source: EIA Our benchmark crack spread assumptions are shown in the following table. We would caution that these crack spreads are based off Brent and do not represent the actual margin capture expected for any given refinery. U.S. East Coast Brent-based Crack Spread Estimates Q1 15A Q2 15A Q3 15A Q4 15A 2015A Current RJ est. $14.92 $18.01 $18.29 $13.44 $16.17 Gasoline $10.68 $18.32 $19.42 $13.97 $15.60 Diesel $23.41 $17.39 $16.03 $12.39 $17.31 Q1 16A Q2 16A Q3 16A Q4 16A 2016A Current RJ est. $11.76 $15.34 $13.50 $14.80 $13.85 Gasoline $12.37 $16.90 $13.81 $14.63 $14.43 Diesel $10.53 $12.22 $12.88 $15.14 $12.69 Q1 17A Q2 17A Q3 17A Q4 17A 2017E Current RJ est. $11.65 $13.96 $19.12 $14.51 $14.81 Gasoline $11.13 $14.47 $19.78 $12.86 $14.56 Diesel $12.68 $12.93 $17.80 $17.80 $15.30 Q1 18A Q2 18A Q3 18A Q4 18E 2018E Current RJ est. $12.55 $13.12 $13.31 $13.33 $13.08 Gasoline $10.79 $11.78 $11.92 $10.00 $11.12 Diesel $16.08 $15.79 $16.10 $20.00 $16.99 Q1 19E Q2 19E Q3 19E Q4 19E 2019E Current RJ est. $12.67 $14.17 $16.17 $16.33 $14.83 Gasoline $9.00 $12.50 $13.00 $12.00 $11.63 Diesel $20.00 $17.50 $22.50 $25.00 $21.25 Source: Bloomberg, Raymond James research Note: Actuals are calculated by averaging weekly closing prices Outlook on Independent Refiners Looking back to 2017, as the initial post-election bump faded through the first half of the year, the improving fundamental picture began to emerge throughout the summer ahead of a substantial boost from Hurricane Harvey in August. As the storm passed, the refining margin and crude price differential outlook remained largely positive, while the group received another bump from the corporate tax reform. In 2018, with tight product markets and corporate tax reform setting the stage, continued strength bolstered by wider domestic crude differentials (particularly in the Permian) has thus far driven the group even higher. Recall, we had initially called for gains of 5-15% at the start of the year, but with differentials International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

20 P/E multiple Raymond James remaining materially wider than we had initially forecasted (even as they ve pulled back in the past month), combined with the impending benefit from IMO 2020 already creeping into the group, are initial estimates were likely conservative. Indeed, we still see the potential for even higher gains if margins materialize above our expectations, a RINs fix ends up materializing, or IMO drives the future crack strip higher than we had envisioned. Looking ahead, the aforementioned pending regulatory changes to the marine fuel (shipping) market, known in simple form as IMO 2020, likely represent a further catalyst for U.S. independent refiners. This is particularly true of those that can process heavier grades of crude oil (which is anticipated to be oversupplied) into distillate fuel (which is expected to see a demand and margin boost) in the wake of this regulatory change. We also expect continued growth in higher-value midstream businesses (both via dropdowns and organic capital) as a multi-year tailwind for cash flow generation and valuations. That said, several potential pitfalls remain the group remains highly reliant on global petroleum demand, which in turn relies almost wholeheartedly on global trade and economic growth. Therefore, while we believe the global demand landscape remains encouraging, any shocks to the worldwide economy would likely spell trouble for refining. Bottom line, we believe there is an increasing number of structurally positive elements to the U.S. refining story over the next few years and would recommend investors remain overweight the sector with regard to energy exposure. While it is tough to wrap a precise band around the forward P/E multiples of independent refiners, given the sharp volatility of crack spreads (and hence earnings), we believe a range of about 8x to 12x reflects average historical valuations, as shown in the chart that follows. In our view, more rational capacity growth, disciplined capital allocation, robust returns to shareholders, and growth in higher-value businesses supports above-historical valuations for the refining group particularly with the earnings and cash flow boost from lower tax rates. Currently, refiners trade at a median 2019 EPS multiple of 11.4x (consensus estimates). 24 Independent Refiners: Consensus Forward-Year P/E Multiples Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Valuation Range Median Source: FactSet Priced as of 9/28/2018 The following valuation table provides more detail on individual company multiples as well as our ratings. Raymond James - Independent Refiners Research Universe Market Valuation Database Market Valuation Raymond James Valuation Ratios Consensus Valuation Ratios Current ($ MM) Enterprise Value / Price / Ent. Value / Price / Price 3-Month Equity Ent. Bbl of Daily EBITDA EPS EBITDA EPS Company Ticker Rating 10/3/2018 Volume Value Value Capacity EDC CVR Energy CVI NC $ ,187 3,576 4,207 22,739 1, x 4.9x 16.4x 12.1x Delek US Holdings DK SB1 $ ,706,978 3,804 4,714 15,609 1, x 3.1x 8.7x 4.6x 5.1x 3.9x 8.0x 5.3x HollyFrontier Corp. HFC MP3 $ ,326,546 12,669 14,061 30,768 2, x 5.4x 12.8x 8.4x 7.6x 6.8x 13.2x 9.3x Marathon Petroleum MPC SB1 $ ,451,176 39,454 51,717 27,494 2, x 5.7x 15.8x 8.5x 7.1x 4.9x 16.4x 11.5x PBF Energy PBF MO2 $ ,791,632 6,196 7,933 8, x 4.3x 15.8x 7.6x 7.0x 5.4x 19.2x 10.1x Phillips 66 PSX MO2 $ ,491,264 55,658 65,138 30,784 2, x 7.3x 14.3x 10.3x 9.0x 7.9x 14.8x 11.8x Valero Energy VLO MO2 $ ,791,355 51,216 55,823 17,835 1, x 5.9x 18.3x 9.5x 8.9x 6.7x 18.0x 11.4x Median $12,669 $14,061 22,739 1, x 5.5x 15.0x 8.4x 7.1x 5.4x 16.4x 11.4x Mean $24,653 $29,085 22,029 1, x 5.3x 14.3x 8.1x 7.3x 5.8x 15.1x 10.2x SB1 = Strong Buy; MO2 = Outperform; MP3 = Market Perform; MU4 = Underperform; NC = Not Covered Source: FactSet, Oil & Gas Journal, Raymond James research EDC = Equivalent Distillation Capacity Long-term debt on a GAAP basis includes non-recourse debt associated with respective MLPs International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida