Emerge Energy Services LP Investor Presentation November 2013 www.emergelp.com PAGE 1
Partnership Overview Sand Fuel Leading manufacturer of Northern Primarily consists of processing & White silica sand, 99% sold as a selling transportation mixture proppant for hydraulic fracturing (transmix) Attractive customer…
Our MLP Structure We have a simplified MLP structure All units are Common Units Non-economic General Partner No Incentive Distribution Rights (IDRs) No Minimum Quarterly Distributions (MQD) Our Sponsor, Insight Equity, which owns…
Our Sponsor and Organization Formed in 2002 Over 800 million of capital under management Strong track record of delivering investor returns Invests in middle market companies in asset intensive sectors Targets strategically…
Investment Considerations High Quality, Strategically Located Assets Significant Organic Stable Growth Cash Flow Capacity Experienced Low Cost Management Operating Team Structure www.emergelp.com PAGE 6
Our Business Objective And Strategies Our primary business objective is to generate cash flow that is predictable and steadily grows over time Sand segment has long-term contracts with creditworthy counterparties Seek Contractual Fuel…
SAND OVERVIEW www.emergelp.com PAGE 8
Proppants & Hydraulic Fracturing Frac sand, or proppant, is used to prop open fissures in hydraulic fracturing Demand expected to approximately double by 2021 Hydraulic Fracturing 2011 Proppant Consumption Resin Coated Sand 13%…
Overview of Sand Segment Assets The New Auburn and Barron facilities provide access to top quality, high performance frac sand favored in the drilling of crude oil, while the Kosse facility provides significant business opportunities in…
Competitive Advantages Emerge sand exceeds API and customer specs Quality of Sand Over 60% of Emerges Northern White sand is a mesh size of 50 or larger One of only four companies with commercial quantities of 16/30 sand…
Proppant Market Differentiation EMES mines and processes industry-leading frac sand There are significant variations in sand characteristics and quality OIL / LIQUIDS DRY GAS (Coarser Sand) (Finer Sand) 16-30 Mesh 20-40 Mesh…
Sand Contracts Our Sand Division provides high customer service to complement the strength of our contract mix Contracted fixed minimum volume Take Or Pay Specified price, delivery point, payment terms, and quality specifications…
North American Sand Markets EMES sand facilities are strategically located to provide customers with direct rail access to every major basin in North America National Network BNSF CN/GTW CP/SOO CSX /NS KCS/KSCSM UP Source:…
North American Sand Markets New Auburn, positioned on the UP, gives EMES access to all major plays in Texas and Oklahoma National Network UP All Others Basin Highest Quality Sand Mine Locations SSS Transload Sites Source:…
North American Sand Markets Barron loads directly onto the CN, giving one-line access to the Marcellus, Utica, WCSB, and Tuscaloosa Marine Shales, plus and access to Latin America via the Port of New Orleans National Network…
Sand Segment Growth Opportunities Recently secured new 5-year, 240,000 tpy contract at New Auburn Contracts and In negotiations for additional tons through multi-year, fixed Customers price/volume contracts Expanding and extending…
FUEL SEGMENT OVERVIEW www.emergelp.com PAGE 18
Fuel Segment Operations Fuel Segment provides a stable base with meaningful growth opportunities Transmix Fuel from Terminal Wholesale Biodiesel Pipeline Processing Transmix Sold Tankage Fuel Sold in Refining Connectivity (millions…
Refined Product Pipelines in the US Transmix facilities are primarily located along major refined products pipelines Direct AEC Fuels Refined Products Pipeline Transmix Facilities EMES FP&D Facilities www.emergelp.com PAGE…
Overview of Fuel Segment Business Fuel segment revenue comes from a diverse mix of stable margin and fixed-fee activities Product Source EMES Consumer Wholesale and Terminal Gasoline Vapor Recovery Unit Diesel Truck Pipeline…
Fuel Segment Growth Opportunities Leverage strong relationships and existing pipeline connectivity Transmix and Expand into adjacent geographies Throughput Birmingham facility has significant unused capacity Biodiesel facility…
FINANCIAL OVERVIEW www.emergelp.com PAGE 23
Recent Financial Results Unaudited Financial Results for Emerge Three Months Three Months Nine Months Nine Months Ended Sept 30, Ended Sept 30, Ended Sept 30, Ended Sept 30, 2013 2012 2013 2012 Revenue 270,241 176,002 627,225…
Selected Historical Performance Metrics Pro Forma for DF Acquisition / Sand in Tons / Fuel in Thousands of Gallons 3Q 2Q 1Q 4Q 3Q 2Q 1Q 2013 2013 2013 2012 2012 2012 2012 Sand Sales Volumes 344,700 288,560 188,064 11,903 Barron Sand…
Pro Forma Capitalization EMES has a 150 million revolver with an undrawn revolver capacity of 36 million EMES Capitalization as of 09/30/13 ( in millions) Cash (Unrestricted) 22.7 Revolving Line of Credit 109.0 Long-Term Debt /…
Key Investment Highlights One of the most attractive frac sand reserves with high percentage of high-crush coarse sand High Quality, Sand segment rail access on UP and CN railroads enables us to serve all major United States…
APPENDIX www.emergelp.com PAGE 28
Management and Board of Directors Years of Industry Name Title Experience Senior Management Team Rick Shearer Chief Executive Officer; CEO of SSS (Sand Division) 39 Warren B. Bonham Vice President, Fuel; President, Direct Fuels 28…
Unit Price Performance From the EMES IPO on May 8, 2013, through the close of the market on November 15, 2013 EMES Sand AMZ S&P VR MLP * Consists of market cap weighted share prices of eight comparable variable…
Yield Comparison Annualized indicative distribution yield as of the close of the market on November 15, 2013 2013 MLP IPOs Variable Rate MLPs www.emergelp.com PAGE 31
Non-GAAP Reconciliation The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measures, on a historical basis and pro forma basis, as applicable, for each of the periods…
Emerge Energy Services LP Investor Presentation November 2013 www.emergelp.com PAGE 33
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