CYPRESS ENERGY PARTNERS NYSE: CELP Essential Midstream Services MLPA Invester Presentation June 2nd, 2016
Cypress Energy Partners, L.P. (NYSE: CELP) Overview We strive to be the premier midstream energy services company in markets we service by building strong relationships with our stakeholders including customers, partners, employees,…
All Business Lines Required By Government Regulations Essential Service Required Services Stability, Diversity, Growth W&ES PIS CELP Produced water focus: Occurs Required services: Natural gas, Fixed-fee model: We charge a for…
Investment Highlights Our company was started in 2012 to provide a variety of midstream services Building a Track to energy companies in North America. We completed our IPO in January Record 2014 and exceeded our distribution per unit…
Our Customers - 85% Investment Grade Water & Environmental Pipeline Inspection & Integrity Services 125+ customers in the U.S. 70+ customers in North America a majority are investment grade E&P companies publicly-traded companies -…
PIS A Large and Growing Service Industry 2.1 billion 47,000 miles 1,450 runs 12,000 digs Over 2.1 Bn spent on Over 47,000-miles of Over 1,450 in-line Over 12,000 digs for integrity management liquids pipeline inspection smart pig…
Broad PLR Enhances Our Growth Opportunities Qualifying income under our existing private letter ruling (PLR) Removal, treatment, recycling & disposal of flowback & produced water (SWDs, transportation, pipelines, etc.) Removal,…
Significant Growth Opportunities w/ Supportive Sponsor Our broad PLR allows us to diversify into other businesses: Additional inspection services (ILI, pigging, LIDAR, nitrogen, Acquisitions water & environmental and chemicals)…
PIS The Life Cycle of a Pipeline New Construction Services Current Services Right-of-way acquisitions (limited) Potential Services Barcode scanning New Construction Nitrogen services Water & Solid waste services Chemical cleaning…
PIS Growing Market Dynamics Market Dynamics Pipelines Substantial existing infrastructure is aging 2.3+ million miles of transmission and distribution pipelines plus millions of miles of gathering systems1 60% of U.S. pipelines are…
More Stringent Pipeline Regulations Congress is currently in the process of reauthorizing PHMSA through 2019 o Focuses on completing outstanding mandates from the 2011 reauthorization; stakeholders advocating for limited bill because…
PIS Our Midstream Pipeline Services Inspection Service PI&IS In-line Inspection Federal and some state regulations require pipeline Smart pigs & various ILI technologies operators to develop integrity management programs and Pig…
PIS Pipeline Integrity Management Growth Opportunities Inline Inspection Support Excavation Cleaning Chemical AGM Pig Anomaly Inspection Non-Destructive Repair Pigs Cleaning Survey Tracking Staking Examination Documentation…
PIS Revenue Overview How We Generate Revenue Customers typically pay a daily or weekly rate per inspector and per diem expenses Results driven by the number and type of inspectors performing services and the fees charged Inspection…
W&ES Strategic Footprint Enhances our Position The industry downturn starting in Q4 2014 has had a material adverse impact on our water business given The Bakken and Permian are strategic basins that the sharp decline in overall…
W&ES Essential Midstream Services Oil & gas production produces water & solids that require proper disposal Water Fracturing Well Production of Fracturing acquisition fluid mixing completion oil/gas and fluid injection…
W&ES Facilities Salt Water Disposal Facility 1804 PW Pipeline Chemical Ross Mountrail County, ND Process Gun barrel Saltwater tank Injection tank pump house Unload facility Injection Crew Well Containment quarters Skim…
W&ES Business Overview & Opportunity We charge a fee per barrel mm barrels /bbl 8 1.311.27 1.40 Management fees for third party 7 1.17 1.19 1.13 1.06 1.091.07 1.20 SWD 6 0.920.770.73 1.00 Transportation fees for pipelines 5 0.68…
Rig Count as of 5/20/16 The US rig count was 404, as of 5/20/16, the lowest level on record, according to Baker Hughes data going back to late 1948 US rig count has declined 79%, or 1,527 rigs, since the Sep-2014 peak of 1,931…
645 DUCs Within 15 Miles of Cypress SWDs DUC Backlog by Play vs. Hist. Avg.(1) DUCs: Near Cypress SWD Facilities(2) DUCs: Near Cypress SWD Cum. W/ in (2) Facilities 0 - 5 (mi.) 5 - 10 (mi.) 10 - 15 (mi.) 15 (mi.) DUCs 76 218 351…
History Timeline Initial Cypress Acquired Remaining Acquisitions of SWDs Cypress IPO 49.9% of TIR December 2012 January 2014 February 2015 2012 2013 2014 2015 2016 Cypress Energy Acquired Control of Acquired SWD Acquired 51% of…
Flexible Balance Sheet CELP has a cap X light business model, offering financial flexibility mm Debt balance Debt Capacity Capacity with Accordion 350 300 250 200 130.2 140.9 140.9 140.9 136.9 150 100 75.0 70.0 70.0 75.0…
Recent 5MM in Annual Cost Savings Initiatives We consolidated our Texas operations to reduce both duplication and our Brown Integrity cost structure in response to the material slow-down in offshore hydro- (IS) testing work. TIR…
Historic CELP Adjusted EBITDA, DCF & Operating Income CELP has managed downturn better than many service companies. Inspection & Integrity Services have become dominant portion of companys operating income while Water & Environmental…
Consolidated Financial Performance (1Q16) Update First Quarter 2016 Highlights W&ES Summary Distribution: Q1 distribution of 0.406413 (1.63 MM Bbls Disposal volumes (Ieft axis) mm annualized), total distribution of 4.8 million 5 4.3…
2016 CELP EBITDA to DCF Reconciliation Non-controlling interest activity represents the 49% of Brown Integrity (the IS segment) not owned by CELP as well as the 51% of CF Inspection (a subsidiary within the PIS segment) not owned by…
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