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Scotia Howard Weil Energy Conference – Tetra Technologies Inc.

Tetra Technologies Inc. · Mar 22, 2016 · 54 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 1
    TETRA Technologies, Inc. CSI Compressco LP March 2016
  2. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 2
    Corporate Profiles Stock Market NYSE: TTI NASDAQ: CCLP Recent Share Price(1) 6.83 5.90 Market Capitalization(1) 548.2M 195.8M Enterprise Value(1) 841.1M 776.3M Number of Shares/ 80.3M 33.2M Units Outstanding(2) Average…
  3. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 3
    2015 Accomplishments TETRA free cash flow of 120M (1) Reduced TETRA debt by 102M (26%) without an equity offering, improved leverage ratio 1.86X Strengthened TETRAs balance sheet; only 47M of debt maturities before April, 2019…
  4. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 4
    Transformation and Evolution Key Milestones Purchased TETRA IPO of Completed Acquisition of Achieved 120M Chemicals Europe Compressco Acquisition Compressor of adjusted FCF(1) Partners, L.P. of 3 PT Systems, Inc. Businesses…
  5. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 5
    Transformation and Evolution 1 and 2 in all key services segments 2015 OFFSHORE SERVICES One of the largest 122M North American 11% production testing companies The largest vertically PRODUCTION TESTING Integrated compression…
  6. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 6
    Fluids
  7. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 7
    Fluids Chemicals/Completion Fluids Only vertically integrated service provider globally Seamless supply channel from manufacturing plants to CBF blending facilities Significant infrastructure Strong global competitor Introducing…
  8. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 8
    Fluids - Calcium Chloride Strengths Leading producer and marketer Europe North America Significant footprint and capabilities Amboy, California Plant Manufacturing Logistics Diverse customer base Oil and Gas: Drilling and…
  9. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 9
    Fluids - Calcium Chloride Footprint Leading supplier in Europe and North America Production Capacity 1.5 Million Tons Liquid 200,000 Tons Flake Liquid CaCl2 Plant Liquid/Dry CaCl2 Plant Third Party Supply Agreements New…
  10. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 10
    Fluids - Brominated Clear Brine Fluids Strengths Long-term agreements o Bromine supply o Toll manufacturing State-of-the-art manufacturing plant Unique technologies o Patented and proprietary manufacturing processes o Rework…
  11. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 11
    Fluids - Brominated Clear Brine Fluids Footprint Long-term bromine supply agreement North Sea Stable, predictable cost advantage Middle East Gulf of Mexico Co-producer swap and toll agreement Brazil TETRAs markets for…
  12. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 12
    Fluids - North America Footprint Strong Market Network and Presence 280 Leased Cars12 Barges13 Terminals 5 Warehouses Liquid CaCl2 Plant Liquid/Dry CaCl2 Plant Liquid Terminal Dry Warehouse CBF Plant 13
  13. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 13
    Fluids - Recent Innovative Product Introductions TETRA CS Neptune Completion o Developed as customized solution Fluids o Zinc free solution for deepwater and high-pressure wells TETRACleanTM o Environmentally friendly…
  14. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 14
    Fluids Financial Overview Revenue 2015 Revenue Profile 150 123 117 105 105 110 111 100 100 99 94 89 91 100 International 50 28% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 United States 2013 2014 2015 72% Adjusted EBITDA and…
  15. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 15
    Production Testing
  16. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 16
    Production Testing Highlights Balanced domestically and internationally Saudi Arabia and Permian Basin represent biggest areas of concentration Customer base is the better capitalized operators that value HSE&Q Focused on completions…
  17. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 17
    Production Testing Frac Flowback Production Testing Optima Early Production Facilities Remove residual sand Access and evaluate Offshore Rig Cooling Deliver engineered and debris to allow well performance suppresses heat customized…
  18. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 18
    Production Testing Focused on Key Markets United States one of the largest 2015 Geographic Revenue Footprint production testing companies operating in all shale basins Saudi Arabia 100% owned, 12 year presence, multiple…
  19. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 19
    Production Testing Financial Performance Revenue (In Millions) Strong Cost Discipline and Customer Diversification Tactics 60 55 47 47 50 57 50 47 44 42 North America Rig Count(1) -61% 40 37 35 33 29 30 Revenue 2015 -31% 20 10…
  20. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 20
    Offshore Services
  21. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 21
    Offshore Service Business Model Cutting Downhole Consulting Heavy Lift Diving Services Services Services Ability to reduce/flex costs 1 or 2 in all our key sectors Cash flow positive in the valley of the cycle Light asset…
  22. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 22
    Offshore Services Financial Performance A strong culture of cost discipline with a variable cost model Q4 In Millions Total Year 2015 2014 2015 2014 38 42 Revenue 122 195 -13% % Change -37% 31 42 Adjusted Operating Costs(1) 110…
  23. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 23
    CSI Compressco LP
  24. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 24
    CSI Compressco 2015 Highlights Successfully Completed the First Year of Integrated Company Operations 2015 Distribution Coverage Ratio [1] of 1.29x Adjusted EBITDA Margin [1] 27.2% of 2015 Revenues Cash Flow from Operating…
  25. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 25
    Compression Overview Physical Requirement for Compression is Disassociated from the Price of Oil and Natural Gas Compression is required multiple times throughout the value-chain from production to consumption Diversity of customer…
  26. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 26
    CCLP Business Model Vertically Integrated Flexibility for a Wide Range of Customer Compression Needs Fee-based services contracts utilizing CCLP Common management, inventory and compression services fleet equipment and personnel…
  27. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 27
    Compression Services Stability Most Profitable Product Line is also Most Stable Product Line Utilized Fleet [1] Fleet Application [1] Natural gas consumption in the U.S. has continued to increase Gas Lift 0-100 HP other EOR 15%…
  28. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 28
    Compression Services Geographic Diversity Operating in the Most Prolific Producing Basins in the U.S. Bakken Utica Niobrara HP by CCLP Region [1] International Monterey Marcellus 4% East 10% South Texas Woodford 25%…
  29. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 29
    Equipment Sales and Manufacturing Scalable Manufacturing Platform Sufficient for Growth Well Into the Future Experienced Over 5 million horsepower packaged Compression Over 10,000 compressor packages built Packager Internal design,…
  30. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 30
    Market Position Compression Services Competitive Landscape Revenue Generating Hp [3] 4th Largest Fleet by Hp 4,000 3,580 3,500 3,000 11% GCA Market share U.S. and Canada [1] Horsepower in thousands 2,500 2,000 1,424…
  31. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 31
    Financial Overview Predictable Cash Flow that is not as Susceptible to Commodity Price Downturns Compared to Other OFS Year over year revenue stability from compression services able to absorb quarterly volatility EBITDA margin…
  32. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 32
    Distribution and Cash Management Ample Cash Flow Available to Absorb Prolonged Market Down Turn CCLP Cash Flow Distribution Coverage Ratio and Annualized Quarterly Distributions per Unit [3] 180 1.80x 3.50 160 1.60x 140 3.00…
  33. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 33
    Covenants, Debt & Liquidity Proactively Manage Distribution to Protect Balance Sheet Minimal CapEx required to maintain cash flows No near term debt maturities Positive and stable free cash flow generation Debt and Liquidity [1]…
  34. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 34
    Counterparty Risk Well Capitalized, Diverse Customer Base with Strong Credit Ratings Length of Moodys / S&P Rank [1] Customer Type Relationship Credit Rating [2] 1 Very Large Public Independent E&P 15+ Years Baa2 / A 2 Large…
  35. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 35
    2016 Outlook Focused on Protecting Profits, Reducing Debt and Managing Liquidity in Challenging Market Proactively reduced distributions by 25% [1] to position CCLP to reduce debt Reducing growth CapEx from 85M in 2015 to between 8M…
  36. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 36
    Financial Overview
  37. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 37
    Strong 2015 Financial Performance Thousands Revenue 1,128M +5% (1) Adjusted EBITDA 254M +33% % of Revenue 23% (vs 18% in 2014) (2) Free Cash Flow 120M +40% % of Revenue 11% (1) TTI excluding Maritech (MRI) and certain…
  38. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 38
    TETRA Earnings Trending Up TETRA Only Adjusted EBITDA(1) + CSI Compressco Distributions Trailing Twelve Months - Millions 190 170 150 130 110 90 70 TETRA adj. EBITDA CCLP Distributions Cumulative Impact…
  39. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 39
    Two Distinct & Separate Capital Structures Millions As of 12/31/2015 TETRA CSI Compressco Unrestricted Cash 12 11 Borrowing Capacity(1) 195 88 Liquidity(2) 207 99 Revolver Outstanding 23 235 Current Portion of LT Debt - - Long…
  40. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 40
    TETRAs Improving Credit Profile Debt and Liquidity(1) Leverage Ratio(2) 500 4.00x 430 3.38x 450 395 397 3.50x 379 400 358 358 2.94x 2.88x 331 3.00x 2.73x 350 293 2.42x 2.38x 300 2.50x 2.02x 1.86x 250 207 2.00x 200 181 157…
  41. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 41
    No Significant Short-Term Maturities TETRA excl. CSI Compressco CSI Compressco 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021…
  42. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 42
    2016 Outlook Anticipating depressed operating environment throughout 2016 Guiding towards break-even to 10M positive free cash flow in Q1-2016 for TETRA (1) Expecting uptick in major GoM projects in H2 CSI Compressco distributions…
  43. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 43
    TETRA Technologies, Inc. CSI Compressco LP March 2016
  44. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 44
    Non-GAAP Financial Measures This presentation includes non-GAAP financial measures, Adjusted EBITDA, Adjusted EBITDA margin, enterprise value, distributable cash flow liquidity, distribution coverage ratio and debt to Adjusted EBITDA.…
  45. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 45
    Non-GAAP Reconciliations TETRA Consolidated - Adjusted EBITDA Reconciliation '( in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Income (Loss) Before Taxes (5.1) 3.2 (4.4) 18.7 (17.6) (10.7)…
  46. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 46
    Non-GAAP Reconciliations TETRA excl. Maritech- Adjusted EBITDA Reconciliation '( in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Income (Loss) Before Taxes 17.8 8.1 19.3 34.1 2.6 (4.1) 8.2…
  47. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 47
    Non-GAAP Reconciliations TTI Free Cash Flow Reconciliation Q1-14 Q2-14 Q3-14 Q4-14 2014 Q1-15 Q2-15 Q3-15 Q4-15 2015 TTI Consolidated Cash from operations 36.1 4.6 11.3 56.7 108.7 27.8 54.3 36.1 77.7 195.9 ARO Settlements 13.3 16.5…
  48. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 48
    Non-GAAP Reconciliations Liquidity in millions Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 TTI excluding CSI Compressco TTM 151.8 141.9 129.5 136.8 140.8 155.9 168.9 164.8 EBITDA per Bank Agreement Long Term Debt 305.0 305.0 305.0…
  49. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 49
    Non-GAAP Reconciliations Fluids - Adjusted EBITDA Reconciliation '( in Millions) Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Income (Loss) Before Taxes 17.0 17.8 20.9 13.7 18.5 17.1 16.5 12.6 17.7 32.6 33.2…
  50. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 50
    Market Capitalization & Enterprise Value (thousands, except per share amounts) Market Capitalization: TTI Market price per share on 3/17/2016 6.83 Shares outstanding as of 2/29/2016 80,257 Market Capitalization 548,155…
  51. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 51
    Non-GAAP Reconciliations Distributable Cash Flow in millions Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 2015 Income (loss) before taxes 11.9 3.7 0.9 3.9 5.3 0.6 (0.1) 3.4 2.4 1.5 2.0 (152.6) (146.7)…
  52. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 52
    Non-GAAP Reconciliations Adjusted EBITDA in millions Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 2015 Income (loss) before taxes 11.9 3.7 0.9 3.9 5.3 0.6 (0.1) 3.4 2.4 1.5 2.0 (152.6) (146.7) Depreciation…
  53. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 53
    Non-GAAP Reconciliations Liquidity & Leverage Market Capitalization Reconciliation in millions Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 and Units in thousands CCLP Consolidated TTM Adjusted EBITDA per Bank Agreement 139.8 136.7 138.5 135.9 129.0…
  54. Scotia Howard Weil Energy Conference – Tetra Technologies Inc. – slide 54
    TETRA Technologies, Inc. CSI Compressco LP March 2016

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