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SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol

Fairmount Santrol · Mar 24, 2015 · 26 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. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 1
    Scotia Howard Weil 43rd Annual Energy Conference Jenniffer Deckard, President and Chief Executive Officer Christopher Nagel, Chief Financial Officer March 24, 2015
  2. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 2
    2014 Volumes by Segment Oil & Gas Proppant Solutions Product Lines Include: Northern White Frac Sand Texas Gold Frac Sand (mined in Voca, TX) Resin-Coated Frac Sand Self-Suspending Proppant Technology, Propel SSP Industrial &…
  3. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 3
    Leading Solutions Provider Differentiated in Every Area of the Value Chain COMMITMENT TO People SUSTAINABLE Planet DEVELOPMENT Prosperity 808 million tons of proven mineral reserves OPERATIONAL 11 sand processing facilities with…
  4. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 4
    We Are Built on a Foundation of Sustainable Development PEOPLE PLANET PROSPERITY Conducted four enterprise-wide 18 Zero Waste Facilities SD Pays: Validated savings of Appreciative Inquiry Summits with 4.2MM in 2014 1,300…
  5. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 5
    Leading Capacity Positions in the Largest Proppant Categories 2 POSITION IN RAW FRAC SAND CAPACITY 1 POSITION IN RESIN-COATED SAND CAPACITY 2014 CAPACITY (MM TONS) 2014 CAPACITY (MM TONS) 16.0 3.0 14.0 2.5 12.0 2.0 10.0 8.0…
  6. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 6
    The Industrys Largest Operations and Distribution Footprint Comprehensive Logistics Platform and Vertically Integrated Operations with Access to Every Major U.S. Oil & Gas Basin International Operations Manufacturing Footprint…
  7. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 7
    Our Product Portfolio Addresses 95% of the Proppant Market 2014 PROPPANT MARKET SHARE (%) (1) FMSA VOLUME MIX (2) CERAMICS (4%) (3) RAW FRAC SAND (89%) RESIN-COATED SAND (7%) Raw Frac Sand 80% Resin-Coated Sand…
  8. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 8
    Unique Position in Coated Products with Barriers to Entry Pioneered development of resin coating in 1976 Resin-Coating Captive Captive Resin PATENTED Proprietary new products involve patented IP, especially at Capacity (1) Sand Source…
  9. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 9
    Suite of Product Solutions for Well Environment Complexity FAIRMOUNT SANTROL PROPPANTS VS. CLOSURE PRESSURE (1) ADDED VALUE Eliminate Reduce Embedment Flowback Fines HyperpropC PowerPropP OptiProp G2C THSP Super DCC CoolsetC…
  10. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 10
    Acceleration of Horizontal Proppant Demand Continues and Will Offset Some of the Impact of Rig Declines Proppant Robust Proppant Demand Driven by Multiplier Effect Demand Wells per Rig Proppant Per Well (000 Tons) 10.0 6.5 6.0…
  11. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 11
    Current Market Environment: Rig Count Declines Average drilling rig counts have already declined by 40% from Q4 2014 Active rigs Average number of rigs for quarter -38% 2015 forecasts 55 WTI 1,779 1,852 1,903 1,912 1,500 1,552 1,192…
  12. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 12
    Current Market Environment: Reducing Customer Costs per BOE Premium API Spec Sand Expansive Logistics Network FMSA Well Positioned to Reduce Customer Costs per Barrel of Oil Equivalent (BOE) Technology Portfolio and Gain Share…
  13. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 13
    100% of FMSA Sand Meets API and Customer Specifications CAPACITY BY TIER (1) KEY FRAC SAND - API REQUIREMENTS 100.0 Tier 1 and Tier 2 sand fall within API and 90.0 customer specifications for: 80.0 Crush 70.0 Percent of…
  14. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 14
    Expansive Logistics Network Lowers Proppant Cost for our Customers Unit 14 Origins Optimized Trains, Cost In- Lower Cost 42+ Barges Terminals Basin per BOE Reduced 42+ Last-Mile Terminals Trucking Costs
  15. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 15
    Curable Resin-Coated Sand Further Lowers Production Cost per BOE Lower Cost per BOE NPV of Increased Production from Less Downtime 14,000 NPV of Lower Material Cost 100,000 NPV of Fewer Workovers (Well Failures) 21,000 Subtotal,…
  16. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 16
    Propel SSP Lowers Production Cost per Barrel of Oil Equivalent (BOE) Lower Cost Utica: 6-Well Study per BOE 700,000 40% Cumulative Production (BOE) 600,000 35% No Fluid Less 30% Sweep Water 500,000 25% % Increase…
  17. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 17
    Scale and Flexibility to Facilitate Vendor Consolidation ACHIEVABLE = PERMITS + RAIL CARS + TERMINAL CAPACITY MM TONS 12.9 9.9 200MM+ 8.8 3.0 RAW FRAC SAND RESERVES PROCESSING Under Active 2.8 Development 0.0 2009 SEPT…
  18. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 18
    We Have a Long and Sustained History of Trusted Partnership with Our Customers LONG-TERM CUSTOMER PARTNERSHIPS STRONG, DIVERSE AND BALANCED CUSTOMER BASE Selected Direct Customers Serving the major Oil Field Service companies since…
  19. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 19
    Strong 2014 Financial Performance 2014 RESULTS IN THOUSANDS, EXCEPT PER SHARE DATA 2014 2013 % Change Proppant Volume (tons) 7,188 5,117 40% Revenue 1,356.5 988.4 37% EBITDA 368.1 248.9 48% Adj. EBITDA 397.3 292.6 36% Diluted EPS 1.02…
  20. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 20
    Strong Cash Flow Supports Current Capital Structure MM, UNLESS OTHERWISE NOTED 2014 2013 Committed to a strong and stable Cash and Cash Equivalents 76.9 capitalization profile Debt (net of original issue discount) Cash flow…
  21. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 21
    Short-Term Fairmount Santrol Strategic Initiatives Reduce costs and maximize our efficiencies and effectiveness in our raw and value-added coated products supply chain Continue to be the most cost-effective solutions provider for our…
  22. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 22
    We Have a Long History of Managing Through Industry Cycles While Successfully Investing for Growth REVENUE 1890s: Fairmount Santrols (MM) predecessor companies begin 1,400 operations 1,200 1,000 1976: Pioneered the first…
  23. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 23
    The Leading, Fully Integrated Proppant Solutions Producer Leading Proppant Producer; Broadest Product Suite Industrys Largest Captive Terminal Footprint and Broadest Logistics Capabilities Focus on Innovation and New Product…
  24. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 24
    Questions & Answers 24
  25. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 25
    Reconciliation of Non-GAAP Financial Measures 25
  26. SCOTIA HOWARD WEIL 43RD ANNUAL ENERGY CONFERENCE – Fairmount Santrol – slide 26
    Reconciliation of Non-GAAP Financial Measures 26

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