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November 2017 Corporate Presentation – Emerge Energy Services Lp

Emerge Energy Services Lp · Nov 6, 2017 · 30 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. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 1
    Investor Presentation November 2017
  2. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 2
    Agenda I. Strategic Initiatives Update II. San Antonio Transaction Recap III. Appendix www.emergelp.com PAGE 3
  3. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 3
    Competitive Strengths High Quality, Technology Strategically Driven New Located Assets Products Diversified Intrinsic Product Logistics Offering Advantages Trusted Reputation w/ Low Cost Customers and Operating…
  4. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 4
    Accomplishing Our Strategic Initiatives Reduced Costs Expanded 1 3 Sold Fuel Business 5 During Downturn Footprint Implemented lower Received an attractive San Antonio site offers cost mining methods valuation high quality local…
  5. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 5
    Expanding Footprint with Local In-Basin Sands Local inbasin & regional sands have proved effective for certain completion designs and are now approximately 3035% of the frac sand market San Antonio Delivered cost of sand to the…
  6. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 6
    Introducing Technology-Driven Proppants We are excited about our two technology-driven proppant products: our self-suspending SandMaxXTM sand and our dustless SandGuardTM sand. These products have unique properties compared to regular…
  7. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 7
    Building a Comprehensive Logistics Platform Our sand facilities have direct access to four Class One rail lines and can reach all major shale plays in North America on single-line hauls. Logistics Highlights Wide Geographic Presence…
  8. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 8
    Deleveraging Our Balance Sheet We have taken drastic measures to lower our debt burden and improve our liquidity, which have positioned us well for the current recovery in the market. We are also currently in the market to refinance…
  9. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 9
    Financial Performance Estimates During the downturn, we undertook substantial corrective actions to improve the competitive positioning of our business. Now we are estimating significant improvements in volume and Adjusted EBITDA for…
  10. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 10
    Capitalizing on a Strong End Market: Robust Demand for Frac Sand Estimates from Wall Street analysts indicate 2017 sand demand will surpass historical peak levels. The current recovery in the sand market is being driven by increased…
  11. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 11
    Agenda I. Strategic Initiatives Update II. San Antonio Transaction Recap III. Appendix www.emergelp.com PAGE 12
  12. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 12
    Introduction to the San Antonio Plant Located 25 miles south of San Antonio, TX 650 total owned acres (surface and sand mineral Property Details rights) Estimated over 80 million(1) tons of sand resources Wet plant: 600k tons…
  13. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 13
    San Antonio Plant: Best in Class Business Model High quality reserves Large property and deposit In-basin location Dual rail service Minimal overburden All production operations located on site (avoids trucking) Owned reserves…
  14. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 14
    Growing Demand for Frac Sand in Eagle Ford Basin While the Permian basin receives most of the attention, activity in the Eagle Ford basin, the second most active shale play, is gaining momentum with several notable operators in the…
  15. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 15
    San Antonio Plants Strategic Location Major drilling activity is clustered in South and West Texas Overview Most of the Eagle Ford activity is within 40100 miles of the plant for direct to wellhead trucking Closest largescale…
  16. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 16
    Industrial Sands End Market Central Texas (San Antonio and Austin metro areas) is one of the fastest growing regions in the country Approximately 4.5 million residents estimated as of 2016 Our San Antonio plant currently…
  17. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 17
    San Antonio Plant Expansion Plan Phase 1 Phase 2 Phase 3 4,000 Frac Sand Production Cumulative Capacity (000 tons per year) 600 300 Timing Completed in July Received permit in July Given strong market Considerations…
  18. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 18
    Attractive Valuation for In-Basin Sand Acquisition ( in mm's, except per EMES San ton metrics) Competitor A Competitor B Competitor C Antonio Site (1) (2) Announced Purchase Price 20 145 275 214 (3) (1) (4) Est. Capex for Plant…
  19. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 19
    Expanded Footprint and Balanced Mix The San Antonio site provides a more balanced footprint with a diversified mix of northern white and inbasin sands. Before San Antonio After San Antonio Reserves(1) Inbasin 26% Inbasin…
  20. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 20
    Agenda I. Strategic Initiatives Update II. San Antonio Transaction Recap III. Appendix www.emergelp.com PAGE 21
  21. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 21
    Summary Quarterly Performance in thousands, except per ton 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Continuing Operations: Total Tons Sold (tons in 000's) 1,480 1,392 1,251 826 493 399 439 581 Revenue 103,215 82,602 75,344 42,619 31,285…
  22. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 22
    Oil Price Breakevens by Basin Breakeven oil prices for most US shale plays are below the current WTI price. Several plays including areas in the Permian basin, Eagle Ford, and MidCon remain viable with WTI in the mid to high 30s.…
  23. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 23
    Management and Board of Directors Years of Name Title Professional Experience Senior Management Team Rick Shearer Chief Executive Officer of EMES; CEO of SSS 43 Warren B. Bonham Vice President of EMES 32 Deborah Deibert Chief…
  24. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 24
    MLP Structure Historical Earned Distributions per Unit 1.50 1.38 1.41 1.25 1.13 1.17 1.00 1.00 1.00 0.86 (1) 0.70 0.67 0.75 0.50 0.25 0.00 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q (1) Fullquarter results…
  25. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 25
    From Mine to Railcar 1) Extract 2) Wash 3) Dry 4) Ship www.emergelp.com PAGE 26
  26. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 26
    Asset Summary Wet Plant Location Proven Recoverable Primary Reserve Plant Capacity 2016 Production Reserves (1) Composition (Thousands of Tons) (Thousands of Tons) New Auburn, WI 15.5 mm tons 14-60 mesh 2,000 - Thompson Hills, WI…
  27. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 27
    North American Sand Markets We have single-line access to four Class One railroads, which provide direct rail access to every major basin in North America National Network BNSF CN/GTW CP/SOO CSX /NS KCS/KSCSM UP Basin…
  28. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 28
    Consolidated Net Income to Adjusted EBITDA Reconciliation in thousands 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Net income 5,014 (6,082) (11,390) (20,775) 5,117 (22,897) (34,215) (9,888) Depreciation, depletion and amortization 6,078…
  29. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 29
    Consolidated Adjusted EBITDA to Operating Cash Flow Reconciliation in thousands 2017 2016 2015 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Adjusted EBITDA 18,743 7,534 68 (10,648) (8,113) (9,080) (9,513) 3,853 Interest expense, net (4,169) (3,975)…
  30. November 2017 Corporate Presentation – Emerge Energy Services Lp – slide 30
    Guidance: Net Income to Consolidated Adjusted EBITDA ( in millions) Full Year 2017 2018 Low 2018 High Net Income (13.0) 97.0 115.0 Interest expense, net 17.0 18.0 19.0 Depreciation, depletion and amortization 23.0 23.0 24.0…

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