Basin Oil and Gas Management LP

Item 5 - Fees and Compensation

The Adviser or its affiliates generally receive Management Fees and Carried Interest (each as defined below)
or similar performance-based remuneration from a Fund. Additionally, consistent with the Organizational
Documents of a Client, the Client typically bears certain out-of-pocket expenses incurred by the Adviser in
connection with the services provided to the Client and/or the portfolio investments. Below is a discussion
of how the Adviser is generally compensated in connection with providing advisory services to its Clients.
As described below in more detail, the Adviser may enter into different fee arrangements on a Client by
Client basis.

It is critical that investors and prospective investors refer to a Client’s Organizational Documents for a
complete understanding of how the Adviser and the applicable General Partner are compensated for advisory
services and what organizational and operational expenses are charged to the Client and ultimately borne by
investors. The information contained herein is a summary only and is qualified in its entirety by each Client’s
Organizational Documents. Investors and prospective investors are advised that they should consult with
their own legal, financial, tax, and other advisers when making any investment decision.

Management Fees

For its services to each Fund, the Adviser receives a management fee (the “Management Fee”) which is
based on a percentage of assets under management or a percentage of capital commitments. Prior to the end
of the investment period for each Fund, the Adviser receives a Management Fee based on a percentage
(generally 2%) of total capital commitments to the Funds. After the investment period, the Management Fee
with respect to the Funds is based on percentage (generally 1-2%) of assets under management or total capital
commitments to the Funds. Management Fees paid by a Fund may also be reduced by other fees or
compensation received by the Adviser or its affiliates that relate to such Fund’s activities and investments,
or by certain organizational or other expenses borne by such Fund, as described in more detail below.
Management Fees paid by a Fund are indirectly borne by investors in such Fund.

The annual Management Fee is generally paid quarterly in advance. Pursuant to the Fund’s Organizational
Documents, the Adviser may refund any pre-paid Management Fees by a Fund if the Advisory Agreement
with such Fund is terminated before the end of the billing period. Management Fee refunds are calculated
on a pro-rata basis for partial periods, if applicable.

The precise amount of, and the manner and calculation of, the Management Fees for each Fund are
established by the Adviser and are set forth in such Fund’s Organizational Documents received by each
investor prior to making investment in such Fund. The Management Fees and other fees and distributions
described herein are generally subject to modification, waiver, or reduction by the Adviser in its sole
discretion, both voluntarily and on a negotiated basis with selected investors via side letter and other
arrangements, which may not be disclosed to other investors in the same Fund. The fee structures described
herein may be modified from time to time. Fees differ from one Fund to another, as well as among investors
in the same Fund.

As more fully described below, the Adviser or its affiliates are permitted to charge Other Fees (as defined
below); however, in certain Funds, the Adviser’s Management Fee with respect to the Funds is reduced by
all or a portion of such fees paid to the Adviser, net of expenses. Fees earned by the Adviser, if any, in
connection with transactions not completed with respect to the Funds are to be paid first to offset expenses
associated with such transaction and, thereafter, to the Adviser and credited against the Management Fee. In
addition, in certain Funds, the Management Fee payable in any quarterly period shall be reduced by an
amount equal to the aggregate amount of any private placement or finders’ fee paid or reimbursed by the
Funds to placement agents, finders or other third parties performing similar services in connection with the
organization or funding of the Funds during any immediately preceding quarterly period. The amount and
manner of such reduction, if any, is set forth in the Advisory Agreement and/or Organizational Documents
of the applicable Fund. To the extent a reduction relates to more than one Fund, the Adviser shall allocate
the resulting Management Fee reduction among the applicable Fund(s) in proportion to their interest (or
prospective interest) in the portfolio investment.

Other Fees

Additionally, with respect to certain Clients and as more fully described in the applicable Clients’
Organizational Documents, the General Partners of the Clients, the Adviser, or any of the Principals have
the right to contract for and receive (i) financing fees, commitment fees, closing or other similar fees in
connection with investments made by the applicable Client, (ii) directors’ fees, monitoring fees, management
fees, advisory fees, investment banking fees, structuring fees, success or other similar fees in connection
with investments made by the applicable Client or from portfolio (whether paid in cash or in-kind) or (iii)
break-up or other similar fees as a result of the failure to consummate an investment by the applicable Client
(with the fees described in clauses (i) through (iii) being called “Other Fees”); provided, however, that a
specified portion of such Other Fees so received, net of applicable related expenses (without duplication)
are generally applied to reduce on a fully diluted dollar-for-dollar basis any future payment of the
Management Fee due.

The Adviser may also be paid fees of the type referred to in the preceding paragraph from, on behalf of, or
with respect to co-investors in an investment. It is expected that receipt of such fees would not reduce the
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Item 7 - Types of Clients

The Adviser provides investment advisory services to the Funds, which are pooled investment vehicles
organized as private funds, entities that are investment partnerships or other investment entities formed under
domestic or foreign laws and are exempt from registration under the Investment Company Act of 1940, as
amended. Generally, each investor in a Fund must be a “qualified purchaser” for Investment Company Act
purposes and a “qualified client” for Advisers Act purposes. However, certain Funds have accepted
“accredited investors” in the past, and the General Partner of a Fund has the discretion to admit such investors
in the future. Investors in the Clients generally include, among others, high net worth individuals, insurance
companies, pension and profit-sharing plans, trusts, estates, charitable organizations, university
endowments, corporations, limited partnerships and limited liability companies or other entities.

The minimum investment requirement for third-party investors in the Funds is generally $10,000,000,
though the General Partner of a Fund has the discretion to accept investments of lesser amounts.