Energy Firms Form Frontier Gas Services

Tenaska Capital Management and Energy Spectrum Partners have formed Frontier Gas Services LLC, a joint venture that will acquire and operate midstream natural gas infrastructure assets. The firms are committing upwards of $250 million, combined.

PRESS RELEASE
Tenaska Capital Management, LLC (TCM), an affiliate of Tenaska Energy, Inc. and the manager of the $2.4 billion TPF II, L.P. private equity fund, today announced that it has expanded and diversified its investment in the U.S. midstream natural gas sector by establishing a joint venture that will operate as Frontier Gas Services, LLC (Gas Services). The joint venture has been formed by TCM and Energy Spectrum Partners V LP (Energy Spectrum), a midstream-focused private equity fund, to back Frontier Energy Services, LLC (Frontier), an experienced and successful midstream manager and operator. Gas Services will focus on the acquisition, development, ownership and operation of midstream natural gas infrastructure assets primarily in the Mid-Continent, Permian Basin, East Texas, and unconventional shale plays throughout the U.S.

TPF II and Energy Spectrum will own a majority interest in the joint venture and pledge significant equity capital to fund natural gas midstream development and acquisition activities. TPF II and Energy Spectrum plan to invest at least a quarter of a billion dollars in Gas Services. Frontier will own an interest in and be the joint venture’s day-to-day manager, responsible for originating and completing investment opportunities. As part of the initial capitalization of Gas Services, Energy Spectrum and Frontier will contribute from their existing Frontier Midstream partnership the 36 MMcf/d Indian Creek natural gas processing facility located in Roberts County, Texas with production from the Granite Wash formation.

“The joint venture underscores our commitment to the midstream natural gas sector as an attractive, long-term investment opportunity,” said TCM Senior Managing Director Daniel E. Lonergan. “By combining the many strengths of TPF II, Energy Spectrum and Frontier, we have created a firm that has the resources and management talent to identify and build sustainable value in the domestic midstream natural gas sector. In addition to our Voyager Midstream portfolio company and our direct investments in the space, the joint venture provides us with a diversified platform from which we can deploy our capital to what we think is a very promising growth sector.”

Frontier specializes in the acquisition and commercial development of midstream natural gas assets. It is led by its founder, President and Chief Executive Officer Dave Presley, who has more than 32 years of experience in all phases of the natural gas industry.

Presley and his leadership team have been directly responsible for the operation of approximately 1.3 Bcf/d of gathering and processing capacity, 260 MMcf/d of natural gas treating capability and approximately 4,000 miles of natural gas gathering and transmission pipeline facilities. Frontier’s management team has successfully invested over $500 million of capital in the midstream natural gas industry. Recently, Frontier has expanded its focus to include greenfield gathering and treating infrastructure in the unconventional natural gas resource plays currently under development in the U.S.

“The joint venture provides us with a strong and more expansive platform to continue to grow our existing asset base,” said Presley. “I have long admired Tenaska and the TCM team, and our team and long-time partner Energy Spectrum are pleased that we will have the opportunity to work with them to build a midstream-focused natural gas business through acquisitions and greenfield development projects.”

“As long-standing investors with Dave and his team, we are excited to continue our partnership with them as they enter a new phase in their evolution,” said Energy Spectrum President Tom Whitener. “The joint venture brings together some of the most talented and experienced investors and operators in the U.S. midstream natural gas marketplace, and we look forward to helping it succeed.”

About Tenaska Capital Management, LLC

Tenaska Capital Management, LLC (TCM) is an affiliate of Tenaska Energy and provides management services to TPF II, as well as to its predecessor fund, Tenaska Power Fund, L.P.

About Tenaska Energy, Inc.

Tenaska Energy, Inc. is one of the largest independent power producers in the U.S. Forbes magazines ranks Tenaska 24th on its list of the largest privately held U.S. companies, based on 2007 revenues. Tenaska affiliates also market natural gas, electric power and biofuels, with Tenaska’s natural gas marketing affiliate ranked as one of the top 10 natural gas marketers in North America. Tenaska affiliates are also involved in private equity fund management, fuel supply, natural gas exploration and production and electric transmission development. For more information about Tenaska, visit the company’s Web site at www.tenaska.com.

About Energy Spectrum Capital

Energy Spectrum Capital was founded in 1996 to manage private equity funds that make direct investments in well-managed companies that acquire, develop and operate energy assets. The founding partners of the firm have spent almost all of their careers in the energy industry. In December 2007, Energy Spectrum closed its fifth fund, Energy Spectrum Partners V LP, with total limited partner commitments of $600 million. The closing of Energy Spectrum Partners V LP brought Energy Spectrum’s total direct equity under management to $1.3 billion. More information about the firm can be found on its Web site at www.energyspectrum.com.

About Frontier Energy Services, LLC

Frontier Energy Services, LLC, headquartered in Tulsa, Oklahoma, is a full-service, midstream energy company that specializes in the acquisition and commercial development of natural gas midstream assets, including gathering, compression, processing, and treating facilities, and the marketing of natural gas and natural gas liquids. Frontier was founded by Dave Presley in 2002. Its management team represents more than 150 years of combined experience in all phases of the natural gas industry. For more information about Frontier, visit the company’s Web site at www.frontierenergyllc.com.