This week’s buyers: Samchully and Citadel Energy

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Samchully Asset Management Co. Ltd. Acquires 34% Interest in Cardinal Gas Services

(October 20, 2014) Samchully Asset Management Co. Ltd. today announced that it has completed the acquisition of a 34% interest in Cardinal Gas Services LLC, located in Ohio’s Utica Shale play, from TOTAL E&P USA, INC. and EV Energy Partners, L.P., who owned 25% and 9% of CGS, respectively.

The total purchase price of $544 million ($612 million including purchase price adjustments) is comprised of 100% cash. For purposes of the acquisition, Samchully AMC has established a special purpose vehicle that is owned by a new fund, with investors comprised of Korean pension funds and E1, a Korean strategic investor.

CGS is a wet gas gathering system in the heart of the Utica Shale play in eastern Ohio. The system was established in 2011 and has grown rapidly to support the fast-growing production within the area. CGS is operated by Access Midstream Partners, who will continue to own the remaining 66% of the system, and is backed by 20-year, cost of service contracts.

Following the purchase of a 34% interest in the Neptune Gas Processing Plant in February 2013, this transaction represents Samchully’s second direct investment in the North American midstream sector. Samchully also has four investments in the North American upstream sector.

“We are pleased to announce the acquisition of CGS, which is a continuation of our focus on investing in North American energy infrastructure,” said DH Kim, Chief Investment Officer of Samchully AMC.

“We are very excited to find an opportunity in the Utica Shale, which we view as one of the premier basins in North America, and we are seeking opportunities to add value, including long-term commodity off-take contracts to the Korean and Asian markets and additional midstream infrastructure in the northeast,” continued Mr. Kim.

Tudor, Pickering, Holt & Co. acted as exclusive financial advisor to Samchully AMC and Clifford Chance acted as legal counsel.

Citadel Energy Acquires Over 130 Freshwater Sources; Expands Freshwater Operations in the Bakken to Over 150 Sources

(October 23, 2014) Citadel Energy Services, LLC, a leading freshwater provider and oilfield waste management company for US oil and gas companies, today announced it has made a large scale acquisition of more than 130 freshwater sources spanning McKenzie, Williams, Burke, Divide and Mountrail Counties in North Dakota.

The newly acquired sources are expected to be permitted for a combined 200 million barrels of water supply annually. The acquisition boosts the Company’s total freshwater sources to over 150 locations.

These new freshwater sources are located in the busiest counties of the Bakken Shale for oil drilling activity, and adds to the company’s existing water supply available for drilling operations to oil and gas companies in the region. Permits have already been issued for more than 55 million barrels annually and the remainder are in process with the state.

Stanton Dodson, Executive Chairman of Citadel Energy, commented, “This acquisition strengthens Citadel Energy’s position as one of the fastest-growing freshwater and oilfield waste management companies in the Bakken. Very little infrastructure is needed on Citadel’s part and these sites will immediately add to our bottom line.”

Following the acquisition, the Company also announced the launch of Citadel H2O, a Citadel Energy company. Operating as a freshwater provider, Citadel H2O is able to provide cost effective, reliable and consistent freshwater supply and transfer to oil producers and transportation companies, who utilize fresh water in the oilfield as well as ongoing well maintenance.

Brandon Knudson, General Manager of Citadel H2O, comments on the company’s unique and pioneering position, “Citadel H2O’s freshwater sites are all strategically located to minimize time and cost associated with moving water to a well site. With coverage in McKenzie, Williams, Burke, Divide and Mountrail Counties as well as sites on the Fort Berthold Reservation, Citadel H2O has more freshwater sites than any other provider in the region. We have also made it a priority to establish and maintain good relationships with landowners to ensure reliable access.”

Additionally, Citadel Energy has seven Saltwater Disposal facilities under development as well as emerging oilfield waste treatment capabilities. With plans to open more Saltwater Disposal facilities, Citadel Energy has created a stronghold in the Bakken Shale region in providing freshwater sources and oilfield waste management services.

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