NYSE: CELP Peter C. Boylan III Chairman & CEO Les Austin Vice President & CFO Capital Links 2nd Annual Master Limited Partnership Investing Forum March 5, 2015 Confidential
CYPRESS ENERGY PARTNERS (CELP) OVERVIEW Serves Energy Companies Water & Environmental Services (W&ES) Pipeline Inspection & Integrity Services (PI&IS) You can not produce oil or natural gas without producing You can not deliver…
CELP VISION & LONG TERM STRATEGY Build a great diversified MLP focused on long term growth We have a broad IRS private letter ruling (PLR) that provides for wonderful diversification opportunities and expansion into some areas that…
CELP GROWTH OPPORTUNITIES BROAD PLR Qualifying Income Under Existing Private Letter Ruling Removal, treatment, recycling & disposal of flowback and produced water. (SWDs, transportation, pipelines, etc.) Removal, treatment,…
CUSTOMERS AND REVENUE Water & Environmental Services Pipeline Inspection & Integrity Services (W&ES) (PI&IS) We serve over 50+ customers including dozens of blue chip TIR has over 60+ clients in North America and majority are…
LEADER IN INDEPENDENT INSPECTION Strong long-term relationships with customers and inspectors Average TIR Inspector Headcount Per Quarter Num 2011 2012 2013 2014 Proprietary database of 12,000+ inspectors 1,745 1,800 1,667 Serve…
COMPETITIVE LANDSCAPE Water & Environmental Services Pipeline Inspection & Integrity Services (W&ES) (PI&IS) Certain producers with private SWD In-house personnel facilities serving own production Engineering & construction (E&C)…
PIPELINES ARE ESSENTIAL FOR OUR ENERGY SUPPLY You must inspect pipelines regularly pursuant to various state and federal laws. The U.S. has millions of miles of pipelines & gathering systems and continues to build more to support the…
INSPECTION DEMAND DRIVERS AND TRENDS 1. Substantial existing infrastructure is aging 2014-2035 Infrastructure Investment(2) (U.S. Dollars in Billions of 2012) 2.3+ million miles of transmission and Western, Arctic, 1 distribution…
LIQUID PETROLEUM PIPELINES More than 190,000 miles of liquid petroleum pipelines traverse the United States. They connect producing areas to refineries and chemical plants while delivering the products American consumers and businesses…
NATURAL GAS PIPELINE NETWORKS The U.S. natural gas pipeline network is a highly integrated transmission and distribution grid that can transport natural gas to and from nearly any location in the lower 48 States. The natural gas…
PIPELINE INSPECTION & INTEGRITY SERVICES Regulations require pipeline operators to develop integrity management programs and conduct inspections, with operators outsourcing elements In-line Inspection Smart pigs Pig tracking…
NON-DESTRUCTIVE EXAMINATION (NDE) State-of-the-art new digital NDE automated pipe scanner and analysis technology 5x + faster than previous technology utilized by competitors. Hand scanner 50X faster than prior tools. 14 Confidential
AGING U.S. PIPELINE INFRASTRUCTURE U.S Pipeline Age Distribution by Date of Aging U.S. oil & gas pipeline infrastructure will Installation drive demand for pipeline services. 60% Nearly 60% of the United States pipelines are over…
CYPRESS OWNED SWD FACILITIES (1) 9 Owned ND Facilities SWD facility SWD facility with piped water 2 Owned TX Facilities Mountrail County, ND Facility (2 Wells) Opened June 2012 4,000+ feet deep SWD injection zone 2 well…
SWD FACILITY OVERVIEW(1) Subsurface injection deep into the earth away from drinking water at an SWD facility is industry standard method of saltwater disposal EPA Class II injection wells have multiple layers of protection in design…
WATER & ENVIRONMENTAL SERVICES Production of Oil/Gas Water Fracturing Fracturing Well Completion And Saltwater Acquisition Fluid Mixing Fluid Injection Flowback: up to 47% of injected water within 10 days(1) Flowback Water…
INCREASING DISPOSED VOLUMES Cypress first SWD facility began service in June 2011 Disposed saltwater volumes have increased from 0.6 million barrels in Q3 2011 to as high as 5.5 million barrels in Q3 2014 Cypress Disposed Volumes Of…
CELP GROWTH OPPORTUNITIES Organic Growth And Existing Opportunities Penetrate new pipeline inspection customers and increase share of spending with existing Grow our non-destructive examination (NDE) services with existing and new…
IPO SUMMARY JANUARY 21ST, 2014 Company: Cypress Energy Partners, L.P. (NYSE: CELP) Common units sold: 4,312,500 units ( 4.5x oversubscribed) Offering size: 86.25 million IPO Price per unit: 20.00 (Yield of 7.75%); Current Yield 8.65%…
TIR DROPDOWN OVERVIEW CELP previously had full control of all TIR entities but only owned 50.1% of equity and 58% of DCF. CELP public credit facility previously supported 100% of TIR and had all of its collateral Given GAAP…
CONSOLIDATED CELP FINANCIAL PERFORMANCE: 3 MONTHS ENDED W&ES Summary PI&IS Summary(1) 10 10 2,000 Avg. of Inspectors 200 Average Number of Inspectors Disposed Saltwater (MMBbl) Revenue (Dollars in Millions) 9 Disposal…
FINANCIAL FLEXIBILITY CREDIT FACILITY Credit Facility of 200 MM (Amended 10/21/14) CELP Capitalization Arrangers: Deutsche Bank, BMO (U.S. Dollars In Thousands) 75 MM Borrowing Base Facility & September 30, 2014 125 MM Acquisition…
TIR EBITDA TO DCF RECONCILIATION Per our Omnibus Agreement, the 49.9% owners previously absorbed additional costs (subsidies) benefiting CELP, including: 1) Incremental interest expense for credit facility use 2) 100% of the non-cash…
THANK YOU Independent Cypress/TIR inspection team High quality new SWD & has integrity business significant facilities in active U.S. serving industrylarge pipeline experience oil & gas producing owners and of North…
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