Genesis Energy, L.p. · NYSE:GEL
Genesis Energy, L.p — Investor Presentation (December 2023)
41 slides from Genesis Energy, L.p's investor presentation, December 2023
Slide 1: Genesis Energy, L.P. Investor Presentation
Genesis Energy, L.P. Investor Presentation December 2023
Slide 2: Disclosures & Company Information
Disclosures & Company Information Investor Relations Contact InvestorRelations@genlp.com (713) 860-2500 Corporate Headquarters 811 Louisiana, Suite 1200 Houston, TX 77002 Forward-Looking Statements This presentation includes forward-looking statements as defined under federal law. Although we believ
Slide 3: Why Invest in Genesis?
Why Invest in Genesis? Free Cash Flow Profile Poised to Deliver Increasing Returns to Stakeholders Diverse Portfolio of Long-Lived, Market Leading Businesses with High Barriers to Energy and Significant Operating Leverage Healthy and Improving Balance Sheet Provides Significant Financial Flexibility
Slide 4: Market Leading Businesses / High Barriers to Entry
Market Leading Businesses / High Barriers to Entry Genesis Total LTM Offshore Pipeline Transportation Segment Margin $815 MM(a) • Practically irreplaceable integrated asset footprint focused on transporting crude oil produced from the deepwater Central Gulf of Mexico to multiple onshore markets 37%
Slide 5: Improving Performance and Financial Flexibility
Improving Performance and Financial Flexibility Incremental Cash Flow Around the Corner • Improving the balance sheet and achieving long-term target leverage ratio(a) of 4.00x has been a top priority – 3Q 2023 leverage ratio(a) of 3.92x and currently expect to exit 2023 with a leverage ratio(a) at o
Slide 6: Key Takeaways from 3Q Earnings
Key Takeaways from 3Q Earnings Long-Term Thesis Remains Intact and Positive • Long-term outlook for Genesis remains constructive and unchanged – Excited about the expected ramp in earnings and increased financial flexibility in the coming years • In 2024 we expect to see continued volume growth offs
Slide 7: 2023 Guidance
2023 Guidance Reaffirming Guidance for 2023 • Reaffirming Adjusted EBITDA(a) guidance range for 2023 2023 Financial Guidance – Expect to deliver full year results at or above the midpoint, if not approaching the top end of the range Adjusted EBITDA(a) $725 - $745 million – Results over the remainder
Slide 8: Business Segment Detail
Business Segment Detail Overview
Slide 9: Offshore Pipeline Transportation – Overview
Offshore Pipeline Transportation – Overview World Class Footprint in Leading North American Basin Long-Term Value Creation Historical CHOPS & Poseidon Volumes • Beginning in 2010 with the acquisition of 50% interest in 700 +101% $120 CHOPS, management has acquired an irreplaceable industry 600 $100
Slide 10: Offshore Pipeline Transportation Asset Summary
Offshore Pipeline Transportation Asset Summary Leading Gulf of Mexico Midstream Service Provider • ~2,400 miles of pipelines and associated platforms primarily Deepwater to Shore Crude Oil Pipeline Solutions located in the Central Gulf of Mexico CHOPS Poseidon Eugene Island Odyssey • Leading indepen
Slide 11: Gulf of Mexico Crude Oil Production
Gulf of Mexico Crude Oil Production Continued Growth in the Deepwater Gulf of Mexico Crude Oil Production(a) • Deepwater Gulf of Mexico crude oil production is projected to increase by ~89% from 2013 – 2024E Non-Deepwater Deepwater (>1,000 ft.) Avg. Crude Price (WTI) 2,500 $120 • Production increase
Slide 12: Active Federal Leases in Gulf of Mexico
Active Federal Leases in Gulf of Mexico Proximity to Existing Leases Creates Stability and Opportunity • Inflation Reduction Act of 2022 allows Department of Interior to grant leases, easements and rights-of-way pursuant to the Outer Continental Shelf Lands Act in land areas previous withdrawn from
Slide 13: Central Gulf of Mexico Overview
Central Gulf of Mexico Overview Robust Inventory of Future Growth Ram Powell Petronius Stonefly Delta House Nearly Headless Nick Selected Recent Developments / FIDs Lobster Field Producer First Oil Spruance Katmai / Shenandoah Beacon Late 2024 Bullwinkle Katmai West • Caicos Baldpate Droshky • Khale
Slide 14: Gulf of Mexico – Lower Carbon Intensity
Gulf of Mexico – Lower Carbon Intensity Regulatory Oversight Helps Drive Lower Carbon Footprint Gulf of Mexico Plays Leading Role(a) Significant Regulatory Oversight(b) • Barrels produced from the Gulf of Mexico are the least • The leasing and operations activities in the GOM are subject emissions i
Slide 15: NOIA Report – GHG Intensity of Gulf of Mexico
NOIA Report – GHG Intensity of Gulf of Mexico Lower Emission Intensity Should Support Continued Investment Over Time • In May 2023, the National Ocean Industries Association (NOIA) commissioned ICF to study the GHG emission intensity of U.S. oil production compared to oil produced around the world –
Slide 16: Central Gulf of Mexico Midstream Dynamics
Central Gulf of Mexico Midstream Dynamics Uniquely Positioned to Capture Additional Volumes in the Central Gulf of Mexico • Integrated system provides producers with basin leading midstream solution “highway to shore” for deepwater producers – Uniquely positioned to service the continued growth in c
Slide 17: Case Study: Poseidon Oil Pipeline
Case Study: Poseidon Oil Pipeline Irreplaceable Crude Oil Pipeline in the Central Gulf of Mexico • Poseidon Oil Pipeline is a basin critical pipeline that transports Steady Volumes Through Commodity Cycles central Gulf of Mexico production to key markets in Louisiana +47% – Integrated onshore with G
Slide 18: Gulf of Mexico Footprint Expansion
Gulf of Mexico Footprint Expansion Building Upon and Expanding Basin Critical Infrastructure in the Gulf of Mexico • On May 4th, 2022 Genesis announced it would spend ~$550 million to expand its existing CHOPS system and construct a new 100% owned approximately 105 mile, 20” diameter pipeline (the “
Slide 19: The SYNC Pipeline
The SYNC Pipeline Further Extending Genesis’ Pipeline Network in the Central Gulf of Mexico • The SYNC Pipeline will connect the Walker Ridge area of the SYNC Pipeline Connects Walker Ridge to CHOPS Gulf of Mexico directly to the CHOPS system and its Garden Banks 72 platform – 100% of oil production
Slide 20: Salamanca & Independence Hub
Salamanca & Independence Hub Re-Purposing Existing Facility to Reduce Environmental Impact • On May 4th, 2022 Genesis announced the sale of the idled Independence Hub Platform Independence Hub platform to LLOG to serve as the floating production system for the Salamanca development – Gross proceeds
Slide 21: Soda and Sulfur Services – Overview
Soda and Sulfur Services – Overview Two Market Leading Businesses with Vertical Integration • The Soda and Sulfur Services segment is comprised of two market leading businesses, Genesis Alkali and TDC – Genesis Energy’s second largest segment (~37% of LTM total segment margin as of 3Q 2023) – 3Q 202
Slide 22: Soda Ash – Business Overview
Soda Ash – Business Overview Largest North American Producer of Low Cost Natural Soda Ash • Market leading soda ash position with steady cash flow profile Genesis has Largest Trona Lease Holding in U.S. and significant barriers to entry • Largest supplier of natural soda ash in the Western Hemispher
Slide 23: Soda Ash Operations
Soda Ash Operations Multiple Production Facilities Provides Customers with Volume Assurance • Genesis operates two main soda ash manufacturing sites in Green River, Wyoming – Pro-forma for the Granger expansion Genesis will be the largest soda ash producer in the Western Hemisphere with a combined ~
Slide 24: Long-Term Soda Ash Fundamentals
Long-Term Soda Ash Fundamentals Strong Market Characteristics Driving Long-Term Outlook • Soda Ash is an Essential Component with No Known Substitutes – >50% of global demand is used in the manufacturing of glass (flat, container, automobile, solar panels, etc…)(a) • Soda ash helps glass manufacture
Slide 25: Soda Ash – Market Summary
Soda Ash – Market Summary Supply / Demand Balance Expected to Remain Tight over Long-Term • U.S. demand is relatively stable Historical U.S. Natural Soda Ash Pricing(a) • Domestic natural soda ash production competitively positioned vs. global high-cost synthetic production to supply export growth i
Slide 26: Soda Ash – Demand Drivers
Soda Ash – Demand Drivers Growing Global Demand (Ex. China) Driven by Emerging Middle Class & Green Initiatives • Soda ash demand is driven by a diversified set of global end 2022 Global End-Markets (%)(a)(b) markets • Over 75% of global demand from glass, chemicals and soaps / detergents – Flat gla
Slide 27: Natural Soda Ash Advantages
Natural Soda Ash Advantages Low-Cost Position and Lower Carbon Footprint Provide Competitive Advantages • Genesis is a low-cost producer of natural soda ash Natural vs. Synthetic Production(a) – Synthetic production is ~70% of global supply but roughly 2x as expensive to produce when compared to U.S
Slide 28: Granger Facility Expansion
Granger Facility Expansion Project Overview December 2021 • Genesis is investing approximately $350-$375 million to expand its Granger soda ash facilities by approximately 750k tons per year – Anticipated in service in 2H 2023 – Designed as a near-replica of existing ELDM facility (operating since 1
Slide 29: Sulfur Services – Business Overview
Sulfur Services – Business Overview Market Leader of NaHS Production and Leading Provider of Sulfur Removal Services • Produce sodium hydrosulfide (“NaHS”) through proprietary Sales by Industry(a) process reacting high hydrogen sulfide (“H2S”) gas with Caustic Soda (“NaOH”) • Sour “Gas Processing” u
Slide 30: Facilitating Lower Refinery Emissions
Facilitating Lower Refinery Emissions NaHS Technology Helping Reduce Host Refinery and End Customer Emissions • Proprietary technology used to facilitate the eco-friendly NaHS Production Process removal of sulfur entrained in crude oil and its finished refined High H2S products Gas Stream Chlor-Alka
Slide 31: Marine Transportation – Overview
Marine Transportation – Overview Improving Fundamentals & High Degree of Operating Leverage • Inland barges are all asphalt capable, heated barges primarily Genesis Marine Equipment utilized in black oil service American Inland Offshore • Business operates with largely fixed costs and a high degree
Slide 32: Onshore Facilities & Transportation – Overview
Onshore Facilities & Transportation – Overview Integrated Asset Footprint with Exposure to Significant Refinery Demand Baton Rouge Complex Texas City Terminal Raceland Terminal Other Legacy Onshore Assets • Integral part of ExxonMobil’s Baton • Connection to Genesis owned • Connection to Genesis own
Slide 33: Appendix & Reconciliations
Appendix & Reconciliations
Slide 34: Corporate Information
Corporate Information Debt and Preferred Equity Profile & Corporate Structure Balance Sheet Overview Corporate Structure(a) • Committed to long-term leverage ratio(b) of 4.00x Series A Class A Class B Convertible • 3Q 2023 leverage ratio(b) of 3.92x Common Units Common Units Preferred Units (122,424
Slide 35: Sustainability
Sustainability Supporting Business Priorities & Our Investors Through Sustainability • Genesis is committed to operating its business in a responsible and sustainable manner – Released inaugural sustainability report in May 2023 – Understanding, monitoring, engaging and improving sustainability metr
Slide 36: Actively Participating in Green Activities
Actively Participating in Green Activities Helping Facilitate the Energy Transition & Lower Emission Activities Soda & Sulfur Services • Our soda ash business should increasingly participate in multiple renewable energy themes moving forward – Demand for soda ash driven by the production of new LEED
Slide 37: Balance Sheet & Credit Profile
Balance Sheet & Credit Profile Leverage Ratio & Common Unit Distribution Coverage Ratio ($ in 000s) 9/30/2023 Senior secured credit facility $198,400 Senior unsecured notes, net of debt issuance costs and premium 3,011,386 Less: Outstanding inventory financing sublimit borrowings (21,700) Less: Cash
Slide 38: Reconciliation – Segment Margin
Reconciliation Segment Margin ($ in 000s) YTD 2023 2022 2021 2020 2019 Net Income (Loss) Attributable to Genesis Energy, LP $105,770 $75,457 ($165,067) ($416,678) $95,999 Corporate general and administrative expenses 52,580 71,820 61,287 51,457 52,755 Depreciation, depletion, amortization and accret
Slide 39: Reconciliation – Available Cash Before Reserves
Reconciliation Available Cash Before Reserves ($ in 000s) YTD 2023 2022 2021 2020 2019 Net income (loss) attributable to Genesis Energy, L.P. $105,770 $75,457 ($165,067) ($416,678) $95,999 Interest expense 184,057 226,156 233,724 209,779 219,440 Income tax expense 1,748 3,169 1,670 1,327 655 Gain on
Slide 40: Reconciliation – Adjusted Debt & Adjusted Consolidated EBITDA
Reconciliation Adjusted Debt & Adjusted Consolidated EBITDA ($ in 000s) Long-term debt 9/30/2023 2022 2021 2020 2019 Senior secured credit facility $198,400 $205,400 $49,000 $643,700 $959,300 Senior unsecured notes, net of debt issuance costs and premium 3,011,386 2,856,312 2,930,505 2,750,016 2,469
Slide 41: Reconciliation – Select Items
Reconciliation Select Items ($ in 000s) YTD 2023 2022 2021 2020 2019 Applicable to all Non-GAAP Measures Differences in timing of cash receipts for certain contractual arrangements (a) $33,519 $51,102 $15,482 $40,848 ($8,478) (b) Distributions from unrestricted subsidiaries not included in income -
Genesis Energy — Investor Presentation (December 2023) on 6ix