VCT Energy Holdings LLC

Marine Terminal Financing Opportunity

Parkman Advice & Capital to the Energy Industry

Whaling

August 2023

CONFIDENTIAL
 Presentation Topics
Page
Executive Summary 1
Transaction Overview 9

Investment Considerations 12

VCT Overview 20

Industrial Growth and Nearshoring in Mexico 25

Business Plan 33

Financial Projections 41

Concluding Observations 46

Appendix 48

CONFIDENTIAL
 Confidentiality and Disclaimer
This presentation (the “Presentation”) is being furnished to you on a confidential basis by Parkman Whaling LLC (“Parkman Whaling”) in its capacity as
exclusive financial advisor to VCT Energy Holdings LLC (the “Company”) and its affiliates.

The Company is a newly-formed entity created to acquire and operate midstream energy storage and terminal assets in the Port of Brownsville, Texas (the
“Assets”), among other purposes. As a result, the Company has no prior operating history. This Presentation describes a potential investment opportunity in
the Company and its contemplated acquisition of the Assets (the “Transaction”).

This Presentation contains confidential and proprietary information, the disclosure or misuse of which could be harmful to the Company, as well as their
respective members, partners and affiliates. The information contained herein should be treated as confidential and treated as material, non-public
information, and may not be reproduced, used or disclosed in whole or in part by you to any other person or entity (including your advisers or representatives)
without the prior, written consent of the Company.

The information used to prepare this Presentation was provided by the Company or representatives or obtained from public sources. In preparing the
Presentation, Parkman Whaling relied upon, without assuming responsibility or liability for independent verification, the accuracy and completeness of all
information provided by the Company and its representatives or from public sources. Parkman Whaling LLC is not legal, regulatory, tax, or accounting experts
and has relied upon the Company or its advisers with respect to such issues, and nothing in this Presentation should be construed as tax, accounting or legal
advice. Parkman Whaling has further relied upon the assurances by management of the Company that they are unaware of any facts that would make the
information contained in this Presentation incomplete or misleading. Neither the Company nor Parkman Whaling assume any obligation to update or otherwise
revise this Presentation.

Furthermore, this Presentation contains financial analyses, forecasts and/or projections prepared by the Company that constitute forward-looking statements.
These forward-looking statements were prepared based on assumptions that reflect the best current available estimates and judgments of the Company’s
management as to the expected future results of operations and financial condition of the Assets. Forward-looking statements involve a number of risks,
uncertainties, or other factors beyond the Company’s control, which may cause material differences in actual results, performance, or other expectations. The
opinions, estimates, and analyses set forth herein reflect the Company’s current estimates as to the Assets and their future operations. The Company’s
assessments and estimates related to the Assets may change in the future or be incorrect.

This Presentation is not an offer to sell, or a solicitation of an offer to buy any securities or assets of the Company. Any future securities transaction in
connection with the Transaction will be made subject to the exemption from registration provided by Regulation D as promulgated in compliance with the
Securities Act of 1933, as amended, and other applicable SEC and FINRA guidelines, regulations and practices including, but not limited to, the review and
acknowledgement of receipt of materials and information made available by the Company.

Parkman Whaling LLC

August 2023

Securities offered through Parkman Whaling Securities LLC, Member FINRA/SIPC. Parkman Whaling Securities LLC is an affiliate of Parkman Whaling LLC.

CONFIDENTIAL
Executive Summary

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Energy Infrastructure Project for Petroleum Products Markets in South Texas and Mexico
 VCT Energy Holdings LLC (“VCT” or the “Company”) Historical Project Characteristics
has contracted to purchase certain recently constructed
petroleum product storage assets (the “Terminal”) at the
Storage Capacity (Bbls) 240,700
Port of Brownsville (the “Port”) and seeks capital to fund
the acquisition, to upgrade certain equipment at the
Terminal, and to expand operations (the “Transaction”).
Monthly Turnover 1.0x

 The Terminal primarily generates revenues by receiving

and storing liquid fuels products on behalf of its
customers (e.g., refiners, lubricant suppliers, and energy 2022 EBITDA ($MM) $1.7

marketers such as Chemlube, Ergon, and HF Sinclair).

Pro Forma Project Characteristics
 In addition to its fuel storage services, VCT generates
revenue by providing ancillary terminalling services such Storage Capacity (Bbls) 240,700
as tank-to-tank transfers, blending, and truck and rail
discharge and loading services.
2023E EBITDA ($MM) $2.1

 The Company seeks a financial partner to provide up to

$60 million to fund the Transaction (~$20 MM) and to Pro Forma Monthly Turnover 1.0x – 3.0x
provide additional capital to fund other organic growth
and acquisition opportunities (~$40 MM) in and around
the Terminal. 2024E EBITDA ($MM) $4.2 – $10.1

CONFIDENTIAL 1 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Terminal Locator Map and Project Attributes

Port of Brownsville

Terminal Area

Houston

Brownsville

Unique advantages of Port of Brownsville Severe fuel products shortage in Northern Mexico
Larger truck cargos and close proximity to Mexico Energy policy has created a supply shortage while demand grows

Multimodal access provides flexibility for services Service realignment facilitates asset optimization
Access to and control of rail, truck and waterborne logistics More efficient meters and throughput increase turnover up to 3x

Connected to Intercoastal Waterway Pricing optimization enhances revenue

Secure access to reliable and low-cost fuel products and lubes Material revenue impact using market prices for ancillary services

CONFIDENTIAL 2 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Summary of Process
 In connection with the Transaction, VCT has completed several initial steps to advance the Transaction to closing, key
among them:
— Executing a Letter of Intent (the “LOI”) with Texas KLM, LLC (the “Seller”), which provides VCT with exclusivity to
purchase the assets
— Submitting a deposit that will be netted against the purchase price
— Commencing operational, financial, environmental, and technical due diligence
— Engaging WL Contracting to prepare an engineering report regarding the design and re-piping of the facility to
accommodate higher turnover and a more diverse array of fuels to be handled at the site
 In order to finance the Transaction, VCT has engaged Parkman Whaling LLC (“Parkman Whaling”) as exclusive
financial advisor to raise debt and/or equity capital that will be deployed to fund: (i) the acquisition of the assets, (ii) the
capital required to upgrade the facility to accommodate higher turnover and storage of a broader array of fuel products
(the “Facility Upgrade”), and (iii) potential expansion opportunities identified by VCT in and around the Port

Key Process Dates Contact Information

 Financing proposals due around late summer 2023 PARKMAN WHALING LLC
600 Travis, Suite 600
 Contemplated closing September 2023 Houston, Texas 77002
(713) 333-8400

 Bruce Campbell: [email protected]

 George Morris: gmorris@parkmanwhaling

CONFIDENTIAL 3 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Transaction Overview

 29 newly constructed storage tanks ranging in size from 1,618 barrels to 15,100 barrels
 Total storage capacity of 240,700 barrels
Assets Acquired
 Five-acre terminal lease with the Port of Brownsville
 2023E pro forma EBITDA of ~$2.1 million

Seller  Texas KLM, LLC: an independently-owned lubricants marketing & trading firm

 Key refining and lube manufacturing customers: Bardahl, Ergon, and HF Sinclair
Customers and
 Key refining and lube distribution customers: Chemlube and Superbasiscos
Contracts
 Majority of capacity contracted for duration of 2023 with staggered expirations

 $14,250,000 for the purchase price of the assets

Contemplated  $4,199,000 for capital upgrades and refurbishments
Transaction  $1,460,000 for transaction and legal expenses
Costs  $1,591,000 for working capital and other contingency
 $21,500,000 total capital

CONFIDENTIAL 4 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Investment Characteristics – Service Growing Fuel Products Demand in Mexico
 Fuel products terminal at the growing Port of Brownsville U.S. Petroleum Products Exports to Mexico (Monthly Average)
that will service the growing industrial sector in Mexico MBbls/d

1,400
 Dislocated energy supply in Mexico supports continued
growth of U.S. petroleum product exports 1,200

1,000

 Avoids onsite political risk associated with direct 800

investments in Mexico while benefitting from the region’s
growing fuel products demand 600

400

200

CONFIDENTIAL 5 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Investment Characteristics – Optimize Asset Turnover and Pricing of Services
 Infrastructure play with equity returns Historical and Estimated EBITDA ($ ‘000)2

$12,000

 Base case lubricants storage business provides margin

of safety for investors $10,000

$8,000
 Facility upgrade plan and service pricing optimization
doubles cash flow once fuel tanks turn 2x/month
$6,000

 Contemplated pre-tax IRRs to the equity investor range $4,000

from 60% to 75%, assuming two turns per month and a
sale at the end of 20261
$2,000

 Identified expansion opportunities targeting total storage

$0
volumes of 850,000 barrels 2022 2023 2024 2025 2026
Actual 1 Turn 2 Turns 3 Turns

1) See Transaction Overview section for contemplated management earn‐in structure

2) 2022 EBITDA is from Seller; 2023E EBITDA is pro forma with 1H 23 derived from Seller’s 1Q 23 results semi‐annualized and 2H 23 is from VCT projections assuming only lubricant volumes.

CONFIDENTIAL 6 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Executive Summary
Summary Plan for Facility Upgrades
Lubricants facility with solid core, but not intended for high volume (turnover is 1x/month)
Spending $5 mm to upgrade facility could increase turnover up to 3.0x per month

Upgrade Impact

De-bottlenecked piping Shortens loading times, increasing capacity and improving customer service

Tank meters More accurate measurements and invoicing

Instrumentation & Automation (e.g., SCADA) Improves efficiency via remote monitoring and control of equipment, inventory and data

Computerized valves Improves safety and reduces operational risk

Accounting / ERP System Improves accuracy and speed of data analysis for decision making

Expansion Opportunity

 Evaluating an opportunity to acquire or lease similar-sized lot adjacent to the northern portion of the facility
 Targeting 600,000 barrels of storage (twelve 50,000 barrel tanks)
 Tie-in to adjacent products supply pipeline
 $40 million contemplated costs for up to 600,000 barrels of storage and land lease (not included in sources and uses
but can be included as part of an upsized commitment)

CONFIDENTIAL 7 PARKMAN WHALING LLC

Transaction Overview

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Transaction Overview
Assets Acquired and Upgrade Plan1
S to ra g e T a nk s
Tank Size (bbl) Tanks Capacity
15,100 10 151,000
6,279 10 62,790
3,676 6 22,056
1,618 3 4,854
Total 29 240,700
 240,700 barrels of storage
2022 E B IT D A ($ ' 000)
Revenue:
 Four-bay truck loadout (LACTs)
3rd Party Terminal Storage $ 2,819  Three rail spurs
Other Operations 185
Total Revenue $ 3,004  Access to two public, deepwater docks
Expenses (1,686)
Plus: Interest Exp. 398
E B IT D A $ 1,716

Co nv e rs io n B ud g e t ($ ' 000)
Site Work $ 350
Electrical 220
Instrumentation & Automation 838
Painting / Rust Proofing / Steel 466
Piping 800
Meters 250
Demolition/Construction Equipment 250
Sump Pumps / Base 75
Engineering & Construction Fees 450
Contingency 500
Total $ 4,199

P o s t-Co nv e rs io n E B IT D A E s t. ($ ' 000)

1 Turn 2 Turns 3 Turns  $14.25 million to acquire the assets
2024 $4,160 $7,072 $10,095
2025 $4,161 $7,256 $10,465  $4.2 million to implement facility upgrades

1) Conversion budget preliminary, engineering ongoing

CONFIDENTIAL 9 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Transaction Overview
Contemplated Capital Structure and Sources and Uses1
 Contemplated capital structure: So u rce s ($ ' 0 0 0 )
— Debt financing: term loan for ~ 60% of the total Debt
capital required Term Loan $14,000
Eq u i ty
— Equity financing: ~ 40% of the total capital required
Common Equity 7,500
To ta l So u rce s $ 2 1 ,5 0 0
 Proposed management earn-in structure
U se s ($ ' 0 0 0 )
— 10% of common equity at closing
Acq. Price $14,250
— 33.3% of common equity after delivering 2.0x cash- Capex Budget:
on-cash to equity investors Site Work / Move Office / New Entrance $350
— 50% of common equity after delivering 3.0x cash-on- Electrical 220
cash to equity investors Instrumentation & Automation 838
Painting / Rust Proofing / Steel Structure 466
Piping 800
 Alternatives: the Company will consider alternatives to
Meters 250
the contemplated structure above, with a preference for
Demolition/Construction Equipment & Rent 250
structured equity, including:
Sump Pumps / Base 75
— Term loan with warrants Engineering 200
— Convertible preferred debt Construction Mgmt / Construction Fee 250
Contingency 500
— Preferred equity
Total Capex $4,199
— Preferred equity with warrants
Transaction Expenses $1,460
— Other forms of structured equity Working Capital/Other Contingency 1,591
To ta l U se s $ 2 1 ,5 0 0
1) Conversion budget preliminary, engineering ongoing

CONFIDENTIAL 10 PARKMAN WHALING LLC

Investment Considerations

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
Summary Points

Facility Upgrades Optimize Cash Flow Undersupplied Market in Northern Mexico

I. Installing more efficient meters and new piping I. Chronically undersupplied Mexican fuels market
can increase turnover up to 3x is currently supplied by inefficient and unreliable
refineries requiring imports to meet demand
II. Implementing market-based pricing for ancillary
services materially enhances revenue II. Cadereyta Refinery in Nuevo Leon routinely
shuts down for maintenance and produces off-
III. Upgrades will expand fuels service, which
spec fuels
increases cash flow and improves customer
service via incentive rates and higher turnover III. Metropolitan Monterey and Northern Mexico
industrial growth need reliable product supply
IV. Lubricants will maintain baseload cash flow

Multi-modal Access / Multi-product Service Unique Advantages of Port of Brownsville

I. Lube and fuel products can be received by I. Easily accessible, cost-effective barge and ship
barge, ship, rail, and truck supply marine port
II. Once fuel products pipeline connected, facility II. Premier border location for fuel trucks with
can receive products directly direct access to short haul inland Mexican
markets inaccessible by water
III. Products delivered by ship, barge, rail and truck
III. Pipeline supply within and into Mexico suffers
IV. Tank configuration facilitates diverse product
from chronic hot tapping and fuel theft
slate, including food-grade liquids, gasolines,
diesel, jet fuel, and renewable fuels

CONFIDENTIAL 12 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
Facility Realignment Will Optimize Cash Flow
Stable Cash Flow with Meaningful Upside

 Legacy lubricants terminalling business provides cash flow foundation

 Reconfiguration of storage tanks to accommodate more diesel and other light products for higher turnover
 Shortage of diesel and other fuels in the growing industrial sector in Northern Mexico and metropolitan Monterrey area
 Facility improvements to facilitate volume growth and differentiated service strategy, including high-speed pumps, tank
meters, SCADA system, computerized valves, and other value-accretive modifications
 KLM does not currently use its truck LACTs or transloading opportunities as a profit center, and VCT plans to expand its
service offerings and associated fees to include tank-to-tank services, truck loading services, railcar discharge and
loading services, and transloading

Contracts with Established Lubricants Suppliers and Fuel Marketers Who Can Support Growth

Total Capacity Percent of

Customer # of tanks (Bbls) Capacity Lease End
Ergon 2 30,200 13% 3/1/2024
HFS 1 15,100 6% 4/1/2024
Bardahl 5 35,010 15% 2/1/2024
Chemlube 2 12,558 5% MtM
KLM 10 58,640 24% 12/31/2023
Other 9 89,192 37% 1/31/2024

CONFIDENTIAL 13 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
Multimodal Access and Terminal Upgrades

2 3 4

1
6

1 New entry avoids truck turnaround and de-bottlenecks site congestion 4 Trucks to exit at the south end of the facility
2 Automated electronic metering at the truck rack 5 Three rail spurs
3 Scales to be eliminated / offices to be relocated 6 Access to deepwater docks via pipeline

CONFIDENTIAL 14 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
Underperforming Refineries in Mexico Contribute to Supply Shortages

• Nuevo Leon, the destination for Refinery Capacity 2022 Crude 2022
most of the fuels that will be Oil Runs Utilization
stored and exported from VCT’s
terminal, had the second largest
Mexico’s Refineries Cadereyta 275,000 118,764 43.2%

share of foreign direct Madero 190,000 97,982 51.6%

investment in Mexico in 2022 Salamanca 245,000 119,000 52.9%
• However, the only refinery in the
Tula 315,000 144,000 57.1%
region, Cadereyta, operated at
43% utilization Minatitlán 285,000 129,000 39.2%
• Cadereyta routinely shuts down Salina Cruz 330,000 165,000 53.9%
for maintenance and frequently
Total 1,640,000 772,200 49.7%
produces off-spec fuels
Cadereyta
• Unreliability and supply 275,000 b/d
shortages support the
investment thesis of a
continued, growing need for Madero
reliable product imports 190,000 b/d

Salamanca
245,000 b/d

Tula
315,000 b/d

Minatitlan
285,000 b/d
Salina Cruz
330,000 b/d

CONFIDENTIAL 15 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
Key Advantages of the Port of Brownsville

Houston

Port of Calhoun

Corpus Christi
4

The Port is the closest deepwater port to Nuevo Leon and a

top-three trade zone in the U.S., with six liquid cargo docks,
3 1
Monterrey 1 13 cargo docks, and 42 ft of current ship channel depth and
2 Congressional authorization to deepen to 52 ft.
5 4
The Port is geared toward exports to Mexico, compared to
2
Brownsville other border entry points geared for imports to the U.S.

Access to Class 1 rail service to and from Mexico and all of The Port is within a 40-mile special corridor in Texas (green
North America. Kansas City Southern de México services highlighted area) which permits trucks that cross the border in
4 3
operations south of the border, and Union Pacific and BNSF either direction to load to the higher legal transport limits of
Railway service the northern routes. Mexico (~14,500 gallons versus ~8,000-gallons domestic).

The Port is ~100 miles closer to Monterrey than the nearest

Mexican port; thus, a critical depot for the supply of fuels
5
going to industrial Northern Mexico and Monterrey, which has
a metropolitan population of nearly five million.

CONFIDENTIAL 16 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
U.S. Gulf Coast Refining Sector: World Class Efficiency and Long-Term Export Growth
 The United States has the most complex and efficient U.S. Exports of Finished Petroleum Products2
refining industry in the world
MBbls/d
3,500
 Facilities along the Gulf Coast currently account for 54%
of all US domestic refining capacity
3,000

 The Gulf Coast (PADD1 3) is the largest domestic 2,500

supplier of transportation fuels and has been the source
of much of the growth of petroleum products in the past 2,000
fifteen years
1,500
 In PADD 3, regional consumption is less than one-third
of in-region production, hence Texas and Louisiana Gulf 1,000
Coast refiners are built to export transportation fuels to
Mexico and other undersupplied domestic and
500
international markets

0
1/1/08
1/1/09
1/1/10
1/1/11
1/1/12
1/1/13
1/1/14
1/1/15
1/1/16
1/1/17
1/1/18
1/1/19
1/1/20
1/1/21
1/1/22
1/1/23
 The terminal in Brownsville is uniquely positioned to
maximize the locational and economic advantages of the
U.S. (particularly Texas) energy sector to sell into the
undersupplied Mexican energy PADD 3 PADDs 1,2,4 & 5

1) The Petroleum Administration for Defense Districts (PADDs) are geographic aggregations of the 50 States and the District of Columbia into five districts: PADD 1 is the East Coast, PADD 2 the Midwest, PADD 3 the
Gulf Coast, PADD 4 the Rocky Mountain Region, and PADD 5 the West Coast. Due to its large population, PADD 1 is further divided into sub‐PADDs, with PADD 1A as New England, PADD 1B the Central Atlantic
States, and PADD 1C comprising the Lower Atlantic States. There are two additional PADDs (PADDs VI and VII) that encompass U.S. Territories.
2) Source: EIA

CONFIDENTIAL 17 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Investment Considerations
17 Refineries Along the Texas Gulf Coast Provide Low-Cost, Reliable Supply

The Port of Brownsville is

directly connected to the
NuStar products pipeline
and three refineries are
within ~150 nautical miles

CONFIDENTIAL 18 PARKMAN WHALING LLC

VCT Overview

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

VCT Overview
Summary of Business
 VCT Energy Holdings, LLC (“VCT”) is a holding company focused on energy infrastructure and terminalling and seeks
to acquire certain assets and operations (the “Terminal) owned by the Seller in Brownsville, Texas, including 240,700
barrels of petroleum product storage tanks, truck LACTs, and other assets critical to the loading, storage and distribution
of petroleum products.

 The Terminal receives products on behalf of customers (e.g., lubricant suppliers and energy marketers) from marine
vessels (e.g., ships and barges), trucks, and railcars (a direct connection to a third-party fuel products pipeline system is
contemplated in VCT’s expansion plans).

 VCT will handle lubricants and refined petroleum products, and potentially chemicals, naphtha, ethanol, methanol, and
other green energy products (collectively, “liquid energy products”) on behalf of, and provide integrated terminalling
services to, customers engaged in the distribution and marketing of liquid energy products, the bulk of which will be
moved by VCT’s customers from the terminal to consumers in South Texas and Northern Mexico.

 Subsequent to closing the acquisition, VCT will implement a facility upgrade to improve efficiency and customer service
(e.g., more accurate inventory tracking, faster billing, customer support) at the terminal and reduce operational costs.

CONFIDENTIAL 20 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

VCT Overview
Management Team with Extensive Marine Terminalling Experience
The VCT executive team has Vladimir Groysman, Co-Managing Partner
extensive experience with
terminal development,  Mr. Groysman is the CEO of Freedom Fuels & Commodities (“Freedom”), which he joined in 2016,
operations and petroleum bringing his experience in physical trading of commodities by rail across the US and Mexico.
product marketing. Vladimir led the firm in its initial years of rapid growth and manages the growing team as the
company expands into new regions. Freedom engages in physical supply and marketing of ethanol,
Instrumental in conceiving, methanol, NGLs, and various chemical stocks. Prior to Freedom, Mr. Groysman served in various
building and sourcing logistics, trading and business development functions for the Redwood Group, Tricon International,
investors for 1.6 mmbbls of and Trafigura. Mr. Groysman holds a BS in Business Administration from Boston University.
storage capacity in and
around the Port of Calhoun. Cole Yeager, Co-Managing Partner
 Mr. Yeager is the principal of Sierra Basin Energy and has 15 years of experience in trading and
VCT’s management knows the managing both physical and financial commodity books for various international oil companies. This
Brownsville terminalling experience covers domestic biofuels, NGLs, refined products blending, specialty chemicals, and
market very well, having crude oil. Mr. Yeager founded Sierra Basin Energy in 2016 with a focus on 3rd party trading/risk
actively leased storage management and project development. Mr. Yeager holds a BS in Economics from the University of
capacity and marketed fuels Nevada.
from the Port.
Todd Edwards, Advisor
As a customer of the Seller  Mr. Edwards has established and led multiple companies specialized in refined petroleum products,
and its competing terminals, trading, real estate development, and terminal storage and logistics. Mr. Edwards has developed,
VCT management has a clear acquired and constructed millions of square feet of real estate, including crude oil export terminals,
understanding of the types of aluminum plants, medical office buildings, parking garages, retail restaurants, airport terminals,
services customers want, and international bus stations, and major industrial and urban residential developments in the United
the value they see in these States and Mexico.
services.

CONFIDENTIAL 21 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

VCT Overview
Contemplated Organizational Chart

VCT Co-Managing VCT Co-Managing

Partner Partner

Controller Terminal Manager Compliance Manager

Accountant Operations Team 1

Accountant Operations Team 1

Accountant Operations Team 1

Office Admin Operations Team 2

Office Admin Operations Team 2

Operations Team 2

VCT Employee Operations Teams perform the following tasks, among others: tank gauging, sample collection/labeling/storage, railcar
gauging, tank-to-tank transfers, barge-to-tank transfers, railcar-tank transfers, railcar-truck transfers, tank-truck transfers,
Contract Employee
yard maintenance (e.g., mechanical, electrical, landscaping/drainage, welding, general repairs)

CONFIDENTIAL 22 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

VCT Overview
ESG Principles
ENVIRONMENTAL
 We are focused on being an environmentally conscious operator that loads, stores and delivers safely and reliably the
fuels that are critical to our terminalling business.
 We are committed to excellence in safety and place a priority on our employees, the community, and the environment.
 We aim to protect the diverse ecosystems within the footprint of our operations and to minimize the environmental
impact of our operations on the sea, land, and air.

SOCIAL
 We promote continuous improvement and strive to maintain an accident-free, incident-free workplace.
 We provide a supportive work environment for our employees, build collaborative relationships with safety and
emergency response agencies, and contribute to stable economic growth to help our local communities thrive.
 We are committed to the long-term success and growth of the Port of Brownsville.

GOVERNANCE
 Acting with integrity is the responsibility of each board member, executive, and employee.
 We are accountable for our reputation, business practices and performance, and strive to maintain public confidence
and trust as we help to meet the energy demands of our customers.
 We aim to instill governance structures that ensure sound and ethical business practices.

CONFIDENTIAL 23 PARKMAN WHALING LLC

Industrial Growth and Nearshoring in Mexico

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

Fundamentals of Northern Mexico Industrial Renaissance1,2
 Nearshoring, the shift to bring supply chains and manufacturing closer to the U.S., has grown as U.S.-China tensions
and the pandemic-driven distribution crisis forced businesses to give priority to supply-chain resiliency over the cost-
cutting that once sent that production to Asia, particularly China

 Nearshoring presents Mexico with a timely opportunity to revitalize its industrial sector

 At the January 2023 North American Leaders Summit, the U.S., Mexico and Canada agreed to relocate 25 percent of
Asian imports to North America, adding up to 2 percent GDP growth to Mexico

 According to financial analysts, over the next decade, between $60 billion and $150 billion of direct investments could
flow into Mexico as part of the efforts to move production closer to consumption centers.

 In 2022, $30 billion in investments into Mexico have been allocated in strategic sectors, such as semiconductors
manufacturing and advanced packaging, critical minerals mining, batteries, electric vehicles, logistics, and medical
supplies.

 Indirectly supporting the industrial nearshoring thesis is the pullback by several bulge-bracket Wall Street banks (e.g.,
J.P. Morgan, Goldman Sachs and Morgan Stanley) for expansion plans into China based on geopolitical risks and a
deteriorating investment climate in China for foreign direct investors.3

1) Private Investors Looking to Capitalize on Nearshoring Trends Turn to Mexico, Wall Street Journal, April 27, 2023
2) Mexico at the crossroads: The golden opportunity of nearshoring and energy policy as its Achilles’ heel under USMCA, Lourdes Melgar, Brookings Institute, www.brookings.edu
3) Wall Street’s Biggest Banks Face a Harsh Reality Check in China, Bloomberg, May 16, 2023

CONFIDENTIAL 25 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

Mexican Industrial Production as of January 20231

10 Federal reserve Bank of Dallas, https://www.dallasfed.org/research/update/mex/2023/2302

CONFIDENTIAL 26 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

2022 Foreign Direct Investment in Mexico ($US)

• Nuevo Leon had the

second largest share of
FDI in Mexico in 2022
• However, the only
refinery in the region,
Cadereyta, refined ~120
mb/d in 2022, implying
43% utilization
• Cadereyta routinely
shuts down for
maintenance and
produces off-spec fuels

CONFIDENTIAL 27 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

U.S. Product Exports to Mexico vs Total Product Imports to Mexico1
MBbls/d
1,500

1,000

500

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

U.S. Product Exports to Mexico Total Mexico Product Imports

1) U.S. Product Exports to Mexico from EIA; Total Mexico Product Imports from PEMEX and consist of refined products and petrochemicals; 2018 – 2022 Mexico Product Imports adjusted for display purposes

CONFIDENTIAL 28 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

Mexico Product Consumption and Petroleum Product Imports to Mexico
PEMEX Refined Products Production Selected U.S. Petroleum Product Exports to Mexico

MBbls/d MBbls/d
1,600 900

1,400 800

700
1,200
600
1,000
500
800
400
600
300
400
200

200 100

0 0
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021

US Lubricants US Finished Motor Gasoline

LPG Gasolines Kerosenes Diesel Fuel Oil Others
US Distillate Fuel Oil

1) Refined Products from PEMEX, Others includes asphalts, light cycle oil, lubricants, paraffins, greases, aroflex 1‐2, vacuum gasoil, furfural extract, coke, and dry gas; U.S. Product Exports to Mexico from EIA

CONFIDENTIAL 29 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

Historical and Projected Refined Product and Lube Demand in Mexico

 Steady, albeit modest, growth projected for Mexico refined product demand forecast
refined products demand in Mexico 1,800

1,600
 “Whoever takes office in 2024 is going to have
to deal with some serious deficiencies in the 1,400

energy sector.”1

Thousand b/d
1,200

1,000
 Even with modest growth, supply shortages
likely to persist given the historical supply 800
dislocations in the Mexican energy sector
600

 In the lubricants sector, U.S. demand for Group 400

1 base oils continues to decline, forcing greater
volumes into Mexico 200

0
2019 2020 2021 2022 2023 2024 2025 2030 2035 2040 2045 2050
 Lube oil demand in Mexico is projected to grow
by ~3.5% per year to 20262 Other Residual fuel oil Gasoil/diesel Jet/Kero Gasoline Naphtha
Source: S&P Global Commodity Insights, formerly IHS Markit © 2022 S&P Global

1) Mexico Sees Its Energy Future In Fossil Fuels, Not renewables, The New York Times, May 18, 2022
2) Mordor Intelligence, Industry Reports

CONFIDENTIAL 30 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Industrial Growth and Nearshoring in Mexico

Leveraging the Port of Brownsville and Its Economic Growth
 The Port of Brownsville is a deepwater seaport in Brownsville – Harlingen Business-Cycle Index1
Brownsville at the southernmost tip of Texas 400
 The Business-Cycle Index1 shown on the right and
calculated by the Federal Reserve Bank of Dallas 350
demonstrates the steady, long-term economic growth
profile of the Brownsville area
300
 Underdeveloped relative to Houston and Corpus, thus
limited competition for petroleum product storage
250
 Proximity to Mexico, Latin America’s second-largest
economy, uniquely positions the Port as the nation’s key
transshipment gateway delivering goods and 200
commodities to nearby multinational manufacturing
centers on both sides of the border 150
 Nearby Monterrey is a major industrial center in northern
Mexico with a metropolitan population of nearly five
100
million and home to dozens of commonly recognized
international corporations October 1980 = 100
50
 Within the M-10 and M-69 Marine Highway corridors,
providing shippers economical options for transporting
cargo with service routes to the Port along designated 0
marine highways and the U.S. Intercoastal Waterway
Oct-80
Oct-83
Oct-86
Oct-89
Oct-92
Oct-95
Oct-98
Oct-01
Oct-04
Oct-07
Oct-10
Oct-13
Oct-16
Oct-19
Oct-22
1) Federal Reserve Bank of Dallas, Metro Business Cycle Index; the index is constructed based on the aggregated movements in the local area unemployment rate, nonagricultural employment, inflation‐adjusted
wages, and inflation‐adjusted retail sales. The weights of the components are statistically optimized for each metropolitan area in order to best capture the underlying cyclical movements in the local area
economy. The long‐term trend growth of the indexes through 2000 is calculated using growth in annual real metro personal income. Beginning in 2001, long‐term trend growth is calculated using real metro GDP;
https://www.dallasfed.org/research/econdata/mbci

CONFIDENTIAL 31 PARKMAN WHALING LLC

Business Plan

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Business Model – Operate Liquids Terminal that Supplies Northern Mexico

Revenue Streams
 Throughput agreements
 Ancillary services
 Tank rent and turns
 Tank to tank
 Incremental meter cart
 Truck to tank
 Truck loading
 Rail discharge and loading

1 2 3 4

Lubricants, diesel and other VCT customers offload fuel

Products delivered to VCT’s Revenues generated from
petroleum and renewable products and lubes for
Brownsville terminal via products stored, handled
fuels contracted for delivery delivery to end users in
ship, barge, truck or rail and offloaded
to VCT Texas and Mexico

CONFIDENTIAL 33 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Preliminary KLM Terminal Revamp Budget

Description Cost
Site Work / Move Office / New Entrance $350,000
Electrical 220,000
Instrumentation & Automation 838,000
Painting / Rust Proofing / Steel Structure 466,000
Piping 800,000
Meters 250,000
Demolition/Construction Equipment & Rent 250,000
Sump Pumps / Base 75,000
Sub-total $3,249,000
Engineering 200,000
Construction Management / Construction Fee 250,000
Contingency 500,000
Total $4,199,000

CONFIDENTIAL 34 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Preliminary Timeline for Terminal Upgrade Capital Expenditures
$5,000

$4,000

$3,000 ~$1.0 mm to order

pipes and meters;
equipment ordered
shortly after closing

$2,000
Approximately seven
weeks and $3.1 mm
for facility upgrades

No additional capital
$1,000
spent until pipes and
meters delivered

$0
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7

CONFIDENTIAL 35 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Terminal Locator Map

CONFIDENTIAL 36 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Permits in Place
 Texas Stormwater Permit

 EPA Response Plan

 EPA Operations Plan

 DHS Facility Security Plan

 USCG Response Plan

 USCG Operations Plan

 Additional permits may be required if VCT stores lighter products

CONFIDENTIAL 37 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Port of Brownsville Competitor Overview

Bluewing

KLM

TransMontaigne

Inter Lube Motus

Source: Parkman Whaling , Cameron County Appraisal District, EPA, IRS, Enverus, HIFLD

CONFIDENTIAL 38 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Business Plan
Expansion Opportunities
I. Land purchase/lease and development of 300,000 – 600,000 barrels of storage on an adjacent plot to the north of
reconfigured KLM entrance – would increase total storage capacity to approximately 850,000 barrels

a) Engineering required for fuels tanks buildout

b) Engineering required for NuStar pipeline interconnect

c) Contemplated capital for 600,000-barrel expansion estimated to be $$40 million

II. Large lot lease on the southern side of the Brownsville ship channel

III. M&A transaction with a logistical terminal nearby with legacy OFS operations for deepwater GOM activity

CONFIDENTIAL 39 PARKMAN WHALING LLC

Financial Projections

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Financial Projections
Base Case – One Turn per Month1
($M unless otherwise denoted) Pro Forma Projections
2022A 2023 1H 2023 2H 2024 2025 2026 2027
Operating Data and Revenues
Diesel Throughput (Mbbl) - - - 2,410 2,565 2,565 2,565
Lubricant Throughput (Mbbl) 2,144 784 1,444 479 323 323 323
Diesel Throughput Fees ($/bbl) - - - $1.50 $1.50 $1.50 $1.50
Lubricant Throughput Fees ($/bbl) $1.31 $1.37 $1.15 $1.37 $1.40 $1.40 $1.40
Fuel Storage Revenues $2,819 $1,073 $1,660 $4,268 $4,300 $4,300 $4,300
Transloading Fees 86 121 513 1,108 1,108 1,108 1,108
Other Storage and Terminalling Fees 99 85 333 720 720 720 720
T otal Revenues $3,004 $1,279 $2,506 $6,097 $6,129 $6,129 $6,129
Storage and Terminalling Operating Expenses
Labor (444) (228) (223) (453) (462) (471) (481)
Utilities (105) (62) (53) (107) (109) (111) (113)
Ongoing Maintenance and Repair (112) (48) (56) (114) (116) (118) (121)
Insurance (206) (18) (104) (210) (215) (219) (223)
Property Taxes (154) (0) (154) (157) (160) (163) (166)
Steaming & Other Consumables (267) (149) (134) (68) (70) (71) (72)
T otal Operating Expenses (1,288) (504) (723) (1,108) (1,131) (1,154) ( 1,177)
Operating Margin $1,716 $775 $1,783 $4,988 $4,998 $4,975 $4,952
Corporate Expenses (411) (829) (837) (845) (854)
EBIT DA $1,716 $775 $1,371 $4,160 $4,161 $4,130 $4,098
Debt Service - - - (1,655) (1,655) (1,655) (1,655)
Maintenance Capex - - (125) (350) (350) (150) (150)
Pre-Tax Free Cash Flow $1,716 $775 $1,246 $2,154 $2,155 $2,324 $2,292

Transaction Sources and Uses Debt Schedule

New Term Loan $13,779 Cash Interest - (1,136) (1,093) (1,046) (996)
New Equity $9,186 PIK Interest 656 - - - -
Asset Purchase Price & Transaction Fees $(17,706) Principal Payments - (519) (562) (609) (660)
Terminal Upgrade Capital $(5,259) Debt Balance (End of Year) 14,435 13,916 13,402 12,849 12,254
Debt Service Coverage 2.5x 2.5x 2.5x 2.5x

1) assumes originally contemplated capital structure and effective date of 7/1/2023

CONFIDENTIAL 41 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Financial Projections
Growth Case – Two Turns per Month1
($M unless otherwise denoted) Pro Forma Projections
2022A 2023 1H 2023 2H 2024 2025 2026 2027
Operating Data and Revenues
Diesel Throughput (Mbbl) - - - 4,819 5,131 5,131 5,131
Lubricant Throughput (Mbbl) 2,144 784 1,444 794 646 646 646
Diesel Throughput Fees ($/bbl) - - - $1.25 $1.25 $1.25 $1.25
Lubricant Throughput Fees ($/bbl) $1.31 $1.37 $1.15 $1.22 $1.20 $1.20 $1.20
Fuel Storage Revenues $2,819 $1,073 $1,660 $6,994 $7,189 $7,189 $7,189
Transloading Fees 86 121 513 1,517 1,542 1,542 1,542
Other Storage and Terminalling Fees 99 85 333 720 720 720 720
T otal Revenues $3,004 $1,279 $2,506 $9,231 $9,450 $9,450 $9,450
Storage and Terminalling Operating Expenses
Labor (444) (228) (223) (543) (554) (566) (577)
Utilities (105) (62) (53) (128) (131) (133) (136)
Ongoing Maintenance and Repair (112) (48) (56) (136) (139) (142) (145)
Insurance (206) (18) (104) (252) (258) (263) (268)
Property Taxes (154) (0) (154) (188) (192) (196) (200)
Steaming & Other Consumables (267) (149) (134) (82) (83) (85) (87)
T otal Operating Expenses (1,288) (504) (723) (1,330) (1,357) (1,384) ( 1,412)
Operating Margin $1,716 $775 $1,783 $7,900 $8,093 $8,066 $8,038
Corporate Expenses (411) (829) (837) (845) (854)
EBIT DA $1,716 $775 $1,371 $7,072 $7,256 $7,221 $7,184
Debt Service - - - (1,655) (1,655) (1,655) (1,655)
Maintenance Capex - - (125) (350) (350) (150) (150)
Pre-Tax Free Cash Flow $1,716 $775 $1,246 $5,066 $5,251 $5,415 $5,379

Transaction Sources and Uses Debt Schedule

New Term Loan $13,779 Cash Interest - (1,136) (1,093) (1,046) (996)
New Equity $9,186 PIK Interest 656 - - - -
Asset Purchase Price & Transaction Fees $(17,706) Principal Payments - (519) (562) (609) (660)
Terminal Upgrade Capital $(5,259) Debt Balance (End of Year) 14,435 13,916 13,402 12,849 12,254
Debt Service Coverage 4.3x 4.4x 4.4x 4.3x

1) assumes originally contemplated capital structure and effective date of 7/1/2023

CONFIDENTIAL 42 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Financial Projections
Upside Case – Three Turns per Month1
($M unless otherwise denoted) Pro Forma Projections
2022A 2023 1H 2023 2H 2024 2025 2026 2027
Operating Data and Revenues
Diesel Throughput (Mbbl) - - - 7,229 7,696 7,696 7,696
Lubricant Throughput (Mbbl) 2,144 784 1,444 1,110 969 969 969
Diesel Throughput Fees ($/bbl) - - - $1.17 $1.17 $1.17 $1.17
Lubricant Throughput Fees ($/bbl) $1.31 $1.37 $1.15 $1.16 $1.13 $1.13 $1.13
Fuel Storage Revenues $2,819 $1,073 $1,660 $9,719 $10,077 $10,077 $10,077
Transloading Fees 86 121 513 1,926 1,975 1,975 1,975
Other Storage and Terminalling Fees 99 85 333 720 720 720 720
T otal Revenues $3,004 $1,279 $2,506 $12,364 $12,772 $12,772 $12,772
Storage and Terminalling Operating Expenses
Labor (444) (228) (223) (589) (601) (613) (625)
Utilities (105) (62) (53) (139) (141) (144) (147)
Ongoing Maintenance and Repair (112) (48) (56) (148) (151) (154) (157)
Insurance (206) (18) (104) (273) (279) (285) (290)
Property Taxes (154) (0) (154) (204) (208) (212) (216)
Steaming & Other Consumables (267) (149) (134) (89) (90) (92) (94)
T otal Operating Expenses (1,288) (504) (723) (1,441) (1,470) (1,500) ( 1,530)
Operating Margin $1,716 $775 $1,783 $10,924 $11,302 $11,272 $11,242
Corporate Expenses (411) (829) (837) (845) (854)
EBIT DA $1,716 $775 $1,371 $10,095 $10,465 $10,427 $10,388
Debt Service - - - (1,655) (1,655) (1,655) (1,655)
Maintenance Capex - - (125) (350) (350) (150) (150)
Pre-Tax Free Cash Flow $1,716 $775 $1,246 $8,089 $8,459 $8,621 $8,583

Transaction Sources and Uses Debt Schedule

New Term Loan $13,779 Cash Interest - (1,136) (1,093) (1,046) (996)
New Equity $9,186 PIK Interest 656 - - - -
Asset Purchase Price & Transaction Fees $(17,706) Principal Payments - (519) (562) (609) (660)
Terminal Upgrade Capital $(5,259) Debt Balance (End of Year) 14,435 13,916 13,402 12,849 12,254
Debt Service Coverage 6.1x 6.3x 6.3x 6.3x

1) assumes originally contemplated capital structure and effective date of 7/1/2023

CONFIDENTIAL 43 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Financial Projections
Assumptions and Contemplated Returns1
Key Assumptions for Financial Projections Multiple on Invested Capital (Equity) – Year-end 2026 Exit
Revenue assumptions
 2023 pro forma is 1Q ‘23 Seller operations semi-annualized and 2H Exit EBITDA Multiple
‘23 Company projections
 Diesel revenue: $1.50/Bbl for 1st turn, $1.00 for 2nd & 3rd 5x 6x 7x 8x 9x 10x
 Lubes revenue: $1.40/Bbl for 1st turn, $1.00 for 2nd & 3rd 1 Turn 1.8x 2.2x 2.5x 2.8x 3.0x 3.3x
 Tank-to-tank: 75 MBbls/mo at $0.75/Bbl
 Truck-to-tank: 5 MBbls/mo at $0.75/Bbl 2 Turns 3.6x 4.0x 4.4x 4.8x 5.2x 5.6x

 Truck loading: $0.15/Bbl

3 Turns 5.2x 5.8x 6.3x 6.9x 7.5x 8.0x
 Rail discharge/loading: 75 MBbls/mo at $0.75/Bbl
 2023 lube volumes only / ~ 93% utilization in 2H 23 for upgrades
IRR (Equity) – Year-end 2026 Exit
Debt assumptions
 5-year term loan with 15-year amort
Exit EBITDA Multiple
 6 mos of PIK and 8% cash interest starting 1/31/2024
5x 6x 7x 8x 9x 10x
Operating assumptions
 14,000 gallons per truck 1 Turn 22% 27% 31% 35% 38% 40%
 16 loading hours per day
2 Turns 60% 63% 66% 69% 71% 74%
 Four truck racks
 Trucks per day 3 Turns 91% 94% 97% 99% 102% 104%
 24 per day (one turn per month)
 45 per day (two turns per month)
 67 per day (three turns per month)
1) assumes originally contemplated capital structure and effective date of 7/1/2023

CONFIDENTIAL 44 PARKMAN WHALING LLC

Concluding Observations

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Concluding Observations

Fuel products terminal at the growing Port of Brownsville uniquely situated to service the growing
fuels demand associated with the industrial resurgence in Northern Mexico

Dislocated energy supply in Mexico supports continued growth of U.S. petroleum product exports

Base case lubricants business provides margin of safety for investors while facility upgrade plan and
service pricing optimization double cash flow once fuel tanks turn 2x/month

Identified expansion opportunities targeting storage volumes of 850,000 barrels

Infrastructure play with equity returns: contemplated pre-tax equity IRRs to the investor range from
60% to 75%, assuming two-turns per month and a sale at the end of 2026

CONFIDENTIAL 46 PARKMAN WHALING LLC

Appendix

CONFIDENTIAL
Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
Port of Brownsville – Key Terminal Operators

Bluewing

KLM

TransMontaigne

Valero

Motus
Energy Inter
Transfer Lube
ABC

Citgo

Source: Parkman Whaling , Cameron County Appraisal District, EPA, IRS, Enverus, HIFLD

CONFIDENTIAL 48 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
The Refinery Process and Associate Petroleum Products

CONFIDENTIAL 49 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
Specialty Products Value Chain
Feedstock

Crude Oil NGLs Natural Gas

~80% Base Oils

Intermediates
Chemical

Methanol Ethylene Propylene Aromatics Butadiene

Additives
Specialty

~20% Specialty
Chemical Additives Polyetheramines Ethanolamines Ethyleneamines Maleic Anhydride
Products
Groups

Lubricants Waxes Petrolatum White Oils Greases

Synthetic Elastomers Corrosion

Motor Oils Micro‐crystalline Candle Wax Mineral Jelly Moisturizers Food Lubricants Bearing Greases
Lubricants Additives Inhibitors
End Market Products

Metalworking Food‐Grade
Gear Lubricants Cheese Waxes Cosmetic Wax Shampoo Protectants Skin Care Auto Gear Grease Industrial Grease
Fluids Packaging

Marine & Diesel Electrical Food Shampoo / Plaster Molds/

Paraffin Wax Pharma Body Creams Activator Greases Hydraulic Grease
Oils Lubricants Preservatives Conditioner Casting

Transmission Industrial Alpha Olefin Cosmetic Care Agriculture

Packaging Product Additives Cosmetics Sealants High‐Temp Grease
Lubricants Lubricants Waxes Products Protectants

Military Hydraulic Healthcare Adhesive Lubricant

Artistic Wax Lithium Additives Sunscreen Silica Gel Lithium Grease
Lubricants Lubricants Remedies Additives Additives

CONFIDENTIAL 50 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
Lubricants: Base Oils Value Chain

Hydrocracker Bottoms
Feedstocks Vacuum Gas Oil (VGO)
(HCB)

High Pressure
Base Oil Solvent Extraction
Hydrotreating (HTUs) Catalytic Dewaxing
Production (LEU) and Solvent
and Solvent Dewaxing (CDW)
Dewaxing (MEK)
(MEK)

Base Oil Group II / Group III

White
Product Group Commodity Group 1 Group II
Oils II+ / III+
Sales

Blending and Inline and Batch Blending Packaging (1 Liter to

Blending
Packaging Bulk)

Finished
Specialty
End Products Base Oils White Oils Waxes Lubricants
Products
& Greases

Least Margin Value $/bbl Greatest

CONFIDENTIAL 51 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
Lubricants: Base Oil Groupings
 Base Oils are lubrication grade oils initially produced from refining crude oil (mineral base oil) or through chemical
synthesis (synthetic base oil) Base oil can be either paraffinic or naphthenic in nature depending on the chemical structure
of the molecules.
 Almost every lubricant used in plants today started off as just a base oil. The API has categorized base oils into five
Base Oils & categories. The first three groups are refined from crude oil to create base oils. Group IV base oils are full synthetic
Groupings (polyalphaolefin or “PAO”) oils. Group V is for all other base oils not included in Groups I through IV. Before all the
additives are added to the mixture, lubricating oils begin as one or more of these five API groups.
 The higher the viscosity index, the less the viscosity changes due to temperature change
 The higher the purity (i.e. level of saturates), the longer the base oil will last

Group I Group II Group III Group IV Group V

Group I Base Oils are the least Group II Base Oils are common in Group III Base Oils are subjected Group IV Base Oils are chemically Group V Base Oils are used
refined of all the groups. They are mineral based motor oils currently to the highest level of mineral oil engineered synthetic base stocks. primarily in the creation of oil
usually a mix of different available on the market. They refining of the base oil groups. Polyalphaolefins (“PAOs”) are a additives. Esters and polyoesters
hydrocarbon chains with little or no have fair to good performance in Although they are not chemically common example of a synthetic are both common Group V base
uniformity. While some automotive lubricating properties such as engineered, they offer good base stock. Synthetics, when oils used in the formulation of oil
oils on the market use Group I volatility, oxidative stability and performance in a wide range of combined with additives, offer additives. Group V oils are
stocks, they are generally used in flash / fire points. They have only attributes as well as good excellent performance over a wide generally not used as base oils
less demanding applications. fair performance in areas such as molecular uniformity and stability. range of lubricating properties. themselves, but add beneficial
Group I base oils are solvent- pour point, cold crank viscosity They are commonly mixed with They have very stable chemical properties to other base oils.
refined (e.g. separation process and extreme pressure wear. They additives and marketed as compositions and highly uniform Some examples of Group V Base
such as distillation, solvent are often manufactured by synthetic or semi-synthetic molecular chains. Group IV base Oils are: Alkylated Napthalene,
extraction and solvent dewaxing) hydrocracking which is a more products. These oils are refined oils are becoming more common Esters, Poly-alkylene glycols
which is a simpler refining complex process than that used even more than Group II base oils in synthetic and synthetic-blend (PAGs), Silicones, Polybutenes,
process, hence the cheapest base for Group I base oils. Since all the and generally are severely products for automotive and Polyester, Biolubes and etc.
oils on the market. Bright stocks hydrocarbon molecules of these hydrocracked (higher pressure industrial applications They have a These base oils are at times
have specifications at the upper oils are saturated, Group II base and heat). This longer process is much broader temperature range mixed with other base stocks to
end of Group I. oils have better antioxidation designed to achieve a purer base and are great for use in extreme enhance the oil’s properties. An
properties. They also have a oil allowing formulated lubricants cold conditions and high heat example would be a PAO-based
clearer color, lower levels of to maintain properties longer, applications. compressor oil that is mixed with a
aromatics, sulfur and nitrogen and enable improved fuel efficiency in polyolester. Ester oils can take
cost more in comparison to Group low viscosity motor oils and more abuse at higher
I base oils. Still, Group II base oils provide energy efficiency in multi- temperatures and will provide
are becoming very common on the grade industrial lubricants. superior detergency compared to
market today and are priced very Although made from crude oil, a PAO synthetic base oil, which in
close to Group I oils. Group III base oils are sometimes turn increases the hours of use.
described as synthesized
hydrocarbons. Like Group II base
oils, these oils are also becoming
more prevalent.

CONFIDENTIAL 52 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
Lubricants: Key Characteristics of Base Oils (1/2)
 Base Oils are the foundation on which all lubricants are built and represent ~80% of a lubricant’s content

 Additives are blended with Base Oils to make finished lubricants

 In finished lubricants, Base Oils provide:

— Lubrication, typically measured by viscosity
— A medium in which performance-enhancing Additives can either dissolve or suspend

 Impurities hinder the performance of the final lubricant, not allowing the Additives to work at their best
— Impurities reduce the life of a lubricant
— Impurities cause more wear on parts

 The purer the Base Oil, the better the final lubricant performance

 There are multiple types of lubricant Additives and packages of Additives are often marketed by large companies that
produce a group of additives:
— Dispersants, Detergents, Anti-wear Agents, Friction Modifiers, Anti-corrosion, Antioxidants, Diluents, Antifoams and
Demulsifiers, Pour Point Depressants

 The need to be thoroughly acquainted with the industrial business and to have multiple well established relations with
lubricant oil companies narrows the scope of chemical firms that have only a small range of Additives to offer and
makes it difficult for them to capture significant marker share in such a specialized market.

 2018 global lubricant additive demand is estimated to be over 4.4MM tons a year, including both active component and
diluent oil with 60% being consumed in making heavy-duty and passenger engine oils.

CONFIDENTIAL 53 PARKMAN WHALING LLC

Parkman
Whaling VCT Energy Holdings LLC August 2023

Appendix
Lubricants: Key Characteristics of Base Oils (2/2)
 Base Oils typically have a boiling point range between 500 and 1050 degrees F, consisting of hydrocarbons with 18 to 40 carbon
atoms
 Base Oils have variety of several different names: Neutrals (100N, 150N, 600N,…), Bright Stocks, grades with regard to their
finished lubricant: SAE 5, 10…; or standard tests: ISO 22, 32,… The most common names for Group I (SN: Solvent Neutral), for
Group II (N: Neutrals) and Group III grade names refer to the viscosity (4cst, 6cst, 8cst…) at 100 degrees Celsius. Grade names can
also refer to trademarks.
Viscosity Purity
Viscosity measures a fluid's resistance to flow Purity level of saturates in a Base Oil vs. impurities
Viscosity Index (“V.I.”) - Describes a fluid's tendency to thin as (aromatic molecules including sulfur and polar compounds)
the temperature rises with naphthenic having the lowest VI’s and − Higher the Purity (i.e. the better the oil), the longer the
paraffinic’s in the market Base Oil will last
− Higher the V.I. (i.e. the better the oil) the less the viscosity
changes due to temperature change
− Synthetic oil VI’s range from 80 – 400+
− Additives and higher quality base oils produced today raise
VI’s attainable beyond 100

100
Group II base oils have more than 90 percent saturates, Group III base oils are greater than 90 percent saturates,
Purity (% Saturate Level)

less than 0.03 percent sulfur and a viscosity index of 80 to less than 0.03 percent sulfur and have a viscosity index
120 above 120
90

Group I base oils are classified as less than 90 percent

saturates, greater than 0.03 percent sulfur and with a
viscosity-index range of 80 to 120. The temperature range
80 for these oils is from 32 to 150 degrees F

80 100 120 140 160

Viscosity Index

CONFIDENTIAL 54 PARKMAN WHALING LLC