Important Disclosures

Tudor, Pickering, Holt & Co. International, LLP Disclosures

 
Tudor, Pickering, Holt & Co. uses a Buy, Accumulate, Hold, Trim and Sell rating system.

Opinion Key:

Buy – The stock should be purchased aggressively at current prices. The stock has among the best combination of risk/reward and positive company specific catalysts within the sector. Stock is expected to trade higher on an absolute basis and be a top performer relative to peer stocks over the next 12 months.

Accumulate – The stock should be purchased consistently at current prices. The stock has above average risk/reward and is expected to outperform peer stocks over the next 12 months.

Hold – Do nothing with the stock at current prices. The stock has average risk/reward and is expected to perform in line with peer stocks over the next 12 months.

Trim – The stock should be sold consistently at current prices. The stock has below average risk/reward and is expected to under perform peer stocks over the next 12 months.

Sell – The stock should be sold aggressively at current prices. The stock's risk/reward is skewed to the downside with possible negative company specific catalysts or excessive valuation. The stock is expected to trade lower on an absolute basis and be among the worst performers relative to peer stocks over the next 12 months.

Investment Rating Distribution: (as of December 31, 2011)

Coverage Universe –

Tudor, Pickering, Holt & Co. has received in the past 12 months compensation for investment banking or other services from Armstrong Oil & Gas, Atinum Partners, Basic Energy Services, Breitburn Energy Partners, C&J Energy Services, Chesapeake Midstream Partners, CNOOC Ltd., Cobalt International, Complete Production, Discovery Offshore, Eagle Rock Energy Partners, Edge Oilfield Services LLC, El Paso Pipeline Partners, GMT Exploration, GMX Resources, KKR, Laredo Petroleum, Lone Pine Resources, Marquette Exploration, Monroe Gas Storage, Newfield Exploration, Oasis Petroleum Inc., Oil States International, Peregrine Midstream Partners, Plains All American, QRE GP LLC, Sandridge Energy, Statoil, Technip, Tesoro Corp, United Engines LLC, United Holdings LLC, Western Gas Holdings. We intend to seek compensation for investment banking services from the companies we follow in the next 3 months.

Investment Rating Distribution of Investment Banking Clients: (as of December 31, 2011)

Coverage Universe –

View All Tracked Companies

(Historical price and ratings information for tracked companies is updated quarterly. Most recent update is as of December 31, 2011.)

Price Target Methodology:

Price targets are developed using the stock's forward price-to-earnings ratio as a primary valuation metric. Target prices are typically 20-25X forward price-to-earnings for oil service companies, with validation of this range is driven by examination of EBITDA multiples and price-to book value metrics. For offshore drilling companies, price targets are developed using 10-15X multiples of upside earnings. These are calculated using our assumptions of normalized day rates and utilization. Validation of our target is done by examining net asset values, and private market transactions. There is a risk that the stock will never reach the price target. These risks include market conditions and unforeseen events that may affect the company's business.

For IPPs, price targets are developed using a discounted cash flow model. The net present value of a company’s projected cash flow is added to the present value of a terminal valuation to determine our target price. Terminal values are calculated on an asset by asset basis using assumptions derived from our market equilibrium model. The market equilibrium model assumes a balanced market from a supply/demand perspective. The model calculates, and then capitalizes each asset type’s cash flow under those conditions. Validation of our target is done by examining net asset values, private market transactions and EBITDA multiples. There is a risk that the stock will never reach the price target. These risks include market conditions and unforeseen events that may affect the company's business.

Compensation Policy and Disclosure of Investment Banking Revenue

Analysts’ compensation is not based on investment banking revenue and the analysts are not compensated by the subject companies. In the next three months we intend to seek compensation for investment banking services from the companies mentioned within its research reports. In the past 12 months, Tudor, Pickering, Holt & Co. Securities, Inc. has received investment banking or other revenue from Arena Resources Inc., Berry Petroleum, Boardwalk Pipeline Partners, Brigham Exploration, Cobalt International, Concho Resources, Inc., Constellation Energy, El Paso Pipeline Partners, Enerplus Resources (UAS) Corporation, Gastar Exploration Ltd., Global Geophysical, Goodrich Petroleum, Hercules Offshore, Legacy Reserves, Magellan GP, LLC, Mariner Energy, Newfield Exploration, Nustar Energy, Oasis Petroleum Inc., Petrohawk Energy Corp., Plains Exploration, Questar Corporation, Range Resources Corp., Regency Energy Partners, REX Energy Corp., Rosetta Resources, Sandridge, Stallion Oilfield Holdings, Stone Energy, Superior Well Services, Targa Resource Partners LP, Western Gas Holdings, Williams Partners GP LLC.

Business Continuity Plan

Executive Summary

As required by securities industry regulations, Tudor, Pickering, Holt & Co. wants to make you aware that we have developed a Business Continuity Plan on how we will respond to events that disrupt our business. Since the timing and impact of disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur.

Our Business Continuity Plan – Significant business disruptions can vary from disrupting only our firm to the region in which we are located. Our Plan addresses various disruptions and is intended to mitigate reasonable risk so as to permit the continuation of key business operations. Our Business Continuity Plan addresses data back up and recovery, mission critical systems, safeguarding our employees and property, financial and operational assessment, alternative communications with customers, employees and regulators, alternate physical location of employees, critical supplier and bank, and counterparty impact, regulatory reporting and assuring our customers prompt access to their funds and securities and allowing our customers to transact business.

Tudor, Pickering, Holt & Co. maintains redundant offsite archival storage facilities in a geographically separate area. Our clearing firm, the Broadcort Correspondent Clearing Division of Merrill Lynch, Pierce, Fenner & Smith Incorporated, also backs up certain of our records. We have designated an alternate site to conduct key business operations until we are able to return to our offices. The firm's goal is to recover its critical operations within minutes or hours after the disruption. We will assure our customers prompt access to their funds and securities.

Contacting Us – In the event of a business disruption Tudor, Pickering, Holt & Co. will provide information to its employees and clients via call forwarding, e-mail and other telecommunication services. Our address is:

Heritage Plaza
1111 Bagby, Suite 5100
Houston, TX 77002
713.333.2960 

If you are unable to contact us through those means you may contact our clearing firm, the Broadcort Correspondent Clearing Division of Merrill Lynch, Pierce, Fenner & Smith Incorporated, for trade related information. Their contact information is as follows:

Broadcort Correspondent Clearing Division of Merrill Lynch, Pierce, Fenner & Smith Incorporated
101 Hudson Street
Jersey City, NJ 07302
201-557-0700

The plan is subject to modification, an updated summary will be promptly posted on our website, www.tudorpickering.com. Customers may alternatively obtain updated summaries by requesting a written copy by mail.

SEC Rule 606 Report Disclosure of Order Routing Information:
For Quarter Ending December 2011

Tudor, Pickering, Holt & Co. has prepared this report pursuant to a U.S. Securities and Exchange Commission rule requiring all brokerage firms to make publicly available quarterly reports on their order routing practices. The report provides information on the routing of "non-directed orders" - any order that the customer has not specifically instructed to be routed to a particular venue for execution. For these non-directed orders, Tudor, Pickering, Holt & Co. has selected the execution venue on behalf of its customers.

The report is divided into four sections: one for securities listed on the New York Stock exchange, one for securities listed on The Nasdaq Stock Market, one for securities listed on the American Stock Exchange or regional exchanges, and one for exchange-listed options. For each section, this report identifies the venues most often selected by Tudor, Pickering, Holt & Co., sets forth the percentage of various types of orders routed to the venues, and discusses the material aspects of Tudor, Pickering, Holt & Co.'s relationship with the venues.

Privacy Policy

Tudor, Pickering, Holt & Co. Securities, Inc. considers your privacy our utmost concern. In order to provide you with individualized service, we collect certain nonpublic personal information about you from information you provide on applications or other forms (such as your address and social security number), and information about your account transactions with us (such as purchases, sales and account balances). We may also collect such information through your account inquiries by mail, email, or telephone.

We do not disclose any nonpublic personal information about you to anyone, except as permitted by law. Specifically, so that we may continue to offer you Tudor, Pickering, Holt & Co. Securities, Inc. products and services that best meet your investing needs, and to effect transactions that you request or authorize, we may disclose the information we collect, as described above, to companies that perform administrative or marketing services on our behalf, such as transfer agents, or printers and mailers that assist us in the distribution of investor materials. These companies will use this information only for the services for which we hired them, and are not permitted to use or share this information for any other purpose.

If you decide at any point either to close your accounts(s) or to become an inactive customer, we will continue to adhere to the privacy policies and practices described in this notice.

With regard to our internal security procedures, we restrict access to your personal and account information to those employees who need to know that information to service your account. We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information.

713.333.2960
info@tudorpickering.com

Other Disclosures

Trade Name
Tudor, Pickering, Holt & Co. is the global brand name for Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and its non-US affiliates worldwide.

Legal Entities Disclosures
U.S.: TPHCSI is a member of FINRA and SIPC. U.K.: Tudor, Pickering, Holt & Co. International, LLP is authorised and regulated by the Financial Services Authority. Registered in England & Wales No. OC349535. Registered office Pellipar House, 1st Floor, 9 Cloak Lane, London EC4R 2RU.

Canada
The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein and any representation to the contrary is an offense.

SIPC Information
Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) is a member of the Securities Investor Protection Corporation (SIPC). Please be advised that you may obtain information about SIPC, including the SIPC brochure, by contacting SIPC at www.sipc.org or 202-371-8300.

BrokerCheck
FINRA Rule 2267 requires that member firms provide clients with the FINRA BrokerCheck Hotline Number (800-289-9999), FINRA web site address (www.finra.org) and a notification that a brochure describing BrokerCheck is available from FINRA by contacting FINRA through their web site.