1. Finance & Investment Club Energy Sector Summer 2012 SA of Energy Sector: Jeremy Lim PETROLEUM INDUSTRY ANALYSIS

2. 2 2 Industry Definition Calumet Specialty Products Partners LP (NASDAQ: CLMT) Crosstex Energy LP (NASDAQ: XTEX) Adam Resources & Energy Inc. (NYSE: AE) Delek US Holdings Inc. (NYSE: DK) Rentech Inc. (NYSE: RTK) Alon USA Energy Inc. (NYSE: AlJ)  Firms in this industry explore, extract, refine, transport and market petroleum products. The largest volume products are fuel oil and gasoline.  Consumer of petroleum are worldwide, with developed nations being the largest.

3. 3 3 Petroleum Industry Breakdown Industry Breakdown By Market Cap ($BLN) Breakdown By March 2012 Revenue 1 1 Total revenue = $24,728,700 DK$ 8.2251B RTK$ 0.2157 B CLMT$ 3.6993 B XTEX$ 1.8959 B AE$ 3.428 B ALJ$ 7.2647 B Petroleum $4.7B (.02%) Oil & Gas Refining & Marketing $8,125.1B (4.0%) Major Integrated Oil & Gas $110,212.6B (53.6%) Basic Materials $205,563.5B (100%)

4. 4 4 Revenue Segment Generation

5. 5 5 Revenue Generation Raw MaterialsWork-In-ProgressFinished Goods

6. 6 6 Geographical Breakdown

7. 7 7 Time Series Analysis: Revenue vs. Oil Production (Barrels)  Revenue – World Production Correlation: 0.484Revenue – US Production Correlation: -0.485

8. 8 8 Trends Overview Trend 1Trend 2Trend 3

9. 9 9 Trends Overview Demand for Refined Petroleum Trend 2Trend 3

10. 10 Trend 1: Demand For Refined Petroleum  Revenue figures have been increasing steadily since 2009 and is forecasted to continue through to 2016 –Indispensable nature of oil industry of economy and national defense –Increase in crude petroleum reserve  Petroleum industry Is backbone in USA and is expected to remain the leading energy source at 38% out of total energy consumed.  In 2015, the United States oil & gas market is forecast to have a volume of 12,264.7 million BOE, an increase of 13.8% since 2010.  A 2.2% Revenue increase is expected in 2012 and the performance of the industry is forecast to accelerate at a projected CAGR of 2.9%. Industry Revenue Growth (% Change) Industry Total Revenue

11. 11 Trends Overview Trend 1 Increasing M&A and Joint Ventures Trend 3

12. 12 Trend 2: Mergers, Acquisitions and Joint Ventures continue at record pace  More companies are motivated by synergies; diversifying assets; reducing costs; enhancing stock values; responding to price volatility.  Partnerships with governments have also taken place to work out reasonable tax and fiscal regimes  Over 2,600 merger transactions have occurred since the 1990’s involving all three segments of the petroleum industry. –Upstream – 85% –Midstream – 2% –Downstream – 13%  Companies will be able to expand and improve their technologies as discovered oil volumes are greater than oil demand. Exploration and Production M&A Landscape Billions of Oil Equivalent Barrels

13. 13 Trends Overview Trend 1Trend 2Shale Gas

14. 14 Trend 3: Shale Gas  US shale-led transactions of total upstream transaction value has increased to 68%.  US has 862 trillion cubic feet of shale gas reserves.  19 geographic basins are recognized sources of shale gas where an estimated 35,000 wells were drilled in 2006.  This shows that US is globally poised to be a significant player in this market. US Shale Transactions – Value and Count

15. 15 Comps. Financials Symbol Market Cap(M) 52 high Closing PriceP/EEPS EV/ EBITDA Debt/ Equity Debt/ EBITDALTM ROE Revenue (B) AE187.675.1344.488.15.672.2x0021.8%3.428 ALJ611.912.5610.897.9-7.0x2.514.2x-0.2%7.265 CLMT1,419.8027.7424.6810.11.99.2x1.072.9x18.3%3.699 XTEX984.618.2416.5--0.359.6x0.994.2x0.1%1.896 DK1,105.3020.0018.9962.83.1x0.641.0x33.3%8.225 RTK429.42.401.88NM-0.285.2x0.231.1xNA0.216 High1,419.8075.1344.4810.15.679.6x2.514.2x33.3%8.225 Low429.42.401.886-0.352.2x00-0.2%0.216 Median798.2519.1217.7581.906.1x0.822x18.3%3.565 Mean789.7726.0119.578.0251.686.05x0.912.23x14.7%4.121

16. 16 Petroleum Industry Recommendation: POSITIVE Subsector operates with trends signifying : 1) Gross margin fluctuations due to lead demand and lagging supply 2) Vital but finite commodity creates an inelastic demand Delek is set to outperform subsector and will be researched because : 1) Debt / Equity:.64 (Median:.82, Mean:.91) 2) EV/EBITDA: 3.10x (Median: 6.10x, Mean: 6.05x) 3) Diversity in company assets from refining and marketing to retailing. The petroleum industry however must combat the key risks of : 1) Staying competitive in technological advancements 2) Possible synergies created from other M&A transactions of other companies Delek US Holdings Inc. (NYSE: DK)

17. 17 Thank you for listening. Any questions?  Industry Definition Industry Definition  Industry Breakdown Industry Breakdown  Revenue Segmentation Revenue Segmentation  Revenue Generation Revenue Generation  Geographical Breakdown Geographical Breakdown  Time-Series Analysis Time-Series Analysis  Trend 1: Demand for Refined Petroleum Trend 1: Demand for Refined Petroleum  Trend 2: Mergers, Acquisition and Joint Ventures Trend 2: Mergers, Acquisition and Joint Ventures  Trend 3: Shale Gas Trend 3: Shale Gas  Comps Financials Comps Financials  Recommendation Recommendation