2010 Corporate Ridge, Suite 700 Phone: (703) 749-1434
McLean, VA 22102 Fax: (703) 790-3656
Email: Cell: (917) 509-2161

December 19, 2015

Dear Fellow Investor:

Before I get into the full fund update, please allow me to make three points: Executive Summary
               1. BP Capital
               2. MEMP
               3. NGP

are principally driven by the 24% decline of the price of oil (WTI) in the third quarter. In addition, the S&P 500 fell 7% in the quarter and, as Spitfire's Julian Allen wrote in his letter, which is attached as Exhibit A, "September was a difficult month for small capitalization stocks and for risk assets generally." This table shows the exact performance of the individual investments:

3rd Quarter 2015 Asset Performance
BP -86%
MEMP -68%
NGP Fund X -9%
NGC Fund XI -7%
Semper Vic -2%
Spitfire -9%
TriPro 18%
Total Fund -37%

If one believes, as the public markets seem to sometimes, that fossil fuel use will soon become a thing of the past, our remaining oil and gas related investments are going to have trouble recovering. If, however, one believes that the world will continue to need fossil fuels for the future and that the right long-term price of oil is not $35 a barrel (it does not have to return to $100 a barrel either), then these investments should have futures that are more in line with the exceptional returns that the managers running them have achieved in the past. Please see below for specific investment commentary.

BP Capital

The biggest decliner is BP Capital's 86% loss. Such a dramatic loss certainly worries me. That said, frequent updates from the BP team give the following important information: NGP

NGP Fund X fell 9% and NGP Fund XI fell 7%. Everything NGP has shown us suggests that both funds are well positioned: MEMP

In the cases of NGP X and XI, NGP has demonstrated that they are doing everything possible to weather the downturn in oil and gas prices so as to have the portfolio experience a dramatic rebound when commodity prices recover some. (Again, prices do not have to go back anywhere close to $100 per barrel of oil for our commodity investments to recover.)

Unfortunately, I cannot give the same vote of confidence to MEMP's management or to NGP's stewardship of MEMP, which NGP effectively controls. (To be clear, I am comfortable with how NGP has managed NGP X and NGP XI and very disappointed with how NGP and its hand chosen MEMP management team have led MEMP.) In my view NGP's actions indicate a detachment from MEMP: not only have MEMP's board members (including the three members from NGP) and management not invested important amounts of their own net worth in the company, but also they have given themselves more options in the company at lower prices to compensate them for the fall in the stock price. Shareholders, including us, have by contrast suffered very much from the fall in MEMP's share price. Management has been insulated from the suffering, but investors have not been.

This situation is the antithesis of the alignment of interests that we try to have in each of Cui Bono's investments. When we first got involved with MEMP, NGP seemed very committed to MEMP, but that commitment has appeared to wane over time. MEMP's stock is very cheap and should do very well as energy prices recover, but neither of those things provide enough comfort if the evidence continues to suggest that that NGP has largely abandoned MEMP.

We have gone to extraordinary lengths (please see Exhibit B for my email to Ken Hersh, CEO of NGP and MEMP Board Member, and my letter to Jeff Ubben, Founder and CEO of ValueAct) to try to help MEMP access capital for acquisitions. This capital, some of which could also be used to repair MEMP's balance sheet, would enable MEMP to generate significant and additional sustainable cash flow that would help the company's business and MEMP's stock price recover. However, MEMP has not embraced these initiatives. The company may surprise me and announce a large non-dilutive capital raise tomorrow, but in my most recent conversation with MEMP's lead banker on Wednesday, December 16, 2015, I still did not get the sense that the company feels it is in a crisis and needs to work with all diligent speed to solve it. This is a company whose stock is down approximately 40% in the past two weeks, and down about 90% since coming public in December 2011. Based on this performance, it seems rational to think that the company might accept any help it could get. Hence, it stunned and disappointed me when the company turned down a meeting we arranged with a $20 billion hedge fund with a history of helping troubled companies. This hedge fund, ValueAct Capital (VAC) sits on the board of and has helped with the turnaround of Microsoft. It seems reasonable to me that they might have a good deal to offer MEMP.

MEMP is no longer part of Cui Bono. We will not risk more capital on it unless and until we see overwhelming evidence that NGP once again stands fully behind and will remain behind the company as they did at one time. It seems extremely unlikely to me that we will become shareholders of MEMP again.


Please see Exhibit A for Julian Allen's comprehensive third quarter Spitfire update. Having recently spent an afternoon with Julian and his team, I feel better than ever about the opportunities that Spitfire is finding. Julian's entire letter is well worth reading, but for me this quote encapsulates much of the letter:
"Indeed, as Howard Marks says, "it's not easy." While I am pleased that the Fund is up year to date and remains ahead of the benchmarks, we are continually re-assessing our investments and our research process with a view to driving continuous improvement and constant learning. I am convinced that this is the only way to improve our absolute and relative performance over time. I am more confident than ever that our strategy, when correctly applied, should continue to produce superior results."

As discussed above, Cui Bono's mission is to "Back People We Admire Whose Incentives Align With Our Own". I have always been up front in saying that Cui Bono is likely going to have good and bad periods. In that spirit, and in spite of this quarter's performance, I believe that going forward we are backing the right people in the right asset classes and the long-term results will prove worthy of our trust. The aforementioned two newest investments with TriPro serve as quintessential examples of the people we are trying to back and of the investments they are making.

Given my belief that it is now a much more prudent time to be a buyer rather than a seller of the assets Cui Bono owns, I am going to do two things with my own capital:
I encourage investors to consider joining me in both options, as I do not know where prices will be in six months, but believe that over a ten-year investment horizon today will prove to be a particularly good time to put capital to work. In addition, now strikes me as a great time to share the opportunity to invest in Cui Bono with your friends for two reasons:
Again, thank you for your confidence in Cui Bono and in me. If you would like to discuss anything, please call or email me. Most importantly, please email me to let me know:

Daniel J. Anglin, Jr.

Exhibit A
Spitfire 3rd Quarter 2015 update letter

Exhibit B
November 29, 2015 Email to Ken Hersh
November 23, 2015 Letter to Jeff Ubben

Dear Ken:

Hope that you and your family had a wonderful Thanksgiving.

Jeff Ubben, Founder and CEO of ValueAct Capital (VAC), is copied on this email. Jeff would like to meet you, and this note serves to make that introduction. (As an FYI, Jeff and David Rubenstein serve together on the Duke Board of Trustees.) You and Jeff have at least one thing in common, something very rare in our industry: you have generously shared the economics of the firms you founded and have built teams and organizations much bigger than yourselves.

As we are with NGP, we are grateful long-term investors in ValueAct. Also as with NGP, VAC’s results have been extraordinary, and we are very fortunate to have them as stewards of our capital. I shared not only NGP’s results with Jeff, but also my personal respect and professional admiration for you and for what a wonderful steward you and NGP have been for our investors.

Jeff and I met at my request the day before Thanksgiving. With MEMP now down about 75% for the year, I owe it to my investors to explore any opportunities that might help MEMP and help us salvage our interest in it. In that vein, I suggested to Jeff in a letter and in that meeting that a win-win partnership might be possible between MEMP and VAC. (My entire letter to Jeff appears below this email.) In my letter, I also volunteered for our firm to bring in up to 30% of any non-traditional equity financing that might occur involving MEMP and VAC.

As background, Jeff was a portfolio manager at Fidelity when I was an analyst. In the spirit of the quote that “No man is a hero to his valet.”, one knows that when the analysts like a portfolio manager, he must not only be a respected investor but also a good guy. Jeff displayed the same passion, integrity, investment acumen, and sense of humor in our small Fidelity world as he does now on a much larger stage. Whatever happens or does not happen from an investment perspective, I encourage you to take the time get to know Jeff: it will be worth your while and his.


2010 Corporate Ridge, Suite 700 Phone: (703) 749-1434
McLean, VA 22102 Fax: (703) 790-3656
Email: Cell: (917) 509-2161

November 23, 2015

Mr. Jeffrey Ubben
Value Act Capital
One Letterman Drive
Building D, 4th floor
San Francisco, CA 94129

Dear Jeff,

Thank you in advance for taking the time to meet with my colleague, Rich Russo, and me at VAC on Wednesday morning, November 25th (You first met Rich as one of my summer 2014 interns and again recently at the September VAC meeting). We look forward to discussing this potential acquisition and consolidation platform opportunity with you.


Fidelity taught me that to have a successful interaction with a PM, you had to do three things. Here they are: Dave Lesar's Constant

As Dave Lesar said at the VAC meeting, this oil and gas cycle may be different in many ways, but one constant will be that distressed sellers get forced to part with assets at prices that offer opportunistic buyers extraordinary investment returns.

The challenge today with so much capital trying to find attractive investments in oil and gas is locating partners with access to both the best deals in the industry and to a publicly traded platform that can serve as a compounding machine for those investments.

NGP and Deal Environment Background
MEMP Background
Why An Opportunity For VAC?
Why An Opportunity For MEMP?
Suggested Deal Structure
The Investment Case: What One Has To Believe For Success

For this MEMP investment to deliver to VAC an IRR in excess of 20%, one has to believe a few things: The Bear Case

We try hard to examine our investment theses and their underlying assumptions via a "Devil's Advocacy" process including making a close examination of what "The Bears" against our investment thesis would say. In the case of MEMP, the bears' objections break into two broad categories: Suggested Next Steps
Alignment of Interests and Co-investment
Cliff Risk

At the VAC meeting you emphasized VAC's philosophy of seeking to partner with people who take cliff risk and get paid only when they deliver superior results. Hence, I would propose our firm receiving nothing unless VAC achieves an IRR of 20% on any investment it makes in MEMP. Once VAC has achieved that hurdle, we would ask for a success fee and catch up of 20% of the economics above the level that delivers VAC a 20% IRR. We will help in any way we can, and we will work under your direction in any way or none that you desire to continue to add value to this project.

Jeff, thank you for your time and your consideration of this opportunity. We look forward to discussing with you.


Daniel J. Anglin, Jr.

Exhibit A - IRR Sensitivity Tables
Table 1: Varying Stock Price and Annual Cash Coupon on Preferred Stock
Table 2: Varying Stock Price and Warrant Strike Price

Exhibit B - Proposed NGP / MEMP Invitation Email

EXHIBIT A - IRR SENSITIVITY TABLES (Click tables to enlarge)



Dear John, Bobby, Ken, and Scott,

As you may know, ValueAct Capital (VAC) is one of the world's most respected investment firms, and currently serves on nine boards including that of Microsoft. VAC's founder, Jeff Ubben, who is copied on this email, and I worked together at Fidelity. Our firm is a long-term investor in VAC, and I have told VAC's principals of our admiration for NGP and its track record of approximately 30% IRRs since 1988.

With regard to MEMP, I have shared with VAC's principals the comments from MEMP's management in the latest call that the company is searching for a source of non-traditional equity capital for acquisitions. In addition, VAC has heard my views that in spite of the tremendous selloff in MEMP's shares, with the right capital partner MEMP still has a chance to turn chaos into opportunity via the consolidation of marquis assets from distressed sellers. In my view, VAC is the quintessential capital partner for MEMP, and VAC would be a wonderful long-term asset for John, Bobby, and the rest of management to utilize. With this goal in mind, I encourage you to accept VAC's invitation to a meeting in San Francisco to explore this potential partnership.

If a meeting happens between VAC and MEMP and if VAC gets comfortable with MEMP's strategy, it is my belief that the two sides might structure a win-win partnership offering extremely favorable economics to both groups.

VAC knows the oil and gas industry through past investments and is poised to become the third largest shareholder in the combination of Haliburton and Baker Hughes. Haliburton CEO, Dave Lesar, recently presented at VAC's investor meeting, and said something that struck me as the most important point for this potential partnership between VAC and MEMP:

"This oil cycle will have at least one thing in common with previous cycles: the assets in the ground are not going anywhere, they will just be sold by distressed sellers to other owners at lower prices."

As a MEMP shareholder, I continue to believe that MEMP can be one of the winners and that working with VAC can facilitate MEMP's success, and I encourage you to explore these possibilities by accepting VAC's invitation to come to meet in San Francisco.

All the best,

Dan Anglin