Emerge Energy Services LP Investor Presentation November 2014 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) Diversified 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 1.3 billion of capital under management Currently deploying Fund III Strong track record of delivering investor returns Invests in middle market companies in asset intensive…
Investment Considerations High Quality, Stable Strategically Cash Flow Located Assets Significant Intrinsic Organic Logistics Growth Advantages Capacity Strong Reputation w/ Low Cost Customers and Operating…
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 and solid relationships with creditworthy counterparties…
SAND SEGMENT www.emergelp.com PAGE 8
Proppants & Hydraulic Fracturing Frac sand, or proppant, is used to prop open fissures in hydraulic fracturing Demand expected to continue its strong growth into the near future Hydraulic Fracturing 2013 US Land Proppant…
Sand Market Overview As a top Tier 1 supplier, SSS is well-positioned in todays market Demand is increasing faster than high quality supply Major Dynamics Logistics capabilities are no longer a competitive advantage but a necessity…
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…
Competitive Advantages Emerge sand exceeds API and customer specs Over 60% of Emerges Northern White sand is a mesh size of 50 or larger Quality of Sand One of only four companies with commercial quantities of 16/30 sand Fully…
From Mine to Railcar Extract Wash Dry Ship www.emergelp.com PAGE 13
Our Assets An Overview 87.7 million tons of Northern White silica sand Ideal for crude oil and liquids-rich natural gas extraction from unconventional plays High Quality Proved reserves of 65-mesh or larger; additional 70 to 100-mesh…
Not All Sands Are Created Equal Native Angular Sand Northern White Sand Glass Shards and Little Rocks from Barron Uncultured Pearls www.emergelp.com PAGE 15
Sand Asset Summary Proven Primary Reserve Depth of Lease Expiration Mine Area Plant Capacity Wet Plant Location Recoverable Composition Reserve (Feet) Date (Acres) (Thousands of Reserves (1) Tons) New Auburn 20.0 mm tons 14-60 mesh…
Pro Forma Operations Process Flow Thompson Hills FLS/Arland LP Mine Church Road Barron Arland New Auburn New Auburn Independence Independence Kosse Kosse www.emergelp.com PAGE 17
North American Sand Markets By early 2015, EMES expects to have single-line access to four Class One railroads, which will provide direct rail access to every major basin in North America National Network BNSF CN/GTW CP/SOO…
Diversified Sales Portfolio Sales by Basin Sales by Customer Eagleford Permian Marcellus Canada Cust A Cust B Cust C Cust D Bakken Haynesville MidCon Rockies Cust E Cust F Cust G Cust H Barnett Other Cust I Cust J Cust K Other…
Able to Weather the Storm Despite lower oil prices, customer demand and pricing both remain strong SSS was built from the ground up to thrive throughout the cycle High-quality, coarse Northern White sand The first sand in, and the…
Sand Segment Growth Opportunities Emerge has 8.2 million tons per year under contract with an average life of 4.2 years Contracts and In negotiations for additional tons through multi-year, fixed Customers price/volume contracts,…
FUEL SEGMENT www.emergelp.com PAGE 22
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…
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…
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…
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 28
Recent Financial Results Unaudited Financial Results for Emerge Three Months Three Months Three Months Three Months Ended Sep 30, Ended Jun 30, Ended Mar 31, Ended Dec 31, 2014 2014 2014 2013 Revenue 296,338 298,273 274,081 246,030…
Pro Forma Capitalization EMES has a 350 million revolver with an undrawn revolver capacity of 125 million EMES Capitalization as of September 30, 2014 ( in millions) Cash (Unrestricted) 3.4 Revolving Line of Credit 189.0 Other…
Selected Historical Sales Volumes Sand Sales by Quarter Fuel Sales by Quarter Tons of Sand Thousands of Gallons 700,000 80,000 600,000 70,000 60,000 500,000 50,000 400,000 40,000 300,000 30,000 200,000 20,000 100,000 10,000…
Key Investment Highlights High Quality, Coarse reserves, state of the art facilities, and prime access to multiple Class One railways Strategically Flexible logistics network of transload sites in key basins Located Assets Fuel assets…
Closing Thoughts Frac sand demand is booming and well outpacing supply Emerge Energy has become a leader in the market because of high quality assets, customer relations, customer service, and logistical capabilities Emerge Energy…
APPENDIX www.emergelp.com PAGE 34
Management and Board of Directors Years of Industry Name Title Experience Senior Management Team Rick Shearer Chief Executive Officer of EMES; CEO of Sand Division 40 Warren B. Bonham Vice President, Fuel; President of Fuel Division…
Non-GAAP Reconciliation The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measures for each of the periods indicated. Three Months Three Months Nine Months Nine Months…
Emerge Energy Services LP Investor Presentation November 2014 www.emergelp.com PAGE 37
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