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2013 Sink or Swim?

2013 Sink or Swim?. LDH Energy Ownership. LDH Energy operates across a diverse range of commodities-related activities capitalizing on synergies between the products and among its business lines.

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2013 Sink or Swim?

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  1. 2013 Sink or Swim?

  2. LDH Energy Ownership LDH Energy operates across a diverse range of commodities-related activities capitalizing on synergies between the products and among its business lines • Global business with operations in US (Stamford, CT and Houston, TX), China, Singapore, Canada, Switzerland and Uruguay • On October 3, 2012, LDH Energy announced a transition of ownership from the Louis Dreyfus Group and Highbridge Capital Management to a new group of “deep-pocketed” private investors, solidifying the business’s strong financial position and positioning the company for continued growth in the global merchant commodity markets • Upon completion of the transaction, LDH Energy will be rebranded Castleton Commodities International (“Castleton”) • The new owners will have non-operating roles with the Company, and the Company will continue to operate with the same management team LDH Energy / Castleton Pro Forma Ownership Structure DF Energy Acquisition LLC Independent Investor Group • Owned by Glenn Dubin • Co-founder, Chairman and Chief Executive Officer of Highbridge Capital Management, one of the world’s leading hedge fund managers with over $26 billion in AUM • Includes investment vehicles established by family trusts created by • Paul Tudor Jones, founder of Tudor Investment Corporation • Timothy Barakett, founder and Chairman of Atticus Capital and TRB Advisors • Continental Grain Company / Paul Fribourg Castleton Commodities International • Manages proprietary, permanent capital • Expertise includes trading in markets for natural gas, natural gas liquids, refined petroleum products, power, crude oil, and coal • Strategy based on detailed analysis of supply and demand dynamics augmented by its physical presence in the markets in which it operates • Uses market knowledge to identify attractive acquisition and development opportunities in the midstream asset sector 1 1 1

  3. Market Overview 2 2

  4. Market Overview The investment opportunity in shipping is driven by near term supply overhang versus strong long-term demand fundamentals Investment Opportunity Shipping Market Cycle Over Tonnage as supply exceeds demand • The investment opportunity in shipping is a balance of near term over supply leading to depressed valuations and day-rates versus long term fundamentals • When accounting for inflation, asset prices are nearing 10-year lows • However the long-term prognosis for shipping is very healthy • More product is moving on the water • More product is moving farther on the water • Massive Infrastructure projects due for completion 2014 through 2015 resulting in a massive increase in export capacity to meet global demand • Africa is emerging as a new global supplier of key raw materials • Increased nearby scrapping as scrap prices remain firm Freight rates drop Demand for new buildings drops Over ordering by speculators, owners Demolitions Ship prices fall Fleet Shrinks Excess of ship building capacity Freight rates recover Yards reopen or new yards created Demand for new buildings increase Source: Baltic Exchange October 2012. 3

  5. State of the Dry Bulk Fleet Asset valuations and charter rates reflect the global economic slowdown and supply overbuild Second Hand Price (1) Newbuilding Price (1) million US$ million US$ One-Year Timecharter Rate (1) Scrap Value Price (1) US$ / Day million US$ • Source: Clarkson Research, October 2012. 4

  6. State of the Dry Bulk Fleet Huge declines in 2013-2014 because dry bulk fleet reached a peak in expansion and oversupply in 2011 Dry Bulk Orderbook and Newbuildings Chart (1) million DWT Dry Bulk Orderbook and Newbuildings Table (1) (2) • Source: SSY Research, October 2012. • In 1,000 dwt, metric tons. 5

  7. Strong Outlook for Ship Recycling Market Recycling older ships will put further pressure on shipping capacity Dry Bulk Tonnage on Order vs. Scrapping Potential • Current conditions point to a strong recycling market going forward • As vessels approach 15 to 25 years of age, ship owners must face costs associated with special surveys and dry-docking • In the weak current environment recycling older ships becomes compelling Historical High Ship Scrapping • The scrapping market will remain robust over the next several years, further decelerating the rate of growth in the bulk carrier fleet • 100 million deadweight of the bulk carrier fleet are over 15 years old and over 20 million deadweight of the tanker fleet is over 20 years old • Source: SSY Research, October 2012.

  8. Pressure to Scrap Old Ships The new eco-speed designed ships will save US$7,280 per day or over US$2.66 million annually in fuel. These new ships are putting pressure on older designed hulls to scrap earlier than originally planned Current Newbuildings Next Year Eco-Speed Newbuildings Name: BITTERN Yard: Yangzhou Dayang, China DWAT: 57,809 mt on 12.95 m ssw, GRT/NRT: 32,982 / 20,108 LOA/Beam: 189.99m / 32.26m Speed: abt 14.5 kn ballast on abt 35.0 mt IFO, and abt 14.0 kn laden on abt 36.5 mt IFO Name: Loch Crinan Yard: Oshima, Japan DWAT: 56,000 mt on 12.53 m ssw GRT/NRT: 32,000 / LOA/Beam: 190 m / 32.26 m Speed: abt 14.3 kn ballast on abt 24.8 mt IFO, and abt 14.0 kn laden on abt 24.8mt IFO Difference in consumption on laden speed = 11.2 metric tons / day Fuel cost = US$ 650 per metric ton Daily Fuel difference = US$ 7,280 per day Annual Fuel Difference = US$ 2.66 million per year 7

  9. Underlying Fundamentals Long term shipping demand is strong and poised to accelerate coming out of the recent global slowdown Dry Bulk Seaborne Trade for Major Commodities (1) mm Mt (Average Growth 2010-2016E: 5.8%) (Average Growth 2001-2009: 3.7%) (Average Growth 1993-2000: 3.2%) (Average Growth 1984-1992: 1.9%) • Source: Clarkson Research and LDH Energy Research, October 2012. 8

  10. Coal Market Outlook Global demand for coal continues with seaborne coal trade volumes expected to increase by more than 10% by 2015 2015 Outlook – Key Themes • Global demand growth for coal continues, with China and India as the largest drivers • Domestic production of key importing countries, including China and India, is expected to be outpaced by demand growth, requiring increased imports • Key exporting countries are planning production growth and expansions of port capacities to meet demand • Seaborne coal trade volumes are expected to increase by more than 10% by 2015 Seaborne coal net imports (mm MT) (1) Seaborne coal net exports (mm MT) (1) • Sources: Wood Mackenzie, Morgan Stanley, World Steel Association, McCloskey, Tex Report, 2012.

  11. Ways to help USA coal compete in the Asian market

  12. Long Term Commodities Demand – Africa Africa has been the second fastest growing region in the world after emerging Asia and IMF projections confirm the same trend to continue • Africa is abundant with natural resources and is emerging as the new “hot spot” for the long term. Poor infrastructure and port facilities will result in demand for Handy / Supramax geared tonnage • African trade with China and India is rising at an annual growth rate of 56%. Africa imports manufactured goods such as machinery, transport equipment and textiles • China has stepped up its campaign to break the dependence on Australia, Brazil, India and South Africa for iron ore and has agreed to a spate of joint ventures in places such as west Africa which could produce nearly 250 million Mt of ore annually in the medium to long term • Brazil is also scrambling for projects and deals in Africa. Vale is planning to invest US$15-20 billion in Africa over the next five years and already invested US$2.5 billion • Rio Tinto plans to ship their first iron ore from Simandou, Guinea in 2015 with an eventual capacity of 100 million Mt per annum. This project will involve eventually a new deepwater port near Conakry Average Real GDP Growth (1) Annual Output Growth in Coal and Iron Ore (2) • Source: Financial Times, November 2011. • Source: ICAP Shipping Research, October 2012. 11 11

  13. Long Term Commodities Demand – Africa (cont’d) Africa mining investment and output will ramp up significantly from 2013 through 2015 and will increase future demand for freight Guinea iron ore coal • Simandou (BSGR/Vale) • 2012: 2 Mtpa • 2014: 15 Mtpa • 2015: 100 Mtpa • Kalia (Bellzone Mining) • 2014: 30 Mtpa • 2015: 50 Mtpa Tanzania • Ngaka (Intra Energy) • 2015: 1.5 Mtpa Sierra Leone • Marampa (London Mining) • 2011: 1.8 Mtpa • 2012: 3.6 Mtpa • Tonkolili (African Minerals) • 2012: 15 Mtpa • 2013: 20 Mtpa Mozambique • Moatize (Vale) • 2011: 1.5 Mtpa • 2012: 6.3 Mtpa • Benga (Rio Tinto) • 2011: 0.5 Mtpa • 2012: 2 Mtpa • Minas Moatize (Beacon Hill) • 2012: 0.6 Mtpa • 2013: 4 Mtpa Liberia • Mount Nimba (ArcelorMittal) • 2011: 1.2 Mtpa • 2012: 4 Mtpa Cameroon South Africa • Mbalam (Sundance Resources) • 2014: 35 Mtpa • Vele (CoAL) • 2011: 1 Mtpa • Makhado (CoAL) • 2013: 5 Mtpa • Zibulo (AngloAmerican) • 2012: 6.6 Mtpa South Africa • Sishen (AngloAmerican) • 2014: 0.8 Mtpa • Kolomela (AngloAmerican) • 2013: 9 Mtpa Congo-Brazzaville • Mayoko (African Iron Ltd) • 2014: 5 Mtpa • Source: ICAP Shipping Research, October 2012. • Source: Financial Times and Rio Tinto. 12 12

  14. New Infrastructure The new infrastructure will bring additional annual capacity of 1,073 million Mt which means global shipping will need approximately 958 new Capesize ships per annum without port congestion (1) Infrastructure Projects Underway at Cargo Loading Ports (2) • Assuming one Capesize ship can load approximately 1.12 million Mt of cargo per annum without ship slowing and scrapping. • Source: ICAP Shipping Research, October 2012. T Parker Host, McCloskey, BREE, The Australian, Notes: projects under study not included, US export capacity does not include potential West Coast expansions, 2012. 13

  15. Conclusion: The Case for Dry Bulk Vessel Investment Current vessel valuations and outlook provides great opportunity for vessel acquisitions • Vessel overcapacity has outstripped current demand growth of commodities • Tonnage supply is expected to decline while international commodity demand will remain strong, improving our vessel supply/demand balance • We are forecasting a tightening dry bulk market in the 2014 to 2017 period • New port infrastructure will allow for more commodities to travel by sea • Vessel valuations are currently lower than 2008, providing a strong platform for vessel acquisitions Global Vessel Supply vs. Demand (1) mm Mt • Source: Clarkson Research and LDH Energy Research, October 2012.

  16. Investment Opportunities & Strategy 15 15

  17. Vessel Values and Opportunities Overview – Handysize 5 – 6 Year Handysize Sales • Source: Compass Maritime, Clarkson Research.

  18. Vessel Values and Opportunities Overview – Handymax / Supramax 5 – 6 Year Handymax / Supramax Sales (2) • Source: Compass Maritime, Clarkson Research. • Represents Handymax rate.

  19. Vessel Values and Opportunities Overview – Panamax 5 – 6 Year Panamax Sales • Source: Compass Maritime, Clarkson Research.

  20. Vessel Values and Opportunities Overview – Capesize 5 – 6 Year Capesize Sales • Source: Compass Maritime, Clarkson Research.

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