Battlecat Energy Partners LP

FEES AND COMPENSATION
        In general, Battlecat receives a management fee from the Investment Vehicles, carried
interest from the Funds, and performance-based compensation from the Managed Accounts
pursuant to each Investment Vehicle’s Governing Documents or Investment Management
Agreement in connection with advisory services provided. The precise amount, the manner and
calculation and the manner and timing of payment of any such management fee, carried interest,
or performance-based compensation for each such Investment Vehicle are established by
Battlecat, as modified by negotiations with investors in the applicable Investment Vehicle, and
are set forth in such Investment Vehicle’s Governing Documents or Investment Management
Agreement provided to each investor prior to investment in such Investment Vehicle.
       Battlecat may in the future receive additional compensation in connection with
management and other services performed for investments of Investment Vehicles and such
additional compensation generally will offset in whole or in part the management fees otherwise
payable to Battlecat. Investors in an Investment Vehicle also bear certain expenses, as set forth in
the Governing Documents or Investment Management Agreement of such Investment Vehicle.
        Battlecat may receive compensation of the type referred to in the preceding paragraph on
behalf of or with respect to co-investors in an investment. The receipt of such compensation will
not reduce any management fee payable by any Fund(s) that have also invested in such
investment, and as a result a Fund will, in most cases, only benefit with respect to its allocable
portion of any such compensation and not the portion of any compensation that relates to such

co-investors. Additionally, as further described below under “Consultants” and in the applicable
Governing Documents of each Fund, Battlecat may retain certain Consultants (as defined below)
to provide consulting services to a Fund or its investments, including, without limitation,
strategic and operational advice. Such Consultants generally would receive compensation, which
may include, but is not limited to, fees in connection with transactions and other items detailed
herein, and any such compensation would not result in additional offsets to any management fee.
Other Information
         Battlecat is permitted to exempt certain investors in the Funds from payment of all or a
portion of management fees, carried interest, or performance-based compensation, including
Battlecat and any other person designated by Battlecat. Any such exemption from fees and/or
carried interest may be made by a direct exemption, a rebate by Battlecat and/or its affiliates, or
through other Funds which co-invest with a Fund. For example, in instances where a Battlecat
professional (or an affiliated entity thereof) invests in a Fund, such professional (or such
affiliated entity) generally will be exempt from payment of the management fee and carried
interest with respect to such Fund. Additionally, to the extent permitted by the relevant
Governing Documents, Battlecat has the right to permit investors, affiliated with Battlecat or
otherwise, to invest through vehicles that do not bear management fees, carried interest, or
performance-based compensation.
       The Funds generally invest, and anticipate continuing to invest, on a long-term basis.
Accordingly, investment advisory and other fees are expected to be paid, except as otherwise
described in the Governing Documents, over the term of the relevant Fund, and investors
generally are not permitted to withdraw or redeem interests in the Funds.
       Principals or other current or former employees of Battlecat generally receive a portion of
the management fee, carried interest or other compensation received by Battlecat or its affiliates.
        In addition to the management fee and carried interest payable or allocable to Battlecat,
each Fund bears certain expenses. As set forth more fully in the applicable Governing
Documents of each Fund, a Fund generally bears all other fees, costs, expenses, liabilities and
obligations relating to such Fund and/or its subsidiaries’ activities, business, portfolio projects or
actual or potential investments (to the extent not borne or reimbursed by a portfolio project or
potential portfolio project). Fund investors should carefully review the applicable Fund’s
Governing Documents to understand the expenses that will be borne by such Fund.
        As is typical for private equity funds, the Funds are likely to bear additional and greater
expenses, directly or indirectly, than many other pooled investment products, such as mutual
funds. To the extent brokerage fees are incurred, they will be incurred in accordance with the
general practices set forth in “Brokerage Practices.”
         In addition to the management fee and other compensation payable to Battlecat, each
Managed Account bears certain expenses related to Battlecat’s investment-related and other
activities with respect to such Managed Account as set forth in detail in each Managed
Account’s Investment Management Agreement.
       As described above, in certain circumstances, the relevant General Partner is expected to
permit certain investors to co-invest in Fund investments alongside one or more Funds, subject to
Battlecat’s related policies and the relevant Partnership Agreement(s) and/or Side Letter(s).
Where a co-invest vehicle is formed, such entity generally will bear expenses related to its

formation and operation, many of which are similar in nature to those borne by the Funds. In the
event that a transaction in which a co-investment was to be sought ultimately is not
consummated, all obligations, liabilities and out-of-pocket and/or breakup fees, costs and
expenses relating to such unconsummated transaction will be borne by the relevant Fund, and not
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TYPES OF CLIENTS

        Battlecat provides investment advice to the Investment Vehicles. The Funds may include
investment partnerships or other investment entities formed under domestic or foreign laws and
operated pursuant to an exemption from regulation under the Investment Company Act of 1940,
as amended. The investors participating in the Investment Vehicles may include individuals,
banks or thrift institutions, other investment entities, university endowments, sovereign wealth
funds, family offices, pension and profit-sharing plans, trusts, estates or charitable organizations
or other corporations or business entities and may include, directly or indirectly, principals or
other employees of Battlecat and its affiliates and members of their families, and Consultants or
other service providers retained by Battlecat.
        Each Fund generally has a minimum investment amount of $5 million for third-party
investors in the Funds, and fund interests are offered and sold solely to qualified purchasers or
qualified knowledgeable Battlecat personnel. Such minimum investment amounts may be
waived by Battlecat.
            METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS
General
        The General Partners have selected Battlecat Energy Partners to provide day-to-day
investment advisory services to each Investment Vehicle, subject to the General Partners’
supervision. Because the Battlecat entities share common owners and personnel, Battlecat’s
general investment methodology is described below. Fund investors should review a Fund’s
Governing Documents, and Managed Account investors should review such Managed Account’s
Investment Management Agreement, for further information regarding the investment strategies
specific to an Investment Vehicle. There can be no assurance that the Advisers will achieve the
investment objectives of an Investment Vehicle, and a loss of investment may be possible.
Investment and Operating Strategy
        The foundation of Battlecat’s investment philosophy and approach is to acquire
unconventional, under-stimulated producing wells primarily in the South Texas region that
Battlecat believes have significant development upside. The team will use its previous
experience working in the Eagle Ford to improve under-performing wells it believes will be
attractive targets to a wide range of potential buyers.
        Battlecat’s investment strategy will be based on: (i) market knowledge; (ii) long-term
relationships; (iii) geographic focus; (iv) a prudent, disciplined approach to investing; (v)
technological experience; (vi) operational best practices; and (vii) acquiring existing properties.
Risks of Investment
        Each Investment Vehicle and its investors bear the risk of loss that Battlecat’s investment
strategies entail. Fund investors should review the applicable Fund’s Governing Documents, and
Managed Account investors should review such Managed Account’s Investment Management
Agreement, for detailed information regarding the specific risks related to the applicable

Investment Vehicle. The risks involved with Battlecat’s investment strategies and with an
investment in an Investment Vehicle include, but are not limited to:
       General Investment Risks
        Business Risks. Each Investment Vehicle’s investment portfolio is expected to consist
primarily of privately held operating and non-operating oil and gas related assets, including oil
and gas reserves, leasehold interests, working interests, net profits interests, mineral interests and
royalty interests. Operating results for these types of investments during a specified period will
be difficult to predict. Such investments involve a high degree of business and financial risk that
can result in substantial losses.
        Concentration of Investments; Lack of Diversification. Each Investment Vehicle will
focus primarily on upstream investments in the energy industry. Although the relevant General
Partner will attempt to minimize risk, each Investment Vehicle’s actual returns will be subject to
numerous factors beyond the control of its General Partner, including natural causes,
governmental regulation, competing responses to population growth, economic development,
and increased urbanization, the successful implementation of measures to counter any of the
foregoing, whether by way of political will, the development of new technologies for that
purpose or otherwise, and consumer needs and preferences. In addition, an Investment Vehicle
may participate in a limited number of investments within the upstream sector of the energy
industry and, as a consequence, the aggregate returns to such Investment Vehicle may be
substantially adversely affected by the unfavorable performance of even a single investment. To
the extent an Investment Vehicle concentrates its investments in a particular producing basin,
geographic region or type of geological play, such investments will become more susceptible to
fluctuations in value resulting from adverse economic or business conditions with respect to such
producing basin, geographic region or type of geological play.
        Highly Competitive Market for Investment Opportunities Generally; Lack of Sufficient
Investment Opportunities. The business of identifying, structuring and completing private equity
transactions in the energy industry is highly competitive and competition is increasing. The
Investment Vehicles will encounter competition from other entities having similar investment
objectives. Potential competitors include other investment partnerships and corporations,
strategic industry acquirers and other financial investors. In addition, the availability of
investment opportunities generally will be subject to market conditions as well as, in some cases,
the prevailing regulatory or political climate. The General Partners expect that competition for
appropriate investment opportunities may increase, which also may require an Investment
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