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INVESTMENT OVERVIEW ODESSA, TEXAS

5381 West 42nd Street Odessa, TX 79764

31,660 SF | 4.0 Acres | 9.2% CAP

EXECUTIVE SUMMARY

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INVESTMENT OVERVIEW ODESSA, TEXAS

PERFORMANCE WELLHEAD & FRAC COMPONENTS It is Jackson Cooksey’s pleasure to present the following investment opportunity to purchase a two-building portfolio consisting of recently constructed, state of the art industrial facilities currently owned by Performance Wellhead.

Founded in 2006, Performance Wellhead & Frac Components, Inc. is a leading oil and gas service company specializing in surface well-control equipment and related field services utilized in all phases of drilling, well-stimulation, production, and intervention operations. We have earned a stellar reputation for providing quality, dependable, safe equipment, as well as exceptional field service and support functions. Performance Wellhead & Frac Components, Inc. is well represented by an exceptional, experienced management team of oil and gas professionals who together bring a combined total of 200+ years of industry experience.

Performance Wellhead and Frac Components, Inc. is totally committed to preventing the accidental loss of any of its resources, including employees and physical assets. In fulfilling this commitment to protect both people and property, management will provide and maintain a safe and healthy work environment, in accordance with industry standards and in compliance with legislative requirements, and will strive to eliminate any foreseeable hazards which may result in property damage, accidents, or personal injury/illness.

Performance Wellhead & Frac Components, Inc. supports our safety initiatives through active participation with IS Networld, PEC and Disa.

SLINGSHOT SUPPLY MERGER In February 2017, Pelican Energy Partners announced the recapitalization and combination of Performance Wellhead & Frac Components, Inc. (“Performance”) and Slingshot Supply, Inc. (“Slingshot”).

Performance and Slingshot have combined to provide a larger asset base and broader geographic reach to support their customers across the oilfield. Since the two companies have minimal geographic overlap, they will both continue to operate under their legacy names in their respective markets. Slingshot, based in Odessa, was founded by Jeff Helmcamp in 2011. Slingshot is focused on the Permian market and has become a provider of choice for major operators in the basin. In addition to the services and equipment that Performance provides, Slingshot provides BOP rental and repair, and is the exclusive licensed provider of the Power Feed-Thru Systems & Connectors product line (“PFT”) for use in artificial lift systems in the Permian. The PFT product line consists of patented wellhead products used to facilitate a seamless power connection with electric submersible pumps.

Jeff Helmcamp, who will continue as COO of the combined business, said, “This partnership takes us to the next level — extending our product lines and services to exceed our customers’ expectations as their needs continue to grow.”

Jeff and the team at Slingshot have built an excellent company that is well regarded across the Permian. He and his team are excited to bring these like-minded organizations together so that they can better serve customers in more basins with a set of products and services that span drilling, completion and production.

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FINANCIAL SUMMARY

ODESSA, TEXAS

INVESTMENT SUMMARY OVERVIEW

ADDRESS 5381 West 42nd Street Odessa, Texas 79764

RENTABLE BUILDING AREA 31,660 SF

YEAR BUILT 1982, 2002, 2015

NO. OF TENANTS 1

PERCENT OCCUPIED 100%

FINANCIAL SUMMARY

Year 1 NOI (projected) $258,000

PROPERTY OVERVIEW

BUILDING A 8,030 SF

BUILDING B 6,000 SF

BUILDING C 5,750 SF

BUILDING D 11,880 SF

SHOP (Total) +/- 27,660 SF

OFFICE (Total) +/- 4,000 SF

ACERAGE 4.0

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LOCAL ECONOMY

ODESSA, TEXAS

ECONOMIC GROWTH

The Combined Midland-Odessa general economy has seen double-digit percentage

year-over-year increases in general spending, auto spending, hotel/motel spending,

construction, home building, and existing homes sales activity. General real

(inflation-adjusted) spending per September sales tax receipts was up by over 40%

compared to September of a year ago, and was up 34% for the third quarter. With

over 20 large oil and gas corporations headquartered in the region, and numerous

major companies such as Chevron, Conoco and Exxon Mobil with an established

presence in the Permian Basin, economists project continued growth throughout the

region.

The surge in interest in the Permian Basin continues to drive up land prices. Investors

and occupiers are now paying more than $60,000 per acre, nearly double the

average price paid in 2014. With oil production increasing in the area, the price for

real estate is expected to rise over the next 5 years. The Midland-Odessa Regional

Economic Index posted another strong monthly increase in September rising to

209.7 for the month, up from 205.1 in August, and up 8.9% from the September 2016

MOREI of 191.0. The improvement in September is the 11th consecutive monthly

increase, over which time the Midland-Odessa Regional Economic Index has

expanded by 9.4%. Third quarter growth was stout as well with annualized growth in

the MOREI of 17% over the course of the quarter.

The expansion and recovery in the regional oil and gas economy reached the year-

long mark in September with the 12th consecutive monthly increase in the Texas

Permian Basin Petroleum Index, a tracking device for the Texas portion of the

Permian Basin utilizing data primarily from Texas Railroad Commission districts 7C,

8, and 8A.

MANUFACTURING AND LOGISTICS Since the early days of petroleum exploration in Texas, the Permian Basin has established itself as the leader in crude oil production and associated energy revenues that have provided for substantial investment in the West Texas region. Occupancy in this market is driven by the unique strength of the oil and gas industry, and with Midland-Odessa’s key location at the intersection of Interstate 20, the La Entrada al Pacifico Trade Corridor, and the Ports to the Plains Corridor connecting Mexico and Canada, the Midland Odessa industrial market provides the link between West Texas crude and the greater energy marketplace. The critical role of Midland Odessa and the high demand by oil field service companies in this immediate area makes it a hotspot for industrial space. In addition to the critical role Midland-Odessa plays in crude oil exports, it is also the gateway to West Texas, serving as the logistics, distribution, and warehousing hub that brings in supplies from across the country. While the oil and gas industry is key to the local economy, the aerospace, ranching and agriculture, health care, retirement, and transportation all play a major part as well; spurring increasingly more demand for industrial properties. The Midland International Airport along with its Foreign Trade Zone 165 and service by Union Pacific Railroad provide additional demand for logistics, distribution, and warehousing as well. As the demand for West Texas crude oil increases and outside investment in the area rises, so too will the demand for industrial space in this market.

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LOCAL ECONOMY ODESSA, TEXAS

DOMESTIC OIL PRODUCTION

Research shows that while total U.S. oil production may lag behind 2015 peaks, West Texas production is on the rise. Nationwide projections show that Texas will continue to account for approximately half of the total continental U.S. oil production. Over the past few years, oil production from the Eagle Ford Basin has been rapidly declining; research suggests this trend is likely to continue. The continued growth in oil production from Texas is expected to come from the Permian Basin. The oil and gas industry invested more than $28 billion in land grabs around the Permian Basin in 2016, three times more than what was spent in this region the prior year. The major shift towards the Permian Basin accounted for 39% of all invested capital on land acquisitions in the U.S. oil and gas industry last year. In comparison, the Marcellus Shale attracted 10%, and the Bakken 3%, respectively.

PERMIAN BASIN OIL PRODUCTION The Permian Basin is currently responsible for 60% of the Texas crude production and is home to 50% of the active rigs in the state. The Permian Basin is the second largest basin in the world and is home to 12 of the 17 top producing oil and gas companies in the state. The Drilling Productivity Report (DPR), a computer driven model that estimates recent and future oil and gas production in specific regions, shows massive increases in the production of oil from the Permian Basin. Charts showing current production have also shown the same upward trends that the DPR models have predicted. The massive increases in oil production from the region and expected growth suggest that demand for industrial and manufacturing space will continue to rise throughout the Midland-Odessa market.

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LOCAL ECONOMY

ODESSA, TEXAS

PERMIAN BASIN OIL PRODUCTION 60% of Texas crude production

16% of U.S. crude production

17% of Texas and U.S. gas production

50% of active rigs in Texas

25% of active rigs in the U.S.

Home to 12 of the 17 top producing oil and gas counties in the state.

Midland-Odessa is the logistics, distribution, and warehousing hub for West Texas. The area’s retail service sector is regionally based with but led by national-chain stores and restaurants.

LABOR STATISTICS

A well-educated workforce is essential in a competitive global environment and workers must be able to update and expand their knowledge as new technology and operational procedures continue to evolve. The Permian Basin has more than 220,000 professionals in the regional labor pool that have the educational expertise and technical aptitude to serve the industry. Midland County has added over 23,000 jobs since January 2010 (Texas Workforce Commission). Post-secondary and higher education resources are readily available within the Midland area to serve area residents and businesses. The West Texas “can-do” work ethic and attitude provides a favorable business climate for both existing and new businesses.

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LOCAL BUSINESSES ODESSA, TEXAS

Company Name Product/Service Company Name Product / Service

Anadarko Petroleum Oil & Gas Exploration & Production Hy-Bon Engineering *** Oil & Gas Services & Equipment

Anthem Oil & Gas, Inc. *** Oil & Gas Operation The Kent Companies *** Oil Distributor

Apache Corporation Oil & Gas Exploration & Production Key Energy Services Oil Field Services

Baker Hughes Companies Oil Field Service & Equipment Legacy Reserves, LP *** Oil & Gas Exploration & Production

Basic Energy Services Oil Field Service Nabors Well Services Oil & Gas Services & Equipment

BCCK Engineering *** Oil & Gas Services & Equipment Natural Gas Services Group *** Natural Gas Services & Equipment

Big D *** Oil & Gas Field Service Occidental Petroleum Ltd Oil & Gas Exploration & Production

Centurion Pipeline Pipeline Transportation Onyx Contractors, LP Construction

Chesapeake Energy Natural Gas Exploration & Production Parsley Energy Oil & Gas Exploration & Production

Chevron Oil & Gas Production Patterson Drilling UTI Oil Field Service

Concho Resources *** Oil & Gas Exploration & Production Pioneer Natural Resources Natural Gas Exploration & Production

Conoco Phillips Oil & Gas Exploration & Production Plains All-American Pipeline, LP Petroleum Transportation & Marketing

CSI Compressco LP Gas Compression Service Production Lift Companies Oil Field Service

Dawson Geophysical *** Oil Field Services Rockwater Energy *** Oil & Gas Services

DCP Midstream Natural Gas Processing Schlumberger Oilfield Services Oil & Gas Services

Devon Energy Oil & Gas Production Smith Industries *** Oil & Gas Field Supplies & Equipment

Diamondback Energy *** Oil & Gas Exploration & Production Susie's South Forty Confections, Inc. *** Manufacturer

Don-Nan Pump & Supply *** Oil Field Service Tenaris Pipe Distributor

Dura-Line Polyethylene Pipe Teraco Manufacturer

En-Link Midstream Oil Field Service Tucker Midstream Oil Field Service & Equipment

Endeavor Energy Resources, LP Oil & Gas Exploration & Production Wagner & Brown, Ltd *** Oil & Gas Exploration & Production

Energen Resources Corporation Oil & Gas Exploration & Production Warren Equipment Companies *** Equipment Manufacturing & Service

Enertia Software, Inc. *** Oil & Gas Software Weatherford International Oil Field Services

EOG Resources Oil & Gas Exploration & Production West Texas Gas, Inc. *** Natural Gas Services

Fasken Oil & Ranch *** Oil & Gas Exploration & Production Westex/WLP Holdings, LP *** Oil Field Services

Halliburton Energy Services Oil Field Service XTO Energy Oil & Gas Exploration & Production

*** Midland-Odessa Headquarters

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MARKET OVERVIEW ODESSA, TEXAS

VACANCY & RENTAL RATE TRENDS

Market research indicates current Industrial vacancy rates in the Midland-Odessa region have been decreasing since late 2016. Overall vacancy rates have dropped from 12% to 3% in the span of one year. Historic vacancy rates for the past 5 years have consistently remained between 9% and 12% until the shift in late 2016.

Despite large amounts of new construction over the past five years, the amount of available industrial space is lower now than it has been in any of the previous years in that same period.

Up from $6.50 per SF NNN on average in early 2013, current asking rental rates have increased approximately 75% to $11.37 per SF NNN. Decreasing inventory levels, coupled with increases in leasing absorption across the region suggests asking rental rates will almost certainly continue to climb.

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RECENT DEVELOPMENT ODESSA, TEXAS

NEW CONSTRUCTION vs DEMAND

Despite seeing below-average vacancy rates across all asset types and the continual

rise in base rental rates, the amount of new square footage under construction has

experienced very little change between 2016 and 2017. The majority of new

construction consists of build-to-suit projects for occupiers, with very little being

speculative development. Barring an economic shift or change in West Texas Crude

pricing and/or forecasts, the demand for industrial real estate will likely continue to

outpace supply over the next 12-24 months; causing vacancy rates to fall even

further.

The slight jump in the amount of total square footage currently under construction

between 2016 and 2017 indicates that the much of the speculative new

construction in the market was started late in 2016 in response to the shift in

demand. This indicates that the Midland-Odessa market is more reactionary than

preemptive, meaning that it is more likely to maintain the current low vacancy rates

and high rental rates in the next 24 months.

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PROPERTY OVERVIEW ODESSA, TEXAS

PROPERTY

Improvement Year Built SQ FT

Building A 1982 8,030

Building B 2002 6,000

Building C 1982 5,750

Building D 2015 11,880

IMPROVEMENTS (SF)

31,660 Total SF

+/- 27,660 SF Shop

+/- 4,000 SF Office

ACERAGE

4.0 acres

ELECTRICAL

480V 3 phase

BUILDING A

(10) Offices

(2) Breakrooms

Conference room

(4) Restrooms

(1) 3-ton Overhead Crane

Manual lift OH door

Evaporative cooling system

BUILDING B

(1) Office

(1) 3-ton OH crane

(2) Manual lift OH door

BUILDING C

(1) Office

(1) Breakroom

(1) Restroom

(1) 5-ton Overhead Crane

(2) Manual lift OH door

BUILDING D

(7) Offices

(2) Restrooms

(2) 20-ton Overhead Crane

(4) Electric oversize OH doors

(4) Test Bays 12’ x 12’ x 12’

(1) Wash Bay 12’ x 16’ x 12’

FENCING

6’ chain link with barb wire

(2) 12’ electric gates; (1) with key pad

(2) 3’ gates; (1) with combination lock

door handle

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PROPERTY PHOTOS ODESSA, TEXAS

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SURVEY ODESSA, TEXAS

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IABS

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IABS

Garrett Gibbons | Vice President ggibbons@jacksoncooksey.com +1 (972) 934-9757 12770 Merit Drive | Suite 760 | Dallas, Texas 75251

NO WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, IS MADE AS TO THE ACCURACY OF THE INFORMATION CONTAINED HEREIN AND SAME IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICES, RENTAL OR OTHER CONDITIONS.

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