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Merger with Rockwater Energy Solutions – Select Energy Services

Select Energy Services · Jul 26, 2017 · 19 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. Merger with Rockwater Energy Solutions – Select Energy Services – slide 1
    Merger with Rockwater Energy Solutions July 2017
  2. Merger with Rockwater Energy Solutions – Select Energy Services – slide 2
    Strategic Rationale for Combination A combination of Select and Rockwater has compelling industrial and financial logic Further strengthens the leading water solutions company in all service lines across all geographies Both companies…
  3. Merger with Rockwater Energy Solutions – Select Energy Services – slide 3
    Combination of Highly Complementary Businesses Accretive for Merger expected to be meaningfully accretive to Selects EPS, CFPS and EBITDA per share in Shareholders 4Q17P, 2018P and 2019P before any contribution from synergies…
  4. Merger with Rockwater Energy Solutions – Select Energy Services – slide 4
    Rockwater: A Leading Water Services & Oilfield Chemicals Company Leading provider of comprehensive water management solutions and complementary chemical products Presence in many of the most active unconventional plays in North…
  5. Merger with Rockwater Energy Solutions – Select Energy Services – slide 5
    Strong Strategic Fit Pre-Frac and Well Testing Activities Directly Tied to Well Completions Flowback, Water Hauling and Disposal Activities Temporary Post-Frac Water Water Transfer Treatment Water Water Pre-Frac Hydraulic…
  6. Merger with Rockwater Energy Solutions – Select Energy Services – slide 6
    Complementary Product and Service Offerings Combination will enhance Selects position across multiple business lines % of Pro Forma % of Pro Forma Business Line Select Rockwater Q2 '17 Revenue Q2 '17 EBITDA Water Sourcing Water…
  7. Merger with Rockwater Energy Solutions – Select Energy Services – slide 7
    Differentiated Oilfield Chemicals Franchise Rockwater develops, manufactures and provides a full suite of chemicals utilized during the well completion and production process, providing exposure to completions intensity as well as…
  8. Merger with Rockwater Energy Solutions – Select Energy Services – slide 8
    Attractive Relative Valuation Ratio of Enterprise Value to Tangible Adjusted Book Value 5.0x 4.9x 4.0x 3.0x 2.6x 2.6x 2.3x 2.2x 2.0x 2.0x 1.0x 0.0x Rockwater Pro Forma Select Frac Sand OFS Chemicals SMID-Cap…
  9. Merger with Rockwater Energy Solutions – Select Energy Services – slide 9
    Q2 2017 Preliminary Financial Results ( in millions) Strong Q2 results for both companies driven by continued ramp in completions activity, with significant momentum heading into the third quarter Strong incremental margin growth…
  10. Merger with Rockwater Energy Solutions – Select Energy Services – slide 10
    Expansion of Earnings Base and Capacity ( in millions) Q2 17P Annualized EBITDA (Wall Street Consensus Estimates, Except WTTR; Pro Forma excluding synergies) 400 346 303 300 200 172-180 163 148 112 104-108 99 91 89 100 78 73…
  11. Merger with Rockwater Energy Solutions – Select Energy Services – slide 11
    Revenue Mix and Geographic Diversification Select Revenue By Business Segment Select Revenue By Region Select Standalone Q2 2017 Pro Forma Combined Q2 2017 Pro Forma Combined Q2 2017 Total Revenue: 133 Million Total Revenue: 312…
  12. Merger with Rockwater Energy Solutions – Select Energy Services – slide 12
    Complementary Customer Relationships Blue-chip customer base with very complementary overlay across all service lines and geography No customer to represent more than 6.8% of the combined companys estimated pro forma revenue for 1H17…
  13. Merger with Rockwater Energy Solutions – Select Energy Services – slide 13
    Strong Combined Management Team Corporate headquarters in Corporate Leadership Houston, Texas Water Solutions headquarters in Gainesville, Texas Executive Leadership Adam Law Gary Gillette Eric Mattson Justin Briscoe Senior…
  14. Merger with Rockwater Energy Solutions – Select Energy Services – slide 14
    Financially Compelling Transaction Stock-for-stock transaction enables all stockholders to participate in future upside Pro forma ownership1: 64.4% Select and 35.6% Rockwater Select maintains a strong, unlevered pro forma balance…
  15. Merger with Rockwater Energy Solutions – Select Energy Services – slide 15
    Significant Earnings Capacity & Growth Potential The pro forma combined companies generated 2.1 billion of revenue and 322 million of Adjusted EBITDA in 2014 Select and Rockwater have invested over 350 million in combined capital…
  16. Merger with Rockwater Energy Solutions – Select Energy Services – slide 16
    Balance Sheet and Liquidity Provides Flexibility Best-in-class balance sheet with significant liquidity and attractive public currency Upsized credit facility allows financial flexibility for large scale infrastructure development…
  17. Merger with Rockwater Energy Solutions – Select Energy Services – slide 17
    Strategic Rationale for Combination A combination of Select and Rockwater has compelling industrial and financial logic Further strengthens the leading water solutions company in all service lines across all geographies Both companies…
  18. Merger with Rockwater Energy Solutions – Select Energy Services – slide 18
    Appendix: Non-GAAP Reconciliation 19
  19. Merger with Rockwater Energy Solutions – Select Energy Services – slide 19
    Non-GAAP Reconciliation Select Energy Services Year Ended December 31, 2017 ( in millions) 2014 2015 2016 Q2 (Low) Q2 (High) Net Income/(Loss) 2 (82) (311) (12) (11) Taxes 1 0 0 1 1 Interest Expense 17 14 16 0 0 Depreciation and…

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