Select Water Solutions, Inc. · NYSE:WTTR
Select Water Solutions — Select Energy Services — Jefferies Energy Conference 2018
22 slides from Select Water Solutions's conference presentation, Nov 28, 2018
Slide 1: Select Energy Services, Inc.
Select Energy Services, Inc. Jefferies Energy Conference | November 27-28, 2018
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 Water Solutions Company Specialized Technology Capital Discipline with and Infrastructure Strong Cash Flow Deployed across the Generation Capabilities Lower 48 3
Slide 4: Select Energy Services – Company Snapshot
Select Energy Services – Company Snapshot Segment Overviews 9M18 Revenue by Segment1 Leading provider of total water solutions to the U.S. unconventional oil and gas industry 14% Water Comprehensive water solutions extending from sourcing to disposal Solutions 16% Water Solutions Source and lo
Slide 5: Water Represents a Critical, but Lower-Cost Input to the Frac, with Less Price Volatility
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 6: Well-Positioned Competitively with an Industry-Leading Customer Base for Water Solutions
Well-Positioned Competitively with an Industry-Leading Customer Base for Water Solutions Water Solutions Competitive Landscape Top Water Solutions Customers1 Service Providers Customers Service Major Oil Companies, Breadth & Geographic Public Independents & Footprint Large Private Operators Various
Slide 7: Differentiated Oilfield Chemicals Franchise
Differentiated Oilfield Chemicals Franchise Business Description Major Customers Leading developer and manufacturer of chemical technologies primarily for hydraulic fracturing, stimulation, cementing and well completions Offer full suite of frac fluid system additives, lab capabilities and in-ba
Slide 8: Premier Water-Oriented Oilfield Services Franchise
Premier Water-Oriented Oilfield Services Franchise Select has executed tremendous organic and M&A-related growth while maintaining low debt balances and a high level of customer service P Revenue of ~$1.2 billion through the first 9 months of 2018 P Adjusted EBITDA of ~$202 million through the first
Slide 9: Growth in Financial Performance & Liquidity
Growth in Financial Performance & Liquidity Quarterly Revenue1 Financial Performance Commentary1 Focus on efficiency and execution has led to ($ in millions) $393 $397 4,500 $400 $374 $376 increased profitability and pricing stability, even $355 $300 4,000 as labor and equipment markets remain tig
Slide 10: Solid Earnings Growth with a Fortified Balance Sheet
Solid Earnings Growth with a Fortified Balance Sheet Earnings per Share Growth of 93% 2018YTD $0.35 $0.30 $0.29 $0.25 $0.24 $0.20 $0.15 $0.15 $0.10 $0.05 $0.00 Q1 2018 Q2 2018 Q3 2018 Net Debt ($mm) $93.2 $92.8 $74.6 Liquidity ($mm) $166.9 $199.9 $218.1 Net Debt / TTM Adj. EBITDA1 0.4x 0.4x 0.3x 1.
Slide 11: Robust Cash Flow Generation with Room to Expand
Robust Cash Flow Generation with Room to Expand YTD Cash Flow from Operations has exceeded capital investments by ~$25 million $mm Cash Flow Summary $mm Liquidity 80 250 218.1 60 13.1 200 40 60.2 67.0 53.4 150 20 0 (6.7) 205.0 100 (18.2) (31.1) -20 (41.0) (31.0) 50 -40 (28.1) -60 0 1Q18 2Q18 3Q18 30
Slide 12: Significant Growth Opportunities in Services
Significant Growth Opportunities in Services • Margin enhancement through increased efficiency Margin and replacement of leased equipment Enhancement • Investments to reduce labor required per job and expand higher-capacity equipment • Highly fragmented market presents acquisition opportunities driv
Slide 13: Significant Growth Opportunities in Both Pre-Frac and Post-Frac Infrastructure
Significant Growth Opportunities in Both Pre-Frac and Post-Frac Infrastructure • Evaluating multiple 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 recycling faci
Slide 14: Attractive Underlying Fundamentals
Attractive Underlying Fundamentals Oilfield Pressure Proppant Land Other Oilfield Chemicals Pumpers Companies Drillers Services High Completion Exposure Hard to Replicate Platform Low Capital Intensity Favorable Competitive Dynamics More favorable Less favorable Differentiated platform driven by att
Slide 15: 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 16: Appendix
Appendix 16
Slide 17: 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 18: Growth in Permian Drilled but Uncompleted Wells Supports Future Growth in Completions Activity
Growth in Permian Drilled but Uncompleted Wells Supports Future Growth in Completions Activity U.S. Drilled but Uncompleted (DUC) Well Inventory 9,000 8,000 7,000 Total U.S. +60% 6,000 5,347 wells to 8,545 5,000 4,000 3,000 2,000 Permian +224% 1,000 1,192 wells to 3,866 - Nov 2016 Dec 2016 Mar 2017
Slide 19: Scalable and Reliable Water Sourcing and Logistics Are Critical to Unconventional Production
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 20: Select Corporate Profile
Select Corporate Profile Select Corporate Profile1 Listing and Ticker Symbol NYSE: WTTR Recent Share Price $10.04 Market Capitalization ~$1,071M Enterprise Value ~$1,146M Total Outstanding Shares 106.7M Average Daily Trading Volume 634,922 (last 3 months) Headquarters Houston, TX Note: 1. Share pr
Slide 21: Select Legal & Ownership Structure
Select Legal & Ownership Structure Crestview & Other Legacy Crestview Public Owners SCF Partners Owners Partners Class B Shares Class A Shares Class A Shares Class A Shares (24.4% of Voting (56.8% of (3.6% of Voting (15.2% of Voting Power) Voting Power) Power) Power) Ownership Summary1 24.4% Select
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Select Energy Services, Inc. 2016 2017 2018 ($ 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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