Emerge Energy Services LP Investor Presentation January 2015 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…
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…
SAND SEGMENT www.emergelp.com PAGE 5
From Mine to Railcar Extract Wash Dry Ship www.emergelp.com PAGE 6
Demand / Supply Still Favorable [Despite] new pressure from OPEC . . . U.S. Supply of Northern White continues to be energy companies . . . probably wont slash constrained American oil output anytime soon, experts said Permitting…
Frac Sand Demand Still Growing More Stages Longer Laterals per Well Transition Closer Well More Wells from Vertical Spacing per Drilling to Horizontal Pad Historical & Projected US Land Proppant Demand 160 millions of tons…
Proppant Usage is Expanding Emerge Energys key plays The primary driver has been have increased sand usage increased sand intensity Total Frac Sand Consumption Frac Sand Consumption per Well (mm of pounds) (mm of pounds) 8,000 10.00…
The Strong Are Getting Stronger Taking the Lead Solid Long-Term Sales Customers are gravitating to the top Long-term contracts for 87% of pro 6-8 frac sand producers: forma capacity of 9.4 million tons Consistent high quality and…
High Quality & Low Cost The Right Sand Full Weather Operations Emerge Energy sand exceeds API Fully enclosed dry plants for year- and customer specs round operations, regardless of Over 60% of Emerge Energys weather Northern White…
Diversified Sales Portfolio Sales by Customer Sales by Basin (52 Total Year to Date) 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…
Economics By Basin Emerge Energy focuses on basins with strong economics WTI Oil Breakeven Price ( per Bbl) at 3.60/Bbl Natural Gas 90.00 EMES Focus Plays 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Source: Credit…
Strong Logistics Platform Our Wisconsin sand facilities have advantaged access to three Class One rail lines and can reach all major shale plays in North America Emerge Energy currently has 13 transload locations positioned in…
The Future Is Global As the US shale revolution is transforming hydrocarbon production, Emerge Energy is positioning itself as the supplier of choice Northern White sand is only available in North America, and the coarsest…
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 mid-2015, EMES expects to have single-line access to four Class One railroads, which provides direct rail access to every major basin in North America National Network BNSF CN/GTW CP/SOO CSX /NS…
Sand Segment Growth Opportunities Emerge Energy has 8.2 million tons per year under contract with an average life of 4.0 years Contracts and In negotiations for additional tons through multi-year, fixed Customers price/volume…
FUEL SEGMENT www.emergelp.com PAGE 20
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 26
Recent Financial Results Unaudited Financial Results for Emerge Energy 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…
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…
Our MLP Structure We have a simplified MLP structure All units are Common Units No Incentive Distribution Rights (IDRs) Non-economic General Partner No Minimum Quarterly Distributions (MQD) Our Sponsor, Insight Equity, which owns 30%…
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…
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 We believe we…
APPENDIX www.emergelp.com PAGE 33
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 January 2015 www.emergelp.com PAGE 36
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