Usd Partners Lp · OTC:USDP
Usd Partners Lp — RBC Capital Markets MLP Conference 2015
31 slides from Usd Partners Lp's conference presentation, Nov 18, 2015
Slide 1: RBC Capital Markets MLP Conference
RBC Capital Markets MLP Conference November 2015
Slide 2: Cautionary Statements
Cautionary Statements This presentation may contain forward-looking statements within the meaning of U.S. federal securities laws, including statements related to USD Partners LP’s (“USDP” or the “Partnership”) expected Adjusted EBITDA, yield and distribution growth in 2016, the stability and predic
Slide 3: Overview of USD Partners LP
Overview of USD Partners LP 3
Slide 4: Overview of USD Partners LP
Overview of USD Partners LP • Formed in 2014 by US Development Group, LLC (“USDG”) to acquire, develop and operate energy-related rail terminals and other high quality complementary midstream assets • USDP units offer an attractive ~12% current yield with 10% growth in 2016, underpinned by stable an
Slide 5: Attractive Yield Relative to Expected Growth
Attractive Yield Relative to Expected Growth USDP appears undervalued based on management’s guidance of ≥10% distribution growth in 2016 Current Yield vs. 2015 – 2017 Expected Distribution CAGR (Midstream MLPs) 35% R² = 0.5428 30% 25% 2015 – 2017 Distribution CAGR Current USDP Yield 20% 15% Guidance
Slide 6: Financial Flexibility to Execute on Growth Opportunities
Financial Flexibility to Execute on Growth Opportunities Partnership has ~$161 million of available liquidity USDP Leverage and Liquidity – Recently exercised $100 million senior secured credit 9/30/2015 PF facility accordion for Casper (US$ in millions) transaction – ~$6 million of cash plus ~$155
Slide 7: Overview of Canadian Crude Oil Market
Overview of Canadian Crude Oil Market 7
Slide 8: Western Canadian Oil Sands are Unlike U.S. Shale
Western Canadian Oil Sands are Unlike U.S. Shale Oil sands production has unique qualities that make it less sensitive to temporary commodity price movements Western Canada Oil Sands U.S. Shale Crude, natural gas and associated Production Type Heavy Crude liquids Raw Bitumen ~8° Typical API Diluted
Slide 9: Steady Growth in Western Canada Crude Oil Production
Steady Growth in Western Canada Crude Oil Production Industry forecasting production growth of 700,000 to 1,000,000 barrels per day by 2020 Western Canada Crude Oil Production Outlook (Nov. 2015) 5,000 Estimates → 4,500 4,000 3,500 (thousands of barrels per day) 3,000 2,500 2,000 1,500 1,000 500 - 2
Slide 10: Additional Pipeline Capacity is Still Unclear
Additional Pipeline Capacity is Still Unclear Proposed Long Haul Pipeline Additions from W. Canada Have Faced Meaningful Delays Capacity 2013 CAPP Est. 2014 CAPP Est. 2015 CAPP Est. Current Est. Proposed Pipeline (mbpd) In Service Date In Service Date In Service Date In Service Date Keystone XL 830
Slide 11: Forecasts Suggest Supply Will Exceed Pipeline Capacity
Forecasts Suggest Supply Will Exceed Pipeline Capacity Upcoming takeaway constraints likely to push discounts wider and create a “call” on crude-by-rail $10 Takeaway Capacity Constrained New Takeaway Capacity Added WCS unattractive relative to Maya on a $5 transportation cost adjusted basis $0 WCS a
Slide 12: Rail Provides Scalable and Flexible Market Access
Rail Provides Scalable and Flexible Market Access Rail enables a number of advantages for both producers and refiners Cost Quality Speed Market Optionality Preservation • Less upfront investment • Shorter development time • Option to reach markets • Loading heavier grades of and maintenance capital
Slide 13: Railing a Heavier Canadian Barrel: Improving the Model
Railing a Heavier Canadian Barrel: Improving the Model Transporting a heavier barrel of bitumen is expected to improve economics on both ends of the value chain, in a safer and more efficient way Refiner Benefits • Consistent product Producer Benefits • Ability to blend an optimal crude • Volume upl
Slide 14: Overview of USDP Assets
Overview of USDP Assets 14
Slide 15: Hardisty Rail Terminal at Canada's Largest Storage Hub
Hardisty Rail Terminal at Canada’s Largest Storage Hub • Crude origination terminal that commenced operations in June 2014 • Only unit train-capable crude-by-rail terminal located at the Hardisty hub, the primary location for storing and originating crude oil from Western Canada with over 20 million
Slide 16: Casper Terminal Provides Advantaged Access to Coasts
Casper Terminal Provides Advantaged Access to Coasts • Crude origination terminal in Casper, Wyoming, with Located at the Intersection of the Express and Platte Pipelines capacity to load more than one unit train per day – 900,000 barrels of customer-dedicated onsite storage capacity Rail to – Two t
Slide 17: Casper Terminal Tankage Adds to the Value Proposition
Casper Terminal Tankage Adds to the Value Proposition Customer-dedicated onsite tankage provides Casper Terminal Crude Oil Storage Tanks unique value proposition by enabling customers to: – Preserve specific quality of crude oil – Blend multiple grades of crude oil to optimize economics • Pipeline a
Slide 18: Selected Sponsor Development Projects
Selected Sponsor Development Projects 18
Slide 19: USD Partners LP Structure
USD Partners LP Structure USD Holdings Energy Capital Goldman Sachs LLC & Partners Management Hardisty Terminal Expansions USD Group LLC Houston Ship Channel / (the Sponsor) Development Projects Texas Deepwater Philadelphia, PA 100% Ownership Interest Grays Harbor, WA 50.9% LP Interest Public Unitho
Slide 20: Planned Hardisty Terminal Expansion
Planned Hardisty Terminal Expansion • Will add capacity for two additional unit trains per day – Additional rail staging track, second loading rack and batch integrity system – Rack and batching flexibility to target heavier grades of crude (Railbit, DRUbit and bitumen) from WCSB • Engineering and p
Slide 21: U.S. Gulf Coast Destination on the Houston Ship Channel
U.S. Gulf Coast Destination on the Houston Ship Channel • USDG recently announced a joint venture with Pinto Realty Partners LP to develop a premier U.S. Gulf Coast destination terminal on the Houston Ship Channel – 988-acre property could support a multiple unit train per day rail terminal for liqu
Slide 22: Building on Our Network Strategy
Building on Our Network Strategy Western Canada Origination ~1.2 MMBpd expected increase in oil sands production over the next 10 years, primarily from projects already operating or under construction Sample crude oil routes to refining markets East Coast Destination Substantial refining capacity pl
Slide 23: Partnership Highlights
Partnership Highlights Strategically Located Assets Stable and Predictable Cash Flows Multiple Growth Levers Financial Flexibility Relationship with Sponsor & ECP 23
Slide 24: Appendix
Appendix 24
Slide 25: Sponsored by Proven Developer and Industry Innovator
Sponsored by Proven Developer and Industry Innovator • A pioneer of the hydrocarbon-by-rail concept, USDG has a track record of providing sustainable industry solutions • USDG is a proven developer of unit train-capable terminals – Built and/or operated 14 unit train-capable origination and destinat
Slide 26: Strategically Located Ethanol Destination Terminals
Strategically Located Ethanol Destination Terminals Industry Infrastructure Needs Addressed: • Fragmented production • Significant regional imbalances • Pipelines disadvantaged and trucks uneconomical • Regulatory pressures regarding gasoline blending Overview of Ethanol Destination Terminals San An
Slide 27: Our Modern Railcar Fleet
Our Modern Railcar Fleet • USDP provides customers access to railcars, as well as railcar-specific services related to the transportation of crude oil, ethanol and other liquid hydrocarbons, including scheduling, regulatory reporting, maintenance, etc. • We believe this access incentivizes customers
Slide 28: Strong Safety Record Distinguishes USD in the Marketplace
Strong Safety Record Distinguishes USD in the Marketplace We are committed to safe, efficient and reliable operations that comply with environmental and safety regulations • All USDP facilities meet or exceed all government health and safety regulations • USDG has been nationally recognized by the N
Slide 29: Non-GAAP Measures
Non-GAAP Measures We define Adjusted EBITDA as net income before depreciation and amortization, interest and other income, interest and other expense, unrealized gains and losses associated with derivative instruments, foreign currency transaction gains and losses, income taxes, non-cash expense rel
Slide 30: Adjusted EBITDA and DCF Reconciliation
Adjusted EBITDA and DCF Reconciliation 30
Slide 31: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA Nine Months Nine Months Casper Ended Ended 9/30/2015 Terminal Pro Forma as (Unaudited) 9/30/2015 Annualized ¹ Acquisition ² of 9/30/2015 (in thousands) Net income (loss) $ 11,018 $ 14,691 $ 16,290 $ 30,981 Add (deduct): Interest expense 2,910 3,880 6,500 10,380 Depr
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