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CONFIDENTIAL
PROJECT BILTMORE
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Presentation to the Special Comittee of the BOD /
May 27, 2003
[GRAPHIC OMITTED]
Table of Contents
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1 Transaction Overview
2 Overview of Grape
3 Valuation Analysis
4 Appendix
A Valuation Analysis - Supporting Data
B Termination Fee Analysis
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD /
May 27, 2003
2
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CONFIDENTIAL MATERIAL FOR THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
THE FOLLOWING PAGES CONTAIN MATERIAL PROVIDED TO THE SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS OF GRAPE (THE "COMPANY") BY CIBC WORLD MARKETS CORP. ("CIBC
WORLD MARKETS") IN CONNECTION WITH THE PROPOSED MANAGEMENT BUYOUT OF THE
COMPANY. THE ACCOMPANYING MATERIAL WAS COMPILED AND PREPARED ON A CONFIDENTIAL
BASIS SOLELY FOR THE USE OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF
THE COMPANY. THE INFORMATION CONTAINED IN THIS MATERIAL WAS OBTAINED FROM THE
COMPANY AND OTHER SOURCES. ANY ESTIMATES AND PROJECTIONS FOR THE COMPANY
CONTAINED HEREIN HAVE BEEN PREPARED BY THE MANAGEMENT OF THE COMPANY OR ARE
BASED ON SUCH ESTIMATES AND PROJECTIONS, AND INVOLVE NUMEROUS AND SIGNIFICANT
SUBJECTIVE DETERMINATIONS, WHICH MAY OR MAY NOT BE CORRECT. NO REPRESENTATION OR
WARRANTY, EXPRESSED OR IMPLIED, IS MADE AS TO THE ACCURACY OR COMPLETENESS OF
SUCH INFORMATION AND NOTHING CONTAINED HEREIN IS, OR SHALL BE RELIED UPON AS, A
REPRESENTATION, WHETHER AS TO THE PAST OR THE FUTURE. THIS MATERIAL WAS NOT
PREPARED FOR USE BY READERS NOT AS FAMILIAR WITH THE BUSINESS AND AFFAIRS OF THE
COMPANY AS THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS AND, ACCORDINGLY,
NEITHER THE COMPANY, THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF THE
COMPANY NOR CIBC WORLD MARKETS NOR THEIR RESPECTIVE LEGAL OR FINANCIAL ADVISORS
OR ACCOUNTANTS TAKE ANY RESPONSIBILITY FOR THE ACCOMPANYING MATERIAL WHEN USED
BY PERSONS OTHER THAN THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF THE
COMPANY.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD /
May 27, 2003
3
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1 Transaction Overview
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD /
May 27, 2003
4
Transaction Overview
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Key Terms
Terms Comments
Transaction > Cash merger whereby all shares not owned by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
the Chairman and CEO of Grape, will be acquired by an entity that he controls
Structure > Reverse triangular merger whereby Alexi Corporation ("Merger Sub"), a wholly-owned
subsidiary of Alexi Holdings Limited ("Parent") is merged with and into Company
Merger Consideration > $6.25 per share in cash
Options / Warrants > All unvested options and warrants are accelerated
> In-the-money options and warrants receive the value equal to the value of Merger
Consideration less the exercise price
Representations and Warranties > Customary for arms length merger transaction
No Solicitation > At any time prior to the mailing of the proxy statement, if once the Board has
determined that an Acquisition Proposal represents a Significant Offer
(unsolicited bona fide written proposal which the Board, in its reasonable
judgment concludes is more favorable from a financial point of view and is
reasonably capable of being consummated)
o Notify Parent within 24 hours from an Acquisition Proposal or inquiry of
interest is received
o Promptly provide Parent a written notice of identity of offeror and intention
to furnish offeror with nonpublic information
o Enter into a confidentiality agreement attached to the Merger Agreement
("Agreement") as Exhibit B
o Promptly provide Parent with information to be furnished to offeror, to the
extent not yet provided to Parent
o Furnish non-public information to the third party
o Enter into negotiations
> Subject to certain restrictions, Board has a fiduciary out for a Superior Offer
(in Board's judgment concludes, after a receipt of opinion from a nationally
recognized investment bank, offer is more favorable from a financial point of view
and is reasonably capable of being consummated; provided, however, such offer is
not deemed to be a Superior Offer if any financing required is not committed or is
not reasonably capable of being obtained)
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 5
Transaction Overview
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Key Terms (cont.)
Terms Comments
Shareholders' Meeting > Company is not required to hold a Shareholders' Meeting unless Parent has
confirmed availability of financing
Closing Conditions > Stockholder approval
> No government injunction
> Accuracy of reps and warranties
> Receipt of all necessary third party consents
> No Company Material Adverse Effect
> Absence of pending or threatened proceedings that may have material adverse effect
on the Merger or either party ("Proceeding")
> Officer's certificate
> Dissenting shares to not exceed 5% of outstanding shares of Common Stock
> Availability of Parent's financing
> All fees and expenses of the Special Committee have been paid in full
Termination > By mutual written consent
> Failure to close by June 30, 2004
> By Parent if there is a pending or threatened Proceeding
> By either party if requisite shareholder approval was not obtained at the
Shareholders' Meeting
> By Parent if a Triggering Event (defined later) has occurred
> By either party upon breach of reps and warranties of the other party and such
breach is not cured within a cure period by the breaching party
> By Parent if there has been a Company Material Adverse Effect or one or a
combination of events that could be a Company Material Adverse Effect
> By Parent if the satisfaction of any Company closing condition is or becomes
impractical and Parent has not waived such condition
> By Company if, prior to the Shareholders' Meeting: (i) Company's Board receives a
Superior Offer; (ii) Board, after consultation with its outside advisors,
terminates the Merger Agreement as not to violate its fiduciary duties;
(iii) Company has complied in all material respects with No Solicitation
provisions; (iv) Company pays the Termination Fee and Parent Expenses (defined
later); and (v) Board concurrently approves and Company concurrently enters
into a definitive agreement; provided Company provides a three (3) business notice
to Parent
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 6
Transaction Overview
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Key Terms (cont.)
Terms Comments
Expenses > Each shall bear its own
> Company shall pay Parent for all fees and expenses incurred in connection with the
Merger ("Parent Expenses"); provided, however, such payment shall not exceed
$500,000, exclusive of litigation expenses, if terminated by Parent pursuant
to the following ("Expense Conditions"):
o Failure to close by June 30, 2004
o Pending or threatened Proceeding
o Requisite shareholder approval was not obtained at the Shareholders' Meeting
o Triggering Event
o Breach of reps and warranties by Company
o Company Material Adverse Effect or one or a combination of events that could
be a Company Material Adverse Effect
Termination Fee > Company shall pay Parent:
o $1.05 million if terminated pursuant to (ii)
o $1.75 million if (a) terminated by either party pursuant to (i) or (ii) and
at or prior to termination, Company has received an Acquisition Proposal
which is then consummated within twelve (12) months from termination,
(b) terminated by Parent pursuant to a Triggering Event or (c) terminated by
Company pursuant to (iv)
o $1.00 million if (a) Company receives a Significant Proposal within 30 days
from the date of Agreement then terminates pursuant to (iv) before the
earlier of (y) 45 days from the date of Agreement or (z) the date of mailing
of proxy
(i) Merger not consummated by June 30, 2004
(ii) Requisite stockholder approval has not been obtained
(iii) Triggering Event
- Board approval, endorsement or recommendation of any Acquisition
Proposal
- Failure of Company to comply with Company Shareholders' Meeting
covenant
- Board withholds or withdraws or modifies its recommendation
- Board fails to include its recommendation in proxy
- Board fails to reject a tender within ten (10) business days
- Company fails to issue a press release in opposition to a
publicly announced Acquisition Proposal within ten (10) business
days
- Breach by Company or any its Representative of the No
Solicitation covenant
(iv) Superior Proposal out
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 7
Transaction Overview
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Offer Summary
(Dollars in thousands, except per share amount)
Current Offer
5/23/2003 Price
Price Per Share $4.15 $6.25
% Change / Implied Premium
Unaffected (a) $3.70 12% 69%
1 Day $4.15 0% 51%
1 Week $3.76 10% 66%
1 Month $3.91 6% 60%
FD Shares Outstanding (b) 5,180.9 5,189.1
Equity Value $21,500.7 $32,431.8
Plus: Debt (c) 67,709.9 67,709.9
Plus: Working Capital Deficit (c) 6,791.6 6,791.6
Less: Cash (c) (9,369.2) (9,369.2)
-------------- --------------
Aggregate Value (AV) $86,633.0 $97,564.0
-------------- --------------
Valuation Multiples
AV / 2002A EBITDA 25.0x 28.1x
AV / 2003E EBITDA 6.0 6.7
AV / 2004E EBITDA 5.4 6.0
P / 2003E Cash Flow 26.2x 39.5x
P / 2004E Cash Flow 11.1 16.7
P / 2003E EPS (d) na na
P / 2004E EPS (d) na na
---------------------
(a) Grape closing stock price on May 19, 2003 which is one day prior to the
announcement of a possible management buyout.
(b) Based on 4.95mm shares of Grape common stock, 230,000 warrants with an
exercise price of $0.01, and 200,000 options with an exercise price of
$6.00 based on treasury method.
(c) Per March 31, 2003 form 10-Q.
(d) Not applicable due to estimated losses in both 2003 and 2004. 2 Overview of
Grape
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 8
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Overview of Grape
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 9
Overview of Grape
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Company Overview
> Grape is an independent integrated energy company that conducts
operations through its two divisions: Integrated and International Operations
> Integrated Operations consists of the Company's heavy oil ▇▇▇▇▇ in
California and the Santa ▇▇▇▇▇ asphalt refinery
o 28.5 MMBOE, daily production averaging 3,300 BOE (gross) per day
from 1,200 ▇▇▇▇▇ for the year ended December 31, 2002
o 10,000 bpd asphalt refinery
> International Operations include interests in five (5) coalbed methane
(CBM) exploration and production sharing contracts in China
o Company currently in default under agreements
> The Company's oil and gas production, exploration and development
activities are concentrated in California where the Company also owns and
operates an asphalt refinery
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Source: Company public filings and management.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 10
Overview of Grape
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3 Year Price / Volume Graph
Since its high of $17.14 on September 20, 2000, Grape's stock price has declined
approximately 76% to close at $4.15 on May 23, 2003
3 Year Price / Volume Graph
[GRAPHIC OMITTED]
Graph of 3 year changes in price and volume of Greka stock.
Date Event
------------------------ ----------------------------------------------------------------------------------------------------
1) August 2002 Completed sale of non core assets in Canada
2) August 2002 Settled lawsuit with CAPCO resources
3) November 2001 Declared a payment of a 5% stock dividend and completed spot secondary public offering of 542,785
shares at $13.10 per share
4) February 2001 Increased credit facility with existing bank up to $46 million
5) March 2001 Secured financing with new bank up to $75 million, closed on a revolving credit line of $16 million
6) July 2001 Announced share repurchase program to buy back up to 10% of outstanding common stock
7) August 2001 Completed Colombian transaction with Greka receiving cash and assets
8) October 2001 Exploration success at Potash Field with drilling of H&D#1 well, commenced production at over 6 Mmcfed
9) May 2002 Sold interest in Potash Field
10) June 2002 Acquired oil & gas properties from Vintage Petroleum
11) October 2002 Acquired oil & gas properties and related facilities in the ▇▇▇▇▇▇ Island Field
12) October 2002 Debt restructuring through the placement of $12.5 million in secured debt
13) October 2002 Amendment to production sharing contract in the Company's exploration prospect in Jiangxi, China
14) March 2003 Placed $20 million with an institutional investor through a two-year secured credit facility
15) May 2003 Announced a possible management buyout by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman and CEO of Grape
---------------------
Source: Factset, Company Filings and Management.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 11
Overview of Grape
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Overview of California Properties
> U.S. reserves of 28,542 MBOE representing 100% of total company proved
reserves as of 12/31/2002
> 12/31/2002 production of 1,083 MBOE
> Majority of the $7.8 million 2003 capital budget will be allocated to
facilitate organic production rom the California properties. Capital
expenditure projects identified for 2003, namely workovers, redrills,
recompletions, side-tracks, and various facility enhancements, are
scheduled throughout the year.
> Central Coast Fields
o The Company owns seven fields in the Central Coast area of California
(38% of total proved reserves)
o Fields provide equity crude oil for the Company's asphalt refinery
o 179 active ▇▇▇▇▇ producing 2,364 BOEPD as of 12/31/2002
> North Belridge Field
o 42 ▇▇▇▇▇ on three leases covering 270 contiguous acres (8% of total
proved reserves)
o Production of 300 BODPD
> ▇▇▇▇▇▇ Field
o 100% working interest in 16 active ▇▇▇▇▇ producing approximately 371
BOEPD
> Richfield East Dome Unit
o Mature waterflood producing approximately 615 BOEPD from 94 active
▇▇▇▇▇
---------------------
Source: Company public filings and management.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 12
Overview of Grape
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Asphalt Refinery Overview
> Grape owns an asphalt refinery in Santa ▇▇▇▇▇▇▇ County, California. The
refinery is a fully self-contained plant with steam generation, mechanical
shops, control rooms, office, laboratory, emulsion plant and related (GRAPHIC OMITTED)
facilities.
(Graphic of Asphalt Refinery Omitted)
> The refinery has a rated capacity of 10,000 bpd. However, an independent
appraisal of the refinery was conducted in 2001 suggesting that the
sustainable throughput capacity is approximately 7,500 bpd.
> Refinery storage capacity
o Asphalt 400,000 Bbls
o Crude 135,000 Bbls
o Gas Oil 25,000 Bbls
o Naphtha 20,000 Bbls
> As of 12/31/2002, average throughput was approximately 3,000 bpd, a 24%
increase over 2001 levels.
> As of 12/31/2002, the Company supplied approximately 90% of the asphalt
feedstock with equity oil produced from nearby oil and gas producing
fields.
> The facilities are designed to produce high quality asphalt (65%), which is
primarily used for paving roads and repairs. The refinery also produces
naphtha (5%), which is sold to complex refineries for further processing
and distillates (gas oil) (30%).
> In February 2003, the Company performed a maintenance turnaround, and the
plant resumed operation in March 2003.
---------------------
Source: Company public filings and management.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 13
Overview of Grape
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Other Assets Overview
> Facilities & Equipment. The Company maintains a consolidated infrastructure which includes:
o 2 gas processing plants
o 3 workover rigs
o 9 vacuum trucks
o 2 crude trucks
o Extensive pipelines
> Real Estate. The Company owns real estate under which some of its oil and
gas properties in California reside.
o As of 12/31/2002, the Company owned approximately 3,300 acres in Santa
▇▇▇▇▇▇▇ County, California
o The Company has used a portion of its real estate holdings for leased
agricultural purposes
> International Operations/Assets. The Company owns interests in CBM
properties and production sharing contracts in China.
o As of 12/31/2002, no reserves have been booked in the Company's
financial reports.
---------------------
Source: Company public filings and management.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 14
Overview of Grape
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Issues Facing Company
> Capital Structure
o Company currently has $58.3 million of net debt which represents 10.4x
LTM EBITDA and 4.0x 2003E EBITDA
> Interest Expense
o Company is currently unable to finance itself in "bank" market and is
reliant on financing from "alternative lenders". Most recent
financings have all-in interest rate of approximately 20%
> Cash Flow
o Company is spending almost all of its EBITDA on interest expense
leaving no cash flow to fund capital expenditures
> Underutilized Refinery
o The Company's asphalt refinery is currently operating at approximately
30% of stated capacity thus affecting the profitability of the
operations. Further the Company does not have the capital or liquidity
to either increase production from its existing properties or acquire
additional oil from third parties to run refinery at more efficient
capacity
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 15
Overview of Grape
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Volume Distribution Analysis
Volume Weighted
Average Price:
3 Month: $4.13
6 Month: $4.14
1 Year: $4.81
3 Year: $10.13
3 Month (a) 6 Month (b)
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
1 Year (c) 3 Year (d)
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
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(a) Three-month histogram represents 505,630 cumulative shares traded,
representing 11% of the public float of 4,657,727 shares outstanding, and
10% of the total shares outstanding of 4,951,451. Public float is defined
as total shares less shares held by insiders.
(b) Six-month histogram represents 988,289 cumulative shares traded,
representing 21% of the public float of 4,657,727 shares outstanding, and
20% of the total shares outstanding of 4,951,451.
(c) One-year histogram represents 3,637,626 cumulative shares traded,
representing 78% of the public float of 4,657,727 shares outstanding, and
73% of the total shares outstanding of 4,951,451.
(d) Three-year histogram represents 18,823,061 cumulative shares traded,
representing 404% of the public float of 4,657,727 shares outstanding, and
380% of the total shares outstanding of 4,951,451.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 16
Overview of Grape
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Shareholder Profile Analysis
Cumulative
Institutional Holders Shares Percent Percent
---------------------------------------------- ---------------------------------------------------
Strong Capital Management 511,388 9.9% 9.9%
Wynnefield Capital Management 346,300 6.7% 16.6%
-----------------------------------------------------------------------------------------------------
Vanguard Group 160,016 3.1% 19.6%
AXA Financial 78,300 1.5% 21.2%
Bridgeway Capital Management 33,600 0.6% 21.8%
Security Management Company 16,300 0.3% 22.1%
Barclays Bank 6,575 0.1% 22.2%
▇▇▇▇ ▇▇▇▇▇ 2,599 0.1% 22.3%
CIBC WM 997 0.0% 22.3%
Los Angeles Capital Management 405 0.0% 22.3%
Other 74,234 1.4% 23.8%
---------------------------------------------------
Total Institutional Ownership 1,230,714 23.8% 23.8%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Insiders Shares Percent
------------- -----------------------------------
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Chairman, CEO, Pres) 262,500 5.1%
▇▇. ▇▇▇ ▇▇▇▇▇▇▇ (Dir) 23,499 0.5%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Dir) 5,250 0.1%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (VP Op) 1,900 0.0%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (VP Bus Dev) 1,575 0.0%
-----------------------------------
Total Insiders 294,724 5.7%
------------------------------------------------------------------------------------------ ---------------------------------------
Distribution Summary Distribution Summary
------------------------------------------------------------------------------------------ ---------------------------------------
Shares Percent
------------ -----------
[Graphic Omitted]
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Chairman, CEO, Pres) 262,500 5.1%
Other Insiders 32,224 0.6% ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Strong Capital Management 511,388 9.9% (Chairman, CEO, Pres) 5%
Wynnefield Capital Management 346,300 6.7% Other Insiders 1%
Other Institutional Shareholders 373,026 7.2% Strong Capital Management 10%
Warrant Holders (a) 229,446 4.4% Wynnefield Capital
Other Shareholders / Retail 3,426,013 66.1% Management 7%
------------- ----------- Other Institutional
Total Shares Outstanding (b) 5,180,897 100.0% Shareholders 7%
Warrant Holders (a) 4%
Other Shareholders/Retail 66%
----------------------------------------------------------------------------------------- ----------------------------------------
---------------------
Source: Grape 10K, dated 12/31/02.
(a) Based on treasury method using closing price of $4.15 on May 23, 2003;
230,000 warrants with an exerciseable price of $0.01.
(b) Based on fully diluted shares outstanding including 4.95 million shares of
common stock and 230,000 warrants. Treausury method applied to warrants.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 17
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3 Valuation Analysis
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 18
Valuation Analysis
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Overview
> Valuation performed using the following methodologies:
o E&P Comparable Company Analysis - Valuation based on current trading
multiples of publicly traded peers.
o R&M Comparable Company Analysis - Valuation based on current trading
multiples of publicly traded peers.
o Precedent Asset Transactions - Values the corporation or selected
assets based on recent corporate or asset transactions.
o Net Asset Value. Value of Company based on an estimated reserve value,
estimated market value of other assets and the Company's current
capital structure
o Discounted Cash Flow. Utilizes Company production estimates to value
unlevered cash flows, utilizing various discount rates to reflect
required returns.
o Premiums Paid Analysis. Values the corporation based on premiums paid
in recent "going private" or "squeezeout" transactions.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 19
Valuation Analysis
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Summary Historical and Projected Financials
(Dollars in millions, except per share amount)
Actual Projected (a)
-------------------------------------------- ---------------------------------------------
Fiscal Year End 12/31 2000 2001 2002 LTM (b) 2003 2004 2005 2006
-------------------------------------------- ---------------------------------------------
Sales $49.1 $40.8 $28.9 $32.3 $42.6 $50.1 $50.3 $53.5
Cost of Goods Sold 25.2 24.8 16.3 17.3 20.2 25.2 25.0 26.6
-------------------------------------------- ---------------------------------------------
Gross Profit 23.9 16.0 12.7 15.0 22.3 24.9 25.3 26.9
SG&A 7.2 8.3 9.2 9.4 7.8 8.8 8.8 9.0
Other Operating Expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-------------------------------------------- ---------------------------------------------
EBITDA 16.7 7.7 3.5 5.6 14.5 16.1 16.5 17.9
Depreciation 3.6 5.6 3.2 3.1 6.6 9.0 8.8 9.1
-------------------------------------------- ---------------------------------------------
EBIT 13.1 2.1 0.2 2.5 7.9 7.1 7.7 8.8
Interest Expense (Income), net 4.5 4.2 9.4 11.8 13.7 14.2 16.3 18.7
Other Non-Operating Expense 0.0 5.5 1.2 1.2 0.0 0.0 0.0 0.0
-------------------------------------------- ---------------------------------------------
Pre-Tax Income 8.5 (7.6) (10.3) (10.4) (5.8) (7.1) (8.6) (9.9)
Provision for Taxes 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-------------------------------------------- ---------------------------------------------
Net Income 8.2 (7.6) (10.4) (10.4) (5.8) (7.1) (8.6) (9.9)
Number of Shares Outstanding 4.8 4.6 4.8 5.2 5.2 5.2 5.2 5.2
Fully Diluted EPS $1.72 ($1.67) ($2.18) ($2.01) ($1.11) ($1.37) ($1.66) ($1.90)
Key Balance Sheet Items
Cash $4.8 $0.4 $1.4 $9.4 $1.0 $1.0 $1.0 $1.0
Net Working Capital (excludes cash) 1.1 (16.8) (3.2) (6.8) (2.3) (3.7) (3.5) (3.9)
Total Debt 36.8 43.1 57.3 67.7 68.4 77.1 89.0 101.4
Shareholders' Equity 40.2 33.2 26.1 23.9 20.3 13.2 4.6 (5.2)
Credit Statistics
Debt / EBITDA 2.2x 5.6x 16.5x 12.0x 4.7x 4.8x 5.4x 5.7x
EBITDA / Interest Expense 3.7 1.9 0.4 0.5 1.1 1.1 1.0 1.0
---------------------
(a) Modeled using Company estimated production, utilizing CIBC World Markets
price deck.
(b) LTM ending March 31, 2003.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 20
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Summary Valuation - Implied Share Price
[GRAPHIC OMITTED]
Bar graph illustrating price range valuation based on 6 variable comparisons.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 21
Valuation Analysis
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Comparable Company Analysis- E&P
(Dollars in thousands, except per share amount)
Implied Range
-----------------------------------------------
Low Mid High
------------------------------------------------------------------------------------------
Comparable Company Trading Analysis (a) EBITDA 2003E (a) $ 14,537
Comparable Company Multiple 3.6x 4.0x 4.4x
------------ ------------- ------------
Implied Aggregate Value $ 51,713 $ 58,121 $ 64,529
Less: net debt (b) (58,341) (58,341) (58,341)
Less: working capital deficit (b) (6,792) (6,792) (6,792)
------------ ------------- ------------
Implied Equity Value $(13,417) $ (7,008) $ (600)
-----------------------------------------------
Equity Value per Share $ (2.59) $ (1.35) $ (0.12)
-----------------------------------------------
------------------------------------------------------------------------------------------
(b) EBITDA 2004E (a) $ 16,148
Comparable Company Multiple 4.3x 4.5x 4.7x
------------ ------------- ------------
Implied Aggregate Value $ 69,906 $ 72,852 $ 75,798
Less: net debt (b) (58,341) (58,341) (58,341)
Less: working capital deficit (b) (6,792) (6,792) (6,792)
------------ ------------- ------------
Implied Equity Value $ 4,774 $ 7,720 $ 10,666
-----------------------------------------------
Equity Value per Share $ 0.92 $ 1.49 $ 2.06
-----------------------------------------------
------------------------------------------------------------------------------------------
(c) Cash Flow 2003E (a) $ 883
Comparable company multiple 2.4x 2.8x 6.9x
------------ ------------- ------------
Implied Equity Value $ 2,087 $ 2,446 $ 6,060
-----------------------------------------------
Equity Value per Share $ 0.40 $ 0.47 $ 1.17
-----------------------------------------------
------------------------------------------------------------------------------------------
(d) Cash Flow 2004E (a) $ 1,943
Comparable company multiple 2.7x 3.4x 6.9x
------------ ------------- ------------
Implied Equity Value $ 5,159 $ 6,524 $ 13,340
-----------------------------------------------
Equity Value per Share $ 1.00 $ 1.26 $ 2.57
-----------------------------------------------
------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Company Aggregate Value Average $ 64,783 $ 67,552 $ 72,498
----------------------------------------------------------------------------------------------------------------------------------
Company Equity Value Average $ (349) $ 2,420 $ 7,367
Shares Outstanding 5,181 5,181 5,181
Equity Value per Share $ (0.07) $ 0.47 $ 1.42
----------------------------------------------------------------------------------------------------------------------------------
---------------------
Note: Multiple range represents the low to high multiples of the E&P comparable
companies found in Appendix A; average represents simple averages and trimmed
average was not used due to insufficient data set.
(a) Modeled using Company estimated production, utilizing CIBC World Markets price deck.
(b) As of March 31st, 2003, per 1Q 2003 10-Q.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 22
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Comparable Company Analysis - R&M
(Dollars in millions, except per share amount)
Implied Range
-----------------------------------------------
Low Mid High
-----------------------------------------------------------------------------------------
Comparable Company Trading Analysis (a) EBITDA 2003E (a) $ 14,537
Comparable Company Multiple 3.3x 4.8x 7.6x
------------ ------------ ------------
Implied Aggregate Value $ 48,194 $ 70,181 $ 110,377
Less: net debt (b) (58,341) (58,341) (58,341)
Less: working capital deficit (b) (6,792) (6,792) (6,792)
------------ ------------ ------------
Implied Equity Value $(16,939) $ 5,048 $ 45,244
----------------------------------------------
Equity Value per Share $ (3.27) $ 0.97 $ 8.73
----------------------------------------------
-----------------------------------------------------------------------------------------
(b) EBITDA 2004E (a) $ 16,148
Comparable Company Multiple 3.2x 4.5x 6.7x
------------ ------------ ------------
Implied Aggregate Value $ 51,259 $ 72,037 $ 107,432
Less: net debt (b) (58,341) (58,341) (58,341)
Less: working capital deficit (b) (6,792) (6,792) (6,792)
------------ ------------ ------------
Implied Equity Value $(13,874) $ 6,904 $ 42,299
----------------------------------------------
Equity Value per Share $ (2.68) $ 1.33 $ 8.16
----------------------------------------------
-----------------------------------------------------------------------------------------
(c) Cash Flow 2003E (a) $ 883
Comparable company multiple 0.9x 2.4x 3.6x
------------ ------------ ------------
Implied Equity Value $ 834 $ 2,102 $ 3,151
----------------------------------------------
Equity Value per Share $ 0.16 $ 0.41 $ 0.61
----------------------------------------------
-----------------------------------------------------------------------------------------
(d) Cash Flow 2004E (a) $ 1,943
Comparable company multiple 0.9x 2.3x 3.4x
------------ ------------ ------------
Implied Equity Value $ 1,666 $ 4,503 $ 6,528
----------------------------------------------
Equity Value per Share $ 0.32 $ 0.87 $ 1.26
----------------------------------------------
-----------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Company Aggregate Value Average $ 58,055 $ 69,772 $ 89,438
---------------------------------------------------------------------------------------------------------------------------------
Company Equity Value Average $ (7,078) $ 4,639 $ 24,305
Shares Outstanding 5,181 5,181 5,181
Equity Value per Share $ (1.37) $ 0.90 $ 4.69
---------------------------------------------------------------------------------------------------------------------------------
---------------------
Note: Multiple range represents the low to high multiples of the R&M comparable
companies found in Appendix A; average represents simple averages and trimmed
average was not used due to insufficient data set.
(a) Modeled using Company estimated production, utilizing CIBC World Markets price deck.
(b) As of March 31st, 2003, per1Q 2003 10-Q.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 23
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Precedent Asset Transactions
(Dollars in thousands, except per share amount)
Implied Range
----------------------------------------------
Low Mid High
------------- ------------- -------------
--------------------------------------------------------------------------------------------
E&P Precedent Asset Transactions (a) Proved Reserves (MBOE) (a) 28,541
Transaction Value / BOE $ 1.08 $ 2.24 $ 3.17
------------- ------------- -------------
Implied Reserve Value $ 30,766 $ 63,979 $ 90,465
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
R&M Precedent Asset Transactions (b) Throughput Capacity (MBbls/d) (b) 10.0
Transaction Value / Throughput Cap. $ 1,341 $ 1,801 $ 2,640
------------- ------------- -------------
Implied Refinery Value $ 13,410 $ 18,010 $ 26,400
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Company Aggregate Value $ 44,176 $ 81,989 $ 116,865
Less: Net Debt (c) (58,341) (58,341) (58,341)
Less: Working Capital Deficit (c) (6,792) (6,792) (6,792)
------------- ------------- -------------
Company Equity Value $ (20,956) $ 16,856 $ 51,732
Shares Outstanding 5,181 5,181 5,181
Equity Value per Share $ (4.04) $ 3.25 $ 9.99
--------------------------------------------------------------------------------------------
---------------------
Note: Multiple range represents the trimmed low to high multiples, excluding the
absolute high and the absolute low.
(a) Per 12/31/2002 ▇▇▇▇▇ ▇▇▇▇▇ and Netherland ▇▇▇▇▇▇ reserve report ("Reserve
Reports").
(b) Rated capacity, per 12/31/2002 form 10-K.
(c) Per March 31, 2003 form 10-Q.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 24
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value
(Dollars in millions, except per share amount)
NAV at Various Discount Rates
Crude Oil Gas Equivalent --------------------------------------
(MMbbls) (Bcf) (MMBOE) 15.0% 12.5% 10.0%
---------- ---------- ---------- ---------- ---------- ----------
Proven reserves (a)
Existing reserves 26.6 11.8 28.5 $116.5 $125.5 $136.4
Less: development costs (b) ($ 58.8) ($ 58.8) ($ 58.8)
---------- ---------- ----------
Present value of existing reserves $ 57.7 $ 66.7 $ 77.6
Other assets:
Cash $ 9.4 $ 9.4 $ 9.4
Land - 3,300 Acres at $3,500/Acre (c) $ 11.6 $ 11.6 $ 11.6
Refinery $ 10.0 $ 12.5 $ 15.0
Working capital (deficit) (c) ($ 6.8) ($ 6.8) ($ 6.8)
------------------------------ ---------- ---------- ----------
Total assets $ 81.8 $ 93.3 $106.7
Long-term liabilities:
Bank debt (c) ($ 67.7) ($ 67.7) ($ 67.7)
Other debt $ 0.0 $ 0.0 $ 0.0
----------- ---------- ---------- ----------
Total long-term liabilities ($ 67.7) ($ 67.7) ($ 67.7)
--------------------------------------------------------------------------------------------------------------------
Net asset value $ 14.1 $ 25.6 $ 39.0
--------------------------------------------------------------------------------------------------------------------
Diluted shares outstanding 5.2 5.2 5.2
--------------------------------------------------------------------------------------------------------------------
Net asset value per share $ 2.73 $ 4.94 $ 7.52
--------------------------------------------------------------------------------------------------------------------
---------------------
(a) All dollar values shown are based on a strip pricing. The NYMEX prices
assumed were $26.74 / Bbl and $6.16 / Mcf for 2003, $24.82 / Bbl and
$5.26 / Mcf for 2004, and $23.97 / Bbl and $4.65 / Mcf for 2005. Actual
NYMEX strip pricing was used through 2006, held flat thereafter. Crude
oil discount of $8.00 to WTI pricing.
(b) Development costs per Reserve Reports. (c) As of March 31, 2003.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 25
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Discounted Cash Flow Analysis
Projected
---------------------------------------------
Fiscal Year End 12/31 2003 (a) 2004 2005 2006
---------------------------------------------
Revenues $34.8 $50.1 $50.3 $53.5
EBITDA 12.3 16.1 16.5 17.9
Less: Depreciation (5.8) (9.0) (8.8) (9.1)
---------------------------------------------
EBITA 6.5 7.1 7.7 8.8
Less: Income Taxes 0.0 0.0 0.0 0.0
---------------------------------------------
Unlevered After-Tax Income 6.5 7.1 7.7 8.8
Plus: Depreciation 5.8 9.0 8.8 9.1
Plus: Tax Deductible Amortization 0.0 0.0 0.0 0.0
Less: Capital Expenditures (6.7) (12.0) (12.0) (12.0)
Less: Working Capital Investment (4.5) 1.4 (0.1) 0.3
---------------------------------------------
Free Cash Flow $1.1 $5.5 $4.4 $6.3
---------------------------------------------
Terminal Value Based on EBITDA Multiple -------------------------------------------------------------------------------------
Exit Multiple in Year 4 (2006) 5.5 x EBITDA 6.5 x EBITDA 7.5 x EBITDA
-------------------------------------------------------------------------------------
11.0% 13.0% 15.0% 11.0% 13.0% 15.0% 11.0% 13.0% 15.0%
----- ----- ----- ----- ----- ----- ----- ----- -----
Discounted Free Cash Flows 2003 (a) - 2006 $13.1 $12.5 $12.0 $13.1 $12.5 $12.0 $13.1 $12.5 $12.0
Discounted Terminal Value 66.7 62.4 58.4 78.8 73.7 69.0 90.9 85.0 79.6
----- ----- ----- ----- ----- ----- ----- ----- -----
Enterprise Value 79.8 74.9 70.4 91.9 86.2 81.0 104.0 97.6 91.6
Less: Debt @ 3/31/03 (67.7) (67.7) (67.7) (67.7) (67.7) (67.7) (67.7) (67.7) (67.7)
Less: Working Capital Deficit @ 3/31/03 (6.8) (6.8) (6.8) (6.8) (6.8) (6.8) (6.8) (6.8) (6.8)
Plus: Cash @ 3/31/03 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4
----- ----- ----- ----- ----- ----- ----- ----- -----
Implied Equity Value $14.7 $ 9.7 $ 5.2 $26.8 $21.1 $15.8 $38.9 $32.4 $26.5
----- ----- ----- ----- ----- ----- ----- ----- -----
Implied Share Price
Discount EBITDA Terminal Multiple
------------------------------------------------
Rate 5.5x 6.5x 7.5x
------------ ------------ ------------ ------------
11.0% $2.83 $5.17 $7.51
13.0% $1.88 $4.07 $6.26
15.0% $1.01 $3.06 $5.11
---------------------
(a) Represents 9 months stub.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 26
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Analysis at Various Prices
(Dollars in millions, except per share amount)
5/19/03 (a) 5/23/2003
---------- ---------
Price Per Share $3.70 $4.15 $4.50 $5.00 $5.50 $6.00 $6.25 $6.50 $7.00
Premium (Discount)
Unaffected -- 12.2% 21.6% 35.1% 48.6% 62.2% 68.9% 75.7% 89.2%
Current -- -- 8.4% 20.5% 32.5% 44.6% 50.6% 56.6% 68.7%
Implied Equity Value $19.2 $21.5 $23.3 $25.9 $28.5 $31.1 $32.4 $33.8 $36.5
Plus: Debt @ 03/31/03 (b) 67.7 67.7 67.7 67.7 67.7 67.7 67.7 67.7 67.7
Plus: WC Deficit @ 03/31/03 (b) 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8
Less: Cash @ 03/31/03 (b) (9.4) (9.4) (9.4) (9.4) (9.4) (9.4) (9.4) (9.4) (9.4)
----- ----- ----- ----- ----- ----- ----- ----- -----
Implied Aggregate Value $84.3 $86.6 $88.4 $91.0 $93.6 $96.2 $97.6 $98.9 $101.6
----- ----- ----- ----- ----- ----- ----- ----- -----
Refinery (c) Statistic (d) Implied Aggregate Value as a Multiple of Grape (e)
------------------------------------------------------------------------------------------------------------------
Reserves 2002A $10.0 28.5 $2.60 $2.68 $2.75 $2.84 $2.93 $3.02 $3.07 $3.12 $3.21
12.5 28.5 2.52 2.60 2.66 2.75 2.84 2.93 2.98 3.03 3.12
15.0 28.5 2.43 2.51 2.57 2.66 2.75 2.85 2.89 2.94 3.03
EBITDA 2002A $3.5 24.3x 25.0x 25.5x 26.2x 27.0x 27.7x 28.1x 28.5x 29.3x
2003E 14.5 5.8 6.0 6.1 6.3 6.4 6.6 6.7 6.8 7.0
2004E 16.1 5.2 5.4 5.5 5.6 5.8 6.0 6.0 6.1 6.3
Implied Equity Value as a Multiple of Grape
-----------------------------------------------------------------------------------------------------------------
Cash Flow 2003E $0.16 23.4x 26.2x 28.4x 31.6x 34.8x 37.9x 39.5x 41.1x 44.2x
2004E 0.37 9.9 11.1 12.0 13.3 14.7 16.0 16.7 17.3 18.7
---------------------
(a) Grape closing stock price on May 19, 2003, which is one day prior to the
announcement of a possible management buyout. (b) As of March 31st, 2003,
per 1Q 2003 10-Q. (c) Assumed range of value of Refinery.
(d) Modeled using Company estimated production, utilizing CIBC World Markets
price deck.
(e) Implied assumed value as a multiple of Reserves derived by netting value of
refinery from the implied aggregate value then dividing by Company reserves
of 28.5 MMBOE.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 27
Valuation Analysis
------------------------------------------------------------------------------------------------------------------------------------
Premiums Paid Analysis
> Based on the data collected, we can calculate an implied Grape share price, as shown below:
Implied Value Range
------------------------------------------------------------------------------
One Day Range One Day Range
15.0% 20.0% 25.0% 15.0% 20.0% 25.0%
---------------------------------- -------------------------------------
Grape Share Price (a) $ 3.70 $ 3.70 $ 3.70 $ 4.15 $ 4.15 $ 4.15
Premium (b) 15.0% 20.0% 25.0% 15.0% 20.0% 25.0%
Implied Grape Share Price $ 4.26 $ 4.44 $ 4.63 $ 4.77 $ 4.98 $ 5.19
One Week Range One Month Range
20.05 25.0% 30.0% 25.0% 30.0% 35.0%
---------------------------------- -------------------------------------
Grape Share Price (a) $ 3.76 $ 3.76 $ 3.76 $ 3.91 $ 3.91 $ 3.91
Premium (b) 20.0% 25.0% 30.0% 25.0% 30.0% 35.0%
Implied Grape Share Price $ 4.51 $ 4.70 $ 4.89 $ 4.89 $ 5.08 $ 5.28
---------------------
(a) $3.70 represents unaffected Grape closing stock price on May 19, 2003,
which is one day prior to the announcement of a possible management buyout;
and $4.15 represents closing price as of May 23, 2003.
(b) Range of premiums derived from median of all going private and squeeze out
transactions with the equity value <$100 million (January 2001 through May
23, 2003)
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 28
------------------------------------------------------------------------------------------------------------------------------------
4 Appendix
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 29
------------------------------------------------------------------------------------------------------------------------------------
A Valuation Analysis - Supporting Data
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 30
Valuation Analysis - Supporting Data
------------------------------------------------------------------------------------------------------------------------------------
Comparable Company Trading Analysis - E&P
(Dollars in millions, except per share amount)
52-Week
Ticker Price --------------------- % Off Vol. (000)
Company (a) Symbol 05/23/03 High Low High 5/23/03
-------------------------------- ---------- ---------- ----------- --------- --------- ---------- -
▇▇▇▇▇ Petroleum Corporation (b) BRY $ 16.48 $ 18.31 $ 14.40 10.0% 16.5
Nuevo Energy Company (c) NEV 15.35 16.00 9.00 4.1% 68.5
Vintage Petroleum, Inc. (d) VPI 10.39 12.34 8.10 15.8% 110.9
Grape (e) $ 4.15 $ 6.54 $ 3.42 36.5% 10.9
Shares Market + Total + Preferred - Cash and = Aggregate
Outstanding Cap Debt Stock Equivalents Value
------------ ---------- ----------- ----------- ------------ ----------
▇▇▇▇▇ Petroleum Corporation (b) BRY 20.9 $ 343.8 $ 15.0 $ -- $ 11.8 $ 346.9
Nuevo Energy Company (c) NEV 19.2 295.4 423.4 115.0 73.8 760.0
Vintage Petroleum, Inc. (d) VPI 63.9 664.3 887.9 -- 9.3 1,543.0
Grape (e) 5.0 $ 20.5 $ 67.7 $ -- $ 9.4 $ 78.9
------------------------------------------------------------------------------------------------------------------------------------
EBITDA Cash Flow per Share
---------------------------------- -------------------------------
Company (a) 2002 2003 E 2004 E 2002 2003 E 2004 E
-------------------------------- ---------- ---------- ----------- --------- --------- ----------
▇▇▇▇▇ Petroleum Corporation (b) $ 50.9 N/A N/A $ 2.16 $ 2.40 $ 2.40
Nuevo Energy Company (c) 156.4 171.2 161.9 7.12 6.49 5.78
Vintage Petroleum, Inc. (d) 227.4 433.7 356.4 3.57 3.75 3.09
Grape (e) $ 3.5 $ 14.5 $ 16.1 $(1.25) $ 0.16 $ 0.37
Earnings per Share Reserves
---------------------------------- ----------------------------------
2002 2003 E 2004 E PV-10 MMBOE % Oil
---------- ----------- ----------- ----------- ---------- -----------
▇▇▇▇▇ Petroleum Corporation (b) $ 1.37 $ 1.66 $ 1.96 N/A 102 99.0
Nuevo Energy Company (c) 1.28 1.72 1.29 - 249 88.3
Vintage Petroleum, Inc. (d) 0.49 0.99 0.60 2,680.9 529 65.9
Grape (e) $ (2.11) $ (1.12) $ (1.37) $ 177.6 29 93.1
------------------------------------------------------------------------------------------------------------------------------------
AV/EBITDA Price/Cash Flow
---------------------------------- -------------------------------
Company (a) 2002 2003 E 2004 E 2002 2003 E 2004 E
-------------------------------- ---------- ---------- ----------- --------- --------- ----------
▇▇▇▇▇ Petroleum Corporation (b) 6.8x N/A N/A 7.6x 6.9x 6.9x
Nuevo Energy Company (c) 4.9 4.4x 4.7x 2.2 2.4 2.7
Vintage Petroleum, Inc. (d) 6.8 3.6 4.3 2.9 2.8 3.4
Grape (e) 22.7x 5.4x 4.9x NM 26.2x 11.1x
Price/Earnings
------------------------------------ AV/ Debt / Debt /
2002 2003 E 2004 E ▇▇▇ ▇▇▇ Book Cap.
----------- ----------- ----------- ----------- ---------- -----------
▇▇▇▇▇ Petroleum Corporation (b) 12.0x 9.9x 8.4x $ 3.40 $ 0.15 7.7%
Nuevo Energy Company (c) 12.0 8.9 11.9 3.05 1.70 68.2%
Vintage Petroleum, Inc. (d) 21.3 10.5 17.4 2.92 1.68 60.9%
Grape (e) NM NM NM $ 2.72 $ 2.33 73.9%
-------------------------------------------------------------------------------------------------------------
Average 6.2x 4.0x 4.5x 4.2x 4.0x 4.3x 15.1x
Adjusted Average 6.8 N/M N/M 2.9 2.8 3.4 12.0
Average 9.8x 12.6x $ 3.12 $ 1.18 12 45.6%
Adjusted Average 9.9 11.9 3.05 1.68 60.9%
-------------------------------------------------------------------------------------------------------------
---------------------
(a) Historicals per published financials and exclude non-recurring and
extraordinary items.
(b) ▇▇▇▇▇ Petroleum Corporation projections per First Call Consensus estimates,
dated May 23, 2003.
(c) Nuevo Energy Company projections per RBC Capital Markets equity research
report, dated May 14, 2003.
(d) Vintage Petroleum projections per CIBC World Markets equity research
report, May 22, 2003.
(e) Grape projections provided by Grape management.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 31
Valuation Analysis - Supporting Data
------------------------------------------------------------------------------------------------------------------------------------
Comparable Company Trading Analysis - R&M
(Dollars in millions, except per share amount)
Share Price
-----------------------
52-week Shares
Ticker ------------ Outstanding Market + Preferred + Total = Enterprise
Company (a) Symbol 05/23/03 High Low (mm) Cap. Stock Debt - Cash Value
----------- ------ -------- ---- --- ---- ---- ----- ---- ---- -----
Frontier Oil Corporation (b) FTO $16.60 $19.25 $ 10.68 51.7 $ 857.6 $ - $ 263.2 $ 113.9 $1,006.9
Giant Industries, Inc. (c) GI 6.14 9.20 1.86 8.8 53.9 - 395.0 23.4 425.6
Tesoro Petroleum Corporation (d) TSO 7.45 8.55 1.24 64.6 481.4 - 1,906.0 13.2 2,373.8
Valero Energy Corporation (e) VLO 37.80 42.40 23.15 114.3 4,318.9 372.5 4,160.4 770.8 8,081.0
Grape (f) $ 4.15 $ 6.54 $ 3.42 5.0 20.5 $ - $ 67.7 $ 9.4 $ 78.9
Earnings Per Share Cash Flow Per Share EBITDA Throughput
------------------------ --------------------------- --------------------------- ---------------
Company (a) 2002A 2003E 2004E 2002A 2003E 2004E 2002A 2003E 2004E MBbls / Day (g)
----------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---------------
Frontier Oil Corporation (b) $ 0.05 $ 2.95 $ 3.30 $ 1.10 $ 4.65 $ 4.95 $ 55.6 $ 240.2 $ 317.2 144.9
Giant Industries, Inc. (c) (1.01) 1.20 1.75 3.20 6.50 7.16 55.2 56.0 64.0 87.4
Tesoro Petroleum Corporation (d) (1.80) 1.16 1.00 0.42 4.28 4.38 120.4 716.0 627.0 465.0
Valero Energy Corporation (e) 0.83 5.90 5.95 5.20 11.55 11.25 920.2 1,919.0 1,910.0 1,702.0
Grape (f) $(2.11) $(1.12) $(1.37) $(1.25) $ 0.16 $ 0.37 $ 3.5 $ 14.5 $ 16.1 10.0
P/E P/CF Enterprise Value/EBITDA Market Cap./
------------------------- --------------------------- -------------------------- Stockholders'
Company (a) 2002A 2003E 2004E 2002A 2003E 2004E 2002A 2003E 2004E Equity
----------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
Frontier Oil Corporation (b) N/A x 5.6 x 5.0 x 15.1 x 3.6 x 3.4 x 18.1 x 4.2 x 3.2 x 5.3 x
Giant Industries, Inc. (c) NM 5.1 3.5 1.9 0.9 0.9 7.7 7.6 6.7 0.4
Tesoro Petroleum Corporation (d) NM 6.4 7.5 17.7 1.7 1.7 19.7 3.3 3.8 0.5
Valero Energy Corporation (e) 45.5 6.4 6.4 7.3 3.3 3.4 8.8 4.2 4.2 0.9
Grape (f) NM x NM x NM x NM x 26.2 x 11.1 x 22.7 x 5.4 x 4.9 x 0.5 x
------------------------------------------------------------------------------------------------------------------------------------
Average 45.5 x 5.9 x 5.6 x 10.5 x 2.4 x 2.3 x 13.6 x 4.8 x 4.5 x 1.6 x
Median 45.5 6.0 5.7 11.2 2.5 2.5 13.4 4.2 4.0 0.7
High 45.5 6.4 7.5 17.7 3.6 3.4 19.7 7.6 6.7 5.3
Low 45.5 5.1 3.5 1.9 0.9 0.9 7.7 3.3 3.2 0.4
------------------------------------------------------------------------------------------------------------------------------------
Table continued:
Enterprise
Value / Debt/
Company (a) Throughput Ent. Value
----------- ---------- ----------
Frontier Oil Corporation (b) $6.95 26%
Giant Industries, Inc. (c) 4.87 93%
Tesoro Petroleum Corporation (d) 5.10 80%
Valero Energy Corporation (e) 4.75 51%
Grape (f) $7.89 86%
---------------------------------------------------------
Average $ 5.42 63%
Median 4.99 65.9%
High 6.95 92.8%
Low 4.75 26.1%
---------------------------------------------------------
---------------------
(a) Historical financials per published financials and exclude non-recurring
and extraordinary items.
(b) Frontier Oil Corporation projections per ▇▇▇▇▇▇ Brothers equity research
report, dated April 3, 2003. Statistics include pro forma adjustment for
acquisition of ▇▇▇▇▇ Corp. for issuance of 15.5 million shares, aggregate
payment of $172.5 million in cash from existing cash flow and the
assumption of $26 million of debt.
(c) Giant Industries, Inc. projections per ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ equity
research report, dated May 8, 2003.
(d) Tesoro Petroleum Corporation projections per ▇▇▇▇▇▇▇ ▇▇▇▇▇ equity research
report, dated May 1, 2003.
(e) Valero Energy Corporation projections per ▇▇▇▇▇▇ Brothers equity research
report, dated April 25, 2003.
(f) Grape projections provided by Grape management.
(g) Throughput capacity per March 31, 2003 10-Q.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 32
Valuation Analysis - Supporting Data
------------------------------------------------------------------------------------------------------------------------------------
Precedent Asset Transactions - California Oil - E&P
Transaction Reserve Reserves
Date Value Value Oil Gas
Announced Buyer Seller ($mm) ($mm) (Mmbbls) (Bcf)
--------- ----- ------ ----- ----- -------- -----
08/17/96 ▇▇▇▇▇ Petroleum Co. ▇▇▇▇▇▇▇▇▇ Oil $ 25.5 $ 19.0 7.1 -
08/30/96 Nuevo Energy Company Unocal Corp. 492.0 427.0 120.0 162.0
12/16/96 ▇▇▇▇▇ Petroleum Co. Exxon Corp. 49.5 49.5 14.0 22.3
02/27/97 Plains Resources, Inc. Chevron Corp. 25.0 25.0 20.8 14.6
11/12/97 Plains Resources, Inc. Shell Oil Co. 22.1 22.1 20.0 -
03/31/98 National Fuel Gas Comp. Whittier Trust Comp. 146.3 146.3 40.0 -
12/23/98 ▇▇▇▇▇ Petroleum Co. Aera Energy LLC 35.0 35.0 20.0 -
06/29/99 Nuevo Energy Company Texaco, Inc. 61.0 61.0 29.4 -
11/17/99 Occidental Petroleum Atlantic Richfield Comp. 57.0 57.0 98.0 -
01/05/00 Vintage Petroleum, Inc. Nuevo Energy Company 29.6 29.6 8.5 7.8
06/05/01 Grape Vintage Petroleum, Inc. 17.8 17.8 5.6 -
03/03/03 BlackSand Partners L.P. Nuevo Energy Company 59.0 59.0 28.8 19.2
Total Transaction Reserve Implied Value
Date Reserves Value Value Per Daily
Announced Buyer Seller (MBOE) ($/BOE) ($/BOE) (BOE Produced
--------- ----- ------ ------ ------- ------- -------------
08/17/96 ▇▇▇▇▇ Petroleum Co. ▇▇▇▇▇▇▇▇▇ Oil 7.1 $ 3.59 $ 2.68 $ 14,615
08/30/96 Nuevo Energy Company Unocal Corp. 147.0 3.35 2.90 11,593
12/16/96 ▇▇▇▇▇ Petroleum Co. Exxon Corp. 17.7 2.79 2.79 45,169
02/27/97 Plains Resources, Inc. Chevron Corp. 23.2 1.08 1.08 26,783
11/12/97 Plains Resources, Inc. Shell Oil Co. 20.0 1.11 1.11 14,733
03/31/98 National Fuel Gas Comp. Whittier Trust Comp. 40.0 3.66 3.66 29,260
12/23/98 ▇▇▇▇▇ Petroleum Co. Aera Energy LLC 20.0 1.75 1.75 12,500
06/29/99 Nuevo Energy Company Texaco, Inc. 29.4 2.07 2.07 22,183
11/17/99 Occidental Petroleum Atlantic Richfield Comp. 98.0 0.58 0.58 1,900
01/05/00 Vintage Petroleum, Inc. Nuevo Energy Company 9.8 3.02 3.02 11,804
06/05/01 Grape Vintage Petroleum, Inc. 5.6 3.17 3.17 8,658
03/03/03 BlackSand Partners L.P. Nuevo Energy Company 32.0 1.84 1.84 26,002
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------
High $3.66 $3.66 $ 45,169
Average 2.33 2.22 18,767
Adjusted Average 2.38 2.24 17,813
Low 0.58 0.58 1,900
------------------------------------------------------------------------------
---------------------
Source: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Database.
Note: Selected West Coast asset transactions with a transaction value greater than $15.0 million.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 33
Valuation Analysis - Supporting Data
------------------------------------------------------------------------------------------------------------------------------------
Precedent Asset Transactions - R&M Universe
Transaction Crude Proc.
Date Value Capacity
Announced Buyer Seller Region ($mm)(a) (Mbbl/d)
--------- ----- ------ ------ -------- --------
02/05/02 Tesoro Petroleum Corp. Valero Energy Corp. CA $ 870 168
06/04/01 Valero Energy Corp. El Paso Energy TX 399 110
03/20/01 Valero Energy Corp. Huntway Refining Co. CA 54 19
07/13/01 Tosco Corp. BP plc LA 939 250
07/05/00 UDS Tosco CA 968 168
04/06/00 Tosco Corp. Equilon IL 420 286
03/02/00 Valero Energy Corp. ExxonMobil CA 895 130
06/04/99 Frontier Oil Equilon KA 170 109
07/01/98 ▇▇▇▇▇ USA BP plc OH 265 170
05/21/98 Valero Energy Corp. Mobil NJ 336 155
05/01/98 Tesoro Petroleum Corp. Shell Oil WA 251 108
$/b/d of Transaction JSH
Date Crude Proc. Value / Upgrade
Announced Buyer Seller Region Capacity EBITDA Complx.Ratio(b)
--------- ----- ------ ------ -------- ------ ---------------
02/05/02 Tesoro Petroleum Corp. Valero Energy Corp. CA $ 5,179 3.3x 1.6
06/04/01 Valero Energy Corp. El Paso Energy TX 1,045 4.9 1.2
03/20/01 Valero Energy Corp. Huntway Refining Co. CA 2,844 2.5 N/A
07/13/01 Tosco Corp. BP plc LA 2,640 N/A 1.2
07/05/00 UDS Tosco CA 4,870 5.1 1.6
04/06/00 Tosco Corp. Equilon IL 1,466 3.0 1.0
03/02/00 Valero Energy Corp. ExxonMobil CA 5,846 5.0 2.3
06/04/99 Frontier Oil Equilon KA 1,560 N/A 1.3
07/01/98 ▇▇▇▇▇ USA BP plc OH 1,341 2.7 1.0
05/21/98 Valero Energy Corp. Mobil NJ 1,471 N/A 1.4
05/01/98 Tesoro Petroleum Corp. Shell Oil WA 2,328 5.3 1.0
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Transaction Crude Proc. $/b/d of Transaction
Value Capacity Crude Proc. Value /
($mm)(a) (Mbbl/d) Capacity EBITDA
-----------------------------------------------------------------------------------------------
Max $ 968 286 $ 5,846 5.3x
Average 506 152 2,781 4.0
Adjusted Average 505 152 2,633 4.0
Low 54 19 1,045 2.5
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Precedent Asset Transactions - Selected R&M Transactions
> The list below details precedent transactions taken from the Universe
above. Select transactions have been included due to their complexity.
----------------------------------------------------------------------------------------------------------------------------------
Transaction Crude Proc.
Date Value Capacity
Announced Buyer Seller Region ($mm) (a) (Mbbl/d)
---------------- --------------------------------- --------------------------- ------- ------------ -----------
06/04/01 Valero Energy Corp. El Paso Energy TX $ 399 110
03/20/01 Valero Energy Corp. Huntway Refining Co. CA 54 19
07/13/01 Tosco Corp. BP plc LA 939 250
04/06/00 Tosco Corp. Equilon IL 420 286
06/04/99 Frontier Oil Equilon KA 170 109
07/01/98 ▇▇▇▇▇ USA BP plc OH 265 170
05/21/98 Valero Energy Corp. Mobil NJ 336 155
05/01/98 Tesoro Petroleum Corp. Shell Oil WA 251 108
$/ b/d of Transaction
Date Crude Proc. Value / Upgrade
Announced Buyer Seller Region Capacity. EBITDA Complx. Ratio (b)
--------------- --------------------------------------------- ------- ------------ -------------- ----------------
06/04/01 Valero Energy Corp. El Paso Energy TX $ 1,045 4.9x 1.2
03/20/01 Valero Energy Corp. Huntway Refining Co. CA 2,844 2.5 N/A
07/13/01 Tosco Corp. BP plc LA 2,640 N/A 1.2
04/06/00 Tosco Corp. Equilon IL 1,466 3.0 1.0
06/04/99 Frontier Oil Equilon KA 1,560 N/A 1.3
07/01/98 ▇▇▇▇▇ USA BP plc OH 1,341 2.7 1.0
05/21/98 Valero Energy Corp. Mobil NJ 1,471 N/A 1.4
05/01/98 Tesoro Petroleum Corp. Shell Oil WA 2,328 5.3 1.0
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Transaction Crude Proc. $/b/d of Transaction
Value Capacity Crude Proc. Value /
($mm)(a) (Mbbl/d) Capacity EBITDA
------------------------------------------------------------------------------------------------
Max $ 939 286 $ 2,844 5.3x
Average 354 151 1,837 3.7
Adjusted Average 307 150 1,801 3.5
Low 54 19 1,045 2.5
------------------------------------------------------------------------------------------------
---------------------
(a) Total Transaction Value is the total $ amount paid to seller, including
cash, notes and assumed debt less cash and/or cash equivalents.
(b) JSH Upgrade Factor/Complexity Ratio takes into account upgrade components
in relation to base crude distillation capacity.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 34
Valuation Analysis - Supporting Data
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Premiums Paid Analysis -Going Private & Minority Squeezouts (a)
(Dollars in millions, except per share amount)
Premia prior to Announcement
----------------------------
Date Equity Enterprise
Announced Target Name Acquiror Name Value Value 1 Day 1 Week 4 Weeks
--------- ----------- ------------- ----- ----- ----- ------ -------
05/05/03 Semele Group Inc Investor Group $2.5 $48.7 31.9% 31.9% 29.0%
05/05/03 Westerbeke Corp Westerbeke Acquisition Corp 6.0 8.9 70.5% 77.5% 63.9%
04/25/03 Ascent Media Group Inc Liberty Media Corp 63.7 671.8 10.3% 5.5% 5.5%
04/02/03 On Command Corp Liberty Media Corp 24.1 380.2 11.4% 11.4% 11.4%
04/01/03 Liberty Satellite & Tech Inc Liberty Media Corp 95.0 709.2 (5.3%) (5.8%) (18.7%)
03/26/03 InvestorsBancorp,Waukesha,WI Investor Group 14.2 --- (1.4%) 4.8% 6.0%
03/21/03 ▇▇▇▇ Group Inc Dirk Inc 28.8 21.8 86.2% 86.2% 72.0%
02/20/03 Riverside Group Inc Investor 0.2 16.9 33.3% 33.3% 33.3%
01/22/03 Printcafe Software Inc Creo Inc 13.8 22.3 8.3% 13.0% 22.6%
01/15/03 Allcity Insurance Co Leucadia National Corp 19.5 26.6 1427.8% 1000.0% 1095.7%
12/16/02 RDO Equipment Co RDO Holdings Co 75.0 133.0 37.8% 41.4% 51.8%
10/11/02 Landair Corp Investor Group 96.2 99.4 25.0% 31.1% 24.9%
09/19/02 WJ Communications Inc Fox ▇▇▇▇▇ & Co LLC 62.2 NM 0.9% 0.0% 31.0%
09/03/02 Sandata Technologies Inc Sandata Acquisition Corp 4.9 6.5 32.6% 32.6% 51.6%
08/13/02 R-B Rubber Products Inc Dash Multi-Corp Inc 9.3 11.4 83.0% 69.7% 75.0%
08/09/02 Sandata Technologies Inc Investor Group 3.8 6.6 0.0% 200.0% 87.5%
06/17/02 Fortress Group Inc Lennar Corp 11.5 112.3 16.8% 18.7% 20.7%
05/16/02 Electric Lightwave Inc Citizens Communications Co 35.9 893.7 105.9% 79.5% (10.3%)
05/16/02 Balanced Care Corp IPC Advisors SARL 8.5 118.7 150.0% 177.8% 150.0%
04/18/02 Partsbase Inc Investor Group 21.1 NM 36.4% 44.2% 94.8%
03/14/02 Konover Property Trust Inc Investor Group 71.6 301.3 20.0% 20.0% 16.7%
03/08/02 Hawker Pacific Aerospace Lufthansa Technik AG 33.1 102.3 2.5% 3.2% 25.5%
02/19/02 Income Opportunity Realty Inv American Realty Investors 27.3 81.3 9.8% (27.6%) 7.0%
11/16/01 Sun Community Bancorp Ltd Capitol Bancorp Ltd,Lansing,MI 62.6 505.2 5.5% 0.6% 0.0%
10/30/01 Income Opportunity Realty Inv ▇▇▇▇▇▇ Capital Management LLC 37.4 87.8 46.5% (15.3%) 97.7%
10/25/01 Enex Resources Corp 3TEC Energy Corp 25.3 25.3 107.4% 107.4% 115.4%
10/15/01 IIC Industries Inc CP Holdings Ltd 59.8 88.4 (16.0%) (17.7%) (22.2%)
10/05/01 Zengine Inc MCSi Inc 67.1 16.9 (1.3%) 3.3% (1.3%)
09/18/01 Organic Inc Seneca Investments LLC 29.4 13.7 13.8% 17.9% (17.5%)
08/31/01 American Resources Offshore Blue Dolphin Energy Co 3.1 4.9 13.3% 2.6% 15.1%
08/01/01 National Home Centers Inc ▇▇▇▇▇ ▇▇▇▇▇▇▇ 10.0 25.2 26.1% 20.7% 33.3%
07/16/01 Peapod Inc(Koninklijke) Koninklijke Ahold NV 39.2 141.1 72.0% 76.2% 90.3%
05/22/01 Quizno's Corp Investor Group 26.0 53.4 14.9% 16.4% 15.2%
05/09/01 Pierre Foods Inc Investor Group 14.5 125.0 53.9% 158.1% 150.0%
01/18/01 Intercontinental Life Corp Financial Industries Corp 92.6 92.6 4.9% 14.2% 25.3%
01/16/01 ▇▇▇▇▇▇ ▇▇▇ Co Inc Investor Group 30.6 29.3 73.9% 77.8% 60.0%
12/20/00 ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc Vitamin Shoppe Industries Inc 20.4 13.0 220.0% 113.3% 166.7%
11/10/00 ▇▇▇▇'▇ Cigar Holding Inc HCH Acquisition Corp 34.8 28.1 57.1% 44.3% 54.4%
11/06/00 Ellott Brothers Inc Investor Group 13.8 58.8 13.8% 19.1% 28.0%
10/27/00 Neutral Posture Ergonomics Inc Investor Group 5.6 3.1 19.7% 37.6% 41.1%
10/17/00 Trex Medical Corp(ThermoTrex) Thermo Electron Corp 70.3 72.9 (46.3%) (37.5%) (25.2%)
09/01/00 Minolta-QMS Inc(Minolta Co) Minolta Investments Co 79.9 148.0 100.0% 100.0% 95.9%
07/11/00 In Home Health Inc Manor Care Inc 33.6 34.8 23.3% 28.7% 23.3%
06/22/00 American Educational Products G C Associates Holding Corp 12.4 15.9 3.9% 3.9% 5.3%
05/04/00 Petroglyph Energy Inc Intermountain Industries 20.4 38.3 42.5% 107.3% 75.4%
01/31/00 Metrika Systems Corp Thermo Instrument Systems Inc 66.8 81.2 (6.5%) 0.0% 46.9%
01/31/00 Sunrise Intl Leasing Inc King Management Corp 37.6 112.1 (4.6%) 0.0% 1.2%
--------------------------------------------------------------------------------
Premia prior to Announcement
-----------------------------
1 Day 1 Week 4 Weeks
-----------------------------
High 1427.8% 1000.0% 1095.7%
75th Percentile 55.5% 76.9% 73.5%
50th Percentile 20.0% 20.7% 29.0%
25th Percentile 5.2% 3.6% 9.2%
Low (46.3%) (37.5%) (25.2%)
Mean 64.5% 60.2% 64.3%
Median 20.0% 20.7% 29.0%
--------------------------------------------------------------------------------
----------
Source: SDC
(a) Represents selected transactions from January 2000 through 5/23/03 with an equity value less than $100.0 million.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 35
Valuation Analysis - Supporting Data
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Premiums Paid Analysis -Going Private & Minority Squeezouts (a)
Premia prior to Announcement
----------------------------------
Date Equity Enterprise
Announced Target Name Acquiror Name Value Value l Day l Week 4 Weeks
--------- ----------- ------------- ----- ----- ----- ------ -------
08/07/02 Exco Resources Corp ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $295.1 $314.2 20.8 % 22.9 % 22.0 %
10/25/01 Enex Resources Corp 3TEC Energy Corp 25.3 25.3 107.4 % 107.4 % 115.4 %
08/31/01 American Resources Offshore Blue Dolphin Energy Co 3.1 4.9 13.3 % 2.6 % 15.1 %
05/04/00 Petroglyph Energy Inc Intermountain Industries 20.4 38.3 42.5 % 107.3 % 75.4 %
Premia prior to Announcement
---------------------------------------
1 Day 1 Week 4 Weeks
---------------------------------------
High 107.4 % 107.4 % 115.4 %
Low 13.3 % 2.6 % 15.1 %
Mean 46.0 % 60.0 % 57.0 %
----------------------------------------------------------------------------------------
---------------------
Source: SDC
(a) Represents selected E&P transactions from January 2000 through 5/23/03 with
an equity value less than $100.0 million, excluding Exco transaction with
an equity value greater than $100 million.
B Termination Fee Analysis
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 36
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B Termination Fee Analysis
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 37
Termination Fee Analysis - Going Private and Minority Squeezouts (a)
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----------------------------------------------------------------------------------------------------------------
Date Equity
Announced Target Name Acquiror Name Value
----------------------------------------------------------------------------------------------------------------
05/05/03 Semele Group Inc Investor Group $ 2.5
04/25/03 Ascent Media Group Inc Liberty Media Corp 63.7
04/01/03 Liberty Satellite & Tech Inc Liberty Media Corp 95.0
03/26/03 InvestorsBancorp,Waukesha,WI Investor Group 14.2
03/21/03 ▇▇▇▇ Group Inc Dirk Inc 28.8
02/20/03 Riverside Group Inc Investor 0.2
01/22/03 Printcafe Software Inc Creo Inc 13.8
01/15/03 Allcity Insurance Co Leucadia National Corp 19.5
12/16/02 RDO Equipment Co RDO Holdings Co 75.0
10/11/02 Landair Corp Investor Group 96.2
09/03/02 Sandata Technologies Inc Sandata Acquisition Corp 4.9
08/27/02 (b) Exco Resources Corp. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 95.1
08/13/02 R-B Rubber Products Inc Dash Multi-Corp Inc 9.3
06/17/02 Fortress Group Inc Lennar Corp 11.5
05/16/02 Electric Lightwave Inc Citizens Communications Co 35.9
05/16/02 Balanced Care Corp IPC Advisors SARL 8.5
04/18/02 Partsbase Inc Investor Group 21.1
03/14/02 Konover Property Trust Inc Investor Group 71.6
03/08/02 Hawker Pacific Aerospace Lufthansa Technik AG 33.1
02/19/02 Income Opportunity Realty Inv American Realty Investors 27.3
11/16/01 Sun Community Bancorp Ltd Capitol Bancorp Ltd,Lansing,MI 62.6
10/30/01 Income Opportunity Realty Inv ▇▇▇▇▇▇ Capital Management LLC 37.4
10/25/01 Enex Resources Corp 3TEC Energy Corp 25.3
10/15/01 IIC Industries Inc CP Holdings Ltd 59.8
10/05/01 Zengine Inc MCSi Inc 67.1
09/18/01 Organic Inc Seneca Investments LLC 29.4
08/31/01 American Resources Offshore Blue Dolphin Energy Co 3.1
08/01/01 National Home Centers Inc ▇▇▇▇▇ ▇▇▇▇▇▇▇ 10.0
07/16/01 Peapod Inc(Koninklijke) Koninklijke Ahold NV 39.2
05/22/01 Quizno's Corp Investor Group 26.0
05/09/01 Pierre Foods Inc Investor Group 14.5
04/02/01 Milestone Properties, Inc.2 Concord Assets Group, Inc. / Mgt. Group 11.4
01/18/01 Intercontinental Life Corp Financial Industries Corp 92.6
01/16/01 ▇▇▇▇▇▇ ▇▇▇ Co Inc Investor Group 30.6
12/20/00 ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc Vitamin Shoppe Industries Inc 20.4
11/10/00 ▇▇▇▇'▇ Cigar Holding Inc HCH Acquisition Corp 34.8
11/06/00 Ellott Brothers Inc Investor Group 13.8
10/27/00 Neutral Posture Ergonomics Inc Investor Group 5.6
10/17/00 Trex Medical Corp(ThermoTrex) Thermo Electron Corp 70.3
09/01/00 Minolta-QMS Inc(Minolta Co) Minolta Investments Co 79.9
07/11/00 In Home Health Inc Manor Care Inc 33.6
06/22/00 American Educational Products, Inc.3 G.C. Associates Holdings Corp. 10.8
01/31/00 Sunrise Intl Leasing Inc King Management Corp 37.6
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Date Enterprise
Announced Target Name Acquiror Name Value 1 Day 1 Week 4 Weeks
------------------------------------------------------------------------------------------------------------------------------------
05/05/03 Semele Group Inc Investor Group $ 48.7 -- -- --
04/25/03 Ascent Media Group Inc Liberty Media Corp 671.8 -- -- --
04/01/03 Liberty Satellite & Tech Inc Liberty Media Corp 709.2 -- -- --
03/26/03 InvestorsBancorp,Waukesha,WI Investor Group -- -- -- --
03/21/03 ▇▇▇▇ Group Inc Dirk Inc 21.8 -- -- --
02/20/03 Riverside Group Inc Investor 16.9 -- -- --
01/22/03 Printcafe Software Inc Creo Inc 22.3 -- -- --
01/15/03 Allcity Insurance Co Leucadia National Corp 26.6 -- -- --
12/16/02 RDO Equipment Co RDO Holdings Co 133.0 -- -- --
10/11/02 Landair Corp Investor Group 99.4 -- -- --
09/03/02 Sandata Technologies Inc Sandata Acquisition Corp 6.5 -- -- --
08/27/02 (b) Exco Resources Corp. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 341.2 $ 8.5 2.9% 2.5%
08/13/02 R-B Rubber Products Inc Dash Multi-Corp Inc 11.4 0.2 2.1% 1.7%
06/17/02 Fortress Group Inc Lennar Corp 112.3 1.5 13.1% 1.3%
05/16/02 Electric Lightwave Inc Citizens Communications Co 893.7 -- -- --
05/16/02 Balanced Care Corp IPC Advisors SARL 118.7 0.3 2.9% 0.2%
04/18/02 Partsbase Inc Investor Group NM -- -- --
03/14/02 Konover Property Trust Inc Investor Group 301.3 3.0 4.2% 1.0%
03/08/02 Hawker Pacific Aerospace Lufthansa Technik AG 102.3 -- -- --
02/19/02 Income Opportunity Realty Inv American Realty Investors 81.3 -- -- --
11/16/01 Sun Community Bancorp Ltd Capitol Bancorp Ltd,Lansing,MI 505.2 -- -- --
10/30/01 Income Opportunity Realty Inv ▇▇▇▇▇▇ Capital Management LLC 87.8 -- -- --
10/25/01 Enex Resources Corp 3TEC Energy Corp 25.3 -- -- --
10/15/01 IIC Industries Inc CP Holdings Ltd 88.4 -- -- --
10/05/01 Zengine Inc MCSi Inc 16.9 -- -- --
09/18/01 Organic Inc Seneca Investments LLC 13.7 -- -- --
08/31/01 American Resources Offshore Blue Dolphin Energy Co 4.9 -- -- --
08/01/01 National Home Centers Inc ▇▇▇▇▇ ▇▇▇▇▇▇▇ 25.2 -- -- --
07/16/01 Peapod Inc(Koninklijke) Koninklijke Ahold NV 141.1 0.5 1.3% 0.4%
05/22/01 Quizno's Corp Investor Group 53.4 0.5 1.9% 0.9%
05/09/01 Pierre Foods Inc Investor Group 125.0 0.5 3.5% 0.4%
04/02/01 Milestone Properties, Inc.2 Concord Assets Group, Inc. / Mgt. Group 2.1 0.3 2.2% 12.1%
01/18/01 Intercontinental Life Corp Financial Industries Corp 92.6 -- -- --
01/16/01 ▇▇▇▇▇▇ ▇▇▇ Co Inc Investor Group 29.3 -- -- --
12/20/00 ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc Vitamin Shoppe Industries Inc 13.0 -- -- --
11/10/00 ▇▇▇▇'▇ Cigar Holding Inc HCH Acquisition Corp 28.1 -- -- --
11/06/00 Ellott Brothers Inc Investor Group 58.8 -- -- --
10/27/00 Neutral Posture Ergonomics Inc Investor Group 3.1 -- -- --
10/17/00 Trex Medical Corp(ThermoTrex) Thermo Electron Corp 72.9 -- -- --
09/01/00 Minolta-QMS Inc(Minolta Co) Minolta Investments Co 148.0 -- -- --
07/11/00 In Home Health Inc Manor Care Inc 34.8 -- -- --
06/22/00 American Educational Products, Inc.3 G.C. Associates Holdings Corp. 11.5 0.5 4.4% 4.1%
01/31/00 Sunrise Intl Leasing Inc King Management Corp 112.1 1.0 2.7% 0.9%
Termination Termination
Fees as a % Fees as a % of
Termination of Equity Enterprise
Fees Value Value
----------------------------------------------------------------------------------------------
High $ 8.5 13.1 % 12.1 %
75th Percentile $ 1.3 3.8 % 2.1 %
50th Percentile $ 0.5 2.9 % 1.0 %
25th Percentile $ 0.4 2.2 % 0.6 %
Low $ 0.2 1.3 % 0.2 %
Mean $ 1.5 3.7 % 2.3 %
Median $ 0.5 2.9 % 1.0 %
---------------------
Source: SDC
(a) Represents selected transactions from January 2000 through current with an
equity value less than $100.0 million.
(b) Exco Resources transaction has an equity value greater than $100 million.
[GRAPHIC OMITTED] PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOD / May 27, 2003 38
