Select Water Solutions, Inc. · NYSE:WTTR
Select Water Solutions — Select Energy Services — Credit Suisse 24th Annual Energy Summit 2019
25 slides from Select Water Solutions's conference presentation, Feb 11, 2019
Slide 1: Select Energy Services, Inc.
Select Energy Services, Inc. Credit Suisse 24th Annual Energy Summit | February 10-13, 2019
Slide 2: Disclaimer Statement
Disclaimer Statement Cautionary Statement Regarding Forward Looking Statements This presentation, including the oral statements made in connection herewith, contains certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securitie
Slide 3: Select's Value Proposition
Select’s Value Proposition Market Leading Pure Play in Large, Growing Water Market Highly Differentiated Capital Discipline with Technology and Strategic Strong Cash Flow Infrastructure Generation Capabilities 3
Slide 4: U.S. Shale: Best Solution to Global Oil Demand Growth
U.S. Shale: Best Solution to Global Oil Demand Growth IEA Projected Future Oil Supply/Demand Balance 105 Global energy demand is estimated to grow 25% to 2040 100 U.S. shale will need to add >10 million Bbl/d to 95 meet estimated demand growth 90 ~34 million Bbl/d MMBbl/d 85 supply/demand gap by 202
Slide 5: Water Market Growing in Size and Complexity
Water Market Growing in Size and Complexity 2019 U.S. Water Market Estimated to be $20-$25 Billion1 5% 8% 30% Injection Disposal 10% Post Frac Water Hauling U.S. water Water Storage market growing Water Treatment with continued Water Acquisition 11% shale production Water Transfer Frac Flowback grow
Slide 6: Select Energy Services – Company Snapshot
Select Energy Services – Company Snapshot Segment Overviews 9M18 Revenue by Segment1 14% Leading provider of total water solutions to the U.S. unconventional oil and gas industry Water Solutions 16% Water Comprehensive water solutions extending Oilfield Chemicals from sourcing to disposal Soluti
Slide 7: Strategic Infrastructure Project: Northern Delaware Pipeline Project
Strategic Infrastructure Project Northern Delaware Pipeline Project Select recently announced the commencement of a new ~$25 million permanent pipeline infrastructure development in Eddy and Lea Counties in New Mexico □ Operations commencing by 3Q19 □ Complements existing GRR infrastructure □ Init
Slide 8: Growth in Financial Performance & Liquidity
Growth in Financial Performance & Liquidity Quarterly Revenue1 Financial Performance Commentary1 $450 4,000 $400 ($ in millions) $374 $376 $393 $397 Efficiency, execution and pricing improvements $355 3,500 $350 have led to increased profitability, even as labor $300 3,000 and equipment markets re
Slide 9: Robust Cash Flow Generation with Room to Expand
Robust Cash Flow Generation with Room to Expand 9M18 Cash Flow from Operations exceeded Net Capex by ~$25 million1 $80 ($ in millions) $60 $40 $67.0 $60.2 $53.4 $19.3 $20 $4.2 $1.0 $0 ($6.7) ($18.2) ($31.1) ($20) ($41.0) ($31.0) ($40) ($28.1) ($60) ($80) 1Q18 2Q18 3Q18 Op Cash Flow Pre-WC Change in
Slide 10: Industry Leading Customer Base in Every Basin
Industry Leading Customer Base in Every Basin Top Water Solutions Customers Top Oilfield Chemicals Customers Expertise/technology allow Select to provide solutions to meet the ever growing complexity of leading edge customers 10
Slide 11: Differentiation through Technology
Differentiation through Technology Technology Capability Differentiated Results • Operational visibility AquaView® monitoring & • Data collection measurment • Quality control • Decreased OpEx AquaLogic™ automation • Increased HSE safeguards systems • Improved operational control • Provides flexible
Slide 12: Strategic Infrastructure
Strategic Infrastructure With 10+ years of operations, Select has the relationships, the asset portfolio and the balance sheet to support the ever increasing scale and complexity of the water needs of our customers with high-return, long-lived infrastructure developments • ~1.85 billion barrels of
Slide 13: Growth Opportunities in Services
Growth Opportunities in Services • Margin enhancement through increased Margin operational efficiency Enhancement • Investments to reduce labor and expand higher- capacity equipment • Enhanced technological innovation with focus on Technological equipment automation and data capture Innovation • Con
Slide 14: Growth Opportunities in Both Pre-Frac and Post-Frac Infrastructure
Growth Opportunities in Both Pre-Frac and Post-Frac Infrastructure • Continuing to evaluate multiple organic projects that involve the development of fixed infrastructure connecting both: Water - Strategic water sources to E&P operator activity Infrastructure - Producing wells to disposal and recycl
Slide 15: Strategies to Maximize Value Per Share
Strategies to Maximize Value Per Share Operational excellence and innovation/technical achievements Maximizing Free Cash Flow Disciplined approach to growth, achieve strong returns through cycles Maintain a strong balance sheet Return excess capital to shareholders 15
Slide 16: Select's Value Proposition
Select’s Value Proposition Market Leading Pure Play in Large, Growing Water Market Highly Differentiated Capital Discipline with Technology and Strategic Strong Cash Flow Infrastructure Generation Capabilities 16
Slide 17: Appendix
Appendix 17
Slide 18: Select Corporate Profile
Select Corporate Profile Select Corporate Profile1 Listing and Ticker Symbol NYSE: WTTR Recent Share Price $8.92 Market Capitalization ~$952M Enterprise Value ~$1,004M Total Outstanding Shares 106.7M Average Daily Trading Volume 661,173 (last 3 months) Headquarters Houston, TX Note: 1. Share price
Slide 19: Market Leading Comprehensive Water and Chemical Solutions Company
Market Leading Comprehensive Water and Chemical Solutions Company Completions-Oriented Activities Production-Oriented Activities ~90% of Revenue1 ~10% of Revenue1 Temporary Post-Frac Water Treatment/ Transfer Recycling Flowback / Water Water Pre-Frac Hydraulic Fluids Production Well Sourcing Contain
Slide 20: Water Represents a Critical, but Lower-Cost Input to the Frac
Water Represents a Critical, but Lower-Cost Input to the Frac, with Less Price Volatility • Secular trends driving demand for increasingly complex and sophisticated water solutions • Water is a critical component of a successful well completion, but a relatively small % of the overall well completio
Slide 21: Select is a Proven Partner Meeting the Complexity Demanded in Today's Oilfield
Select is a Proven Partner Meeting the Complexity Demanded in Today’s Oilfield Technology Scale Expansive suite of remote monitoring and Largest water solutions service provider in the automation technologies within our oil and gas industry AquaView portfolio Comprehensive service offerings ac
Slide 22: Growth in Permian Drilled but Uncompleted Wells
Growth in Permian Drilled but Uncompleted Wells Supports Future Growth in Completions Activity U.S. Drilled but Uncompleted (DUC) Well Inventory: Last 2 Years 9,000 8,000 7,000 Total U.S. +57% 6,000 5,303 wells to 8,594 5,000 4,000 3,000 2,000 Permian +194% 1,000 1,276 wells to 4,048 - Mar 2017 Nov
Slide 23: Scalable and Reliable Water Sourcing and Logistics Are Critical
Scalable and Reliable Water Sourcing and Logistics Are Critical to Unconventional Production Evolution of the Oil & Gas Industry’s Approach To Water Emerging Pre - 2008 2008 - 2010 Current Multi-Well Pad Conventional Vertical Early Horizontal Leading Edge Horizontal Development Frac Water per ~15,00
Slide 24: Select Legal & Ownership Structure
Select Legal & Ownership Structure Crestview & Other Legacy Crestview Public Owners SCF Partners Owners Partners Class B Shares Class A Shares Class A Shares Class A Shares (24.4% of Voting (56.8% of (3.6% of Voting (15.2% of Voting Power) Voting Power) Power) Power) Ownership Summary1 24.4% Select
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Select Energy Services, Inc. 2016 2017 2018 ($ in millions) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net Income/(Loss) ($228) ($35) ($25) ($12) ($10) $3 ($15) $16 $25 $31 Taxes 0 0 (1) 0 (0) (0) (1) 0 1 1 Interest Expense 4 4 4 1 1 0 5 1 0 1 Depreciation and Amortization 27 22 22 22 23
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