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EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P.

Blueknight Energy Partners, L.P. · Aug 14, 2017 · 35 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. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 1
    AUGUST 2017 Investor Presentation The smart move for terminalling and transportation (NASDAQ: BKEP & BKEPP) Private and Confidential
  2. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 2
    Who We Are Established in 2007; headquartered in Oklahoma City, OK General Partner owned by an affiliate of Ergon, Inc., since October 2016 Diversified, strategically located assets in 26 states Blueknight Energy make us a…
  3. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 3
    Diversified Operations Product Terminalling Crude Oil Logistics Liquid Asphalt Storage, Terminalling & Blending Crude Oil Pipeline Transportation Crude Oil Storage, Terminalling & Blending Crude Oil Trucking & Producer Field…
  4. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 4
    Common and Preferred Units Common Units Preferred Units Market NASDAQ NASDAQ Symbol BKEP BKEPP Outstanding 38,155,434 35,125,202 Yield at 8/10/17 10.2% 9.3% 0.14500/unit for quarter ended 0.17875/unit for quarter ended…
  5. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 5
    Ownership Chart Ergon, Inc. 25.7% Limited Ergon Asphalt & Emulsions, Inc. Partner Interest Ergon Asphalt Holding, LLC 100.0% Ownership Interest Blueknight GP Holding, LLC (DE) 100.0% Ownership Interest Blueknight…
  6. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 6
    Our Partner Private, family-owned company Formed in 1954; based in Jackson, MS Presence in 12 countries worldwide; employs over 2,500 workers globally One of the largest asphalt emulsion marketers in the U.S. Has been a BKEP…
  7. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 7
    Ergon Overview (NASDAQ: BKEP & BKEPP) Private and Confidential 8
  8. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 8
    Operations Map BKEP Stand-Alone Operations Blueknight and Ergon Operations (NASDAQ: BKEP & BKEPP) Private and Confidential 9
  9. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 9
    Business Description (NASDAQ: BKEP & BKEPP) Private and Confidential 10
  10. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 10
    Product Terminalling Services Comprised 92.6% of operating Storage margin for the year ended Blending December 31, 2016 Loading and unloading (including truck, rail, barge Composed of two segments: and ship) Asphalt terminalling…
  11. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 11
    Highly-Contracted Operating Margin Asphalt Terminalling Crude Oil Terminalling Services & Storage Services 16.6% 11.2% 83.4% 88.4% Contracted take-or-pay fixed fee Fixed rate variable volume fee Note: Represents operating…
  12. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 12
    BKEP Earnings Performance vs. WTI Price ( in millions for EBITDA and Distributable Cash Flow; WTI is price per barrel) 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2012 2013 2014 2015 2016…
  13. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 13
    Asphalt Terminalling Services Largest independently owned Multiple loading/unloading options: asphalt terminal network Truck 9.6 million barrels of asphalt Marine and residual fuel oil storage Rail 54 terminals across 26 states…
  14. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 14
    Asphalt Terminalling Services Characteristics of Contracts Base fee/month plus incremental revenue if Rate Structure customer exceeds minimum take or pay volumes Term 510 years Annual CPI adjustment Yes Customer/Facility…
  15. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 15
    State Highway and Infrastructure Funding Trends States that have Successfully Raised Revenue Since 2012 Source: Transportation for America http://t4america.org/maps-tools/state-transportation-funding/ (NASDAQ: BKEP & BKEPP)…
  16. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 16
    U.S. Asphalt Storage and Supply Trends Source: U.S. Energy Information Administration (NASDAQ: BKEP & BKEPP) Private and Confidential 17
  17. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 17
    Crude Oil Terminalling & Storage Services Cushing Interchange 34 tanks with 6.6 million barrels of storage Connectivity and access to all Cushing terminals Capable of receiving and/or delivering 350,000 bpd Third- Third-Party…
  18. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 18
    Crude Oil Crude Oil Pipeline Transportation Services Services Total Length: 670 miles Comprised 7.4% of operating Two primary Oklahoma transportation margin for the year ended pipelines and one smaller West Texas gathering system…
  19. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 19
    Oklahoma Crude Oil Pipelines Oklahoma Pipelines Long-term minimum take- or-pay contract with XTO (approx. 16% of capacity) Capable of transporting approximately 50,000 bpd Condensate pipeline expected to be in service in late…
  20. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 20
    U.S. Unconventional Shale Plays Oil Break- Break-Even Economics Oil break- break-evens assuming 30% BTAX IRRs 53.25 54.05 51.91 44.41 45.93 46.40 MIDLAND SCOOP/STACK DELAWARE EAGLE FORD DJ BASIN BAKKEN Oil sub- sub-play…
  21. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 21
    Oklahoma Resource Break-Even SCOOP/STACK IRR 53% 51% 32% 32% 26% STACK MERAMEC- STACKMERGE SCOOP OIL STACK MERAMEC SCOOP WOODFORD OVERPRESSURED OIL NORMAL- PRESSURED OIL SCOOP/STACK NPV 9.4 7.2 5.8 5.2 4.5 STACK…
  22. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 22
    Strategy & Growth Opportunities (NASDAQ: BKEP & BKEPP) Private and Confidential 23
  23. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 23
    Strategy and Growth Opportunities Recent Activity Completed approximately 150.0 million of acquisitions since May 2015 May 2015 February 2016 October 2016 Asphalt product Asphalt product Nine asphalt product terminal in terminal in…
  24. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 24
    Strategy and Growth Opportunities Product Terminalling Currently evaluating numerous terminalling projects Potential drop-downs from Ergon one each in 2017 and 2018 Third-party terminal acquisitions/new-build Other potential Ergon…
  25. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 25
    Strategy and Growth Opportunities Crude Oil Transportation Completion of Oklahoma SCOOP condensate pipeline by year-end 2017 Recapture volume along our Mid-Continent pipeline and increase the overall efficiency and operating margin…
  26. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 26
    Financial Overview (NASDAQ: BKEP & BKEPP) Private and Confidential 27
  27. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 27
    Consistent Cash Flow Generation How our highly-contracted, fee-based business drives high-growth potential Over 79.3% of operating margin, excluding depreciation and amortization, is contracted Asphalt terminalling segment provides…
  28. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 28
    Consistent Financial Performance Consolidated Operating Margin Adjusted EBITDA (excluding depreciation and amortization) ( in millions) ( in millions) Distributable Cash Flows Leverage Ratio ( in millions) (NASDAQ: BKEP &…
  29. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 29
    Financial Targets Target Leverage Decrease leverage to under 4.0x Target 3.5x over long-term Distribution Policy Maintain 1.0x to 1.1x distribution coverage over long-term Keep conservative approach to distributions Maintain…
  30. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 30
    Investment Considerations (NASDAQ: BKEP & BKEPP) Private and Confidential 31
  31. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 31
    Investment Considerations Financial Profile General Partner Growth Recent acquisition of three third- Consistent profitability and party asphalt terminals and Strong alignment with Ergon earnings nine-terminal contribution from…
  32. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 32
    Unit Performance Chart (NASDAQ: BKEP & BKEPP) Private and Confidential 33
  33. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 33
    Appendix (NASDAQ: BKEP & BKEPP) Private and Confidential 34
  34. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 34
    Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income (NASDAQ: BKEP & BKEPP) Private and Confidential 35
  35. EnerCom The Oil and Gas Conference – Blueknight Energy Partners, L.P. – slide 35
    Operating Margin and Reconciliation to Operating Income (NASDAQ: BKEP & BKEPP) Private and Confidential 36

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