Usd Partners Lp · OTC:USDP
Usd Partners Lp — Investor Presentation (February 2016)
29 slides from Usd Partners Lp's investor presentation, Feb 9, 2016
Slide 1: February 2016 Investor Presentation
February 2016 Investor Presentation
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 A USD Partners LP
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 logistics assets, including rail terminals and other high-quality and complementary midstream infrastructure • Attractive ~16% yield with announced guidance of 10% distri
Slide 5: Take-or-Pay Contract Summary
Take-or-Pay Contract Summary High-quality, primarily investment grade customers provide stable and predictable cash flows through current commodity price cycle Source: Standard & Poor’s, Moody’s, company news releases, Google finance (as of 2/8/2016) Note: Investment grade ratings indicated by bold
Slide 6: Financial Flexibility to Execute on Growth Opportunities
Partnership has ~$161 million of available liquidity – Recently exercised $100 million senior secured credit facility accordion – ~$6 million of cash plus ~$155 million of revolver capacity, pro forma as of 9/30/2015 – Conservative leverage profile with ~3.6x Net Debt / Adjusted EBITDA ¹ – Expected
Slide 7: Canadian Crude Oil Market
Canadian Crude Oil Market A USD Partners LP
Slide 8: Western Canadian Oil Sands are Unlike U.S. Shale
Western Canada Oil Sands U.S. Shale Production Type Heavy Crude Crude, natural gas and associated liquids Typical API Gravity of Crude Raw Bitumen ~8° Diluted Bitumen ~20-22° Upgraded Bitumen / Synthetic Crude ~31-33° 35° to 50°+ Decline Profile Very low High initial declines Asset Life ~30+ Years V
Slide 9: Steady Growth in Western Canada Crude Oil Production
2,779 2,982 3,147 3,340 3,634 3,827 3,981 4,240 4,507 4,714 4,913 - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (th ou sa nd s of b ar re ls p er d ay ) Steady Growth in Western Canada Crude Oil Production Source: Bank of Mon
Slide 10: Additional Pipeline Capacity is Still Unclear
Additional Pipeline Capacity is Still Unclear Proposed Pipeline Capacity (mbpd) 2013 CAPP Est. In Service Date 2014 CAPP Est. In Service Date 2015 CAPP Est. In Service Date Current Est. In Service Date Keystone XL 830 2015 2017 2018 ? Trans Mountain Expansion 590 Q4 2017 Q4 2017 Q4 2018 Q3 2019 Nort
Slide 11: WCS Forecasts Suggest Supply Will Exceed Pipeline Capacity
($50) ($45) ($40) ($35) ($30) ($25) ($20) ($15) ($10) ($5) $0 $5 $10 D is co un t t o W TI ($ p er b ar re l) Maya, adj. for pipeline costs from Hardisty Maya, adj. for rail costs from Hardisty WCS Forecasts Suggest Supply Will Exceed Pipeline Capacity Source: USD Marketing, Bloomberg, PIRA (as of 2
Slide 12: Rail Provides Scalable and Flexible Market Access
Rail enables a number of advantages for both producers and refiners Rail Provides Scalable and Flexible Market Access Long-Term, Sustainable Energy Infrastructure Solution Cost Speed Market Optionality Quality Preservation • Less upfront investment and maintenance capital required • Reduced financia
Slide 13: Railing a Heavier Canadian Barrel: Improving the Model
Railing a Heavier Canadian Barrel: Improving the Model Producer Benefits • Volume uplift: Ability to ship more bitumen per barrel than what will flow in pipelines (i.e., improve upon the 70 / 30 bitumen / diluent pipeline blend) • Reduced diluent needs (costs) • Quality preservation • Utilizes exist
Slide 14: Strategically Located Assets
Strategically Located Assets
Slide 15: Hardisty Terminal at Canada's Largest Crude Storage Hub
Hardisty Terminal at Canada’s Largest Crude Storage Hub • Crude origination terminal that commenced operations in June 2014 with ability to load two 120-railcar unit trains per day • Only unit train-capable crude origination terminal located at the Hardisty hub, which is the primary storage and orig
Slide 16: Casper Terminal Provides Advantaged Access to Coasts
Casper Terminal Provides Advantaged Access to Coasts • Crude origination terminal in Casper, Wyoming, with capacity to load more than one unit train per day – Six customer-dedicated onsite storage tanks with total capacity of 900,000 barrels – Two truck unloading LACT units with ability to send crud
Slide 17: Customer-dedicated onsite tankage value proposition
Customer-dedicated onsite tankage provides unique value proposition by enabling customers to: – Preserve specific quality of crude oil – Blend multiple grades of crude oil to optimize economics • Pipeline access to a variety of light, medium and heavy crude oil from Western Canada (dilbit, synbit, s
Slide 18: U.S. Gulf Coast Destination on the Houston Ship Channel
U.S. Gulf Coast Destination on the Houston Ship Channel Strategic Deep Water Property on the Houston Ship Channel (outlined in yellow) • USDG recently announced a joint venture with Pinto Realty Partners LP to develop a premier U.S. Gulf Coast logistics terminal on the Houston Ship Channel – 988-acr
Slide 19: Building on Our Network Strategy
Building on Our Network Strategy Source: Canadian Association of Petroleum Producers, Bank of Montreal, U.S. Energy Information Administration, Association of American Railroads Note: Heavy sour crude oil imports from Mexico and Venezuela per the EIA as of November 2015 (latest information available
Slide 20: Partnership Highlights
Partnership Highlights Relationship with Sponsor & ECP Strategically Located Assets Stable and Predictable Cash Flows Multiple Growth Levers Financial Flexibility 20
Slide 21: Appendix
Appendix A USD Partners LP
Slide 22: USD Partners LP Structure
USD Partners LP Structure USD Group LLC (the Sponsor) USD Partners GP LLC (GP & IDRs) Public Unitholders Hardisty Crude Terminal (Phase I) San Antonio Ethanol Terminal West Colton Ethanol Terminal Railcar Fleet Services Hardisty Terminal Expansions 100% Ownership Interest 2.0% GP Interest & IDRs USD
Slide 23: Attractive Yield Relative to Expected Distribution Growth
R² = 0.4174 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 20 15 – 20 17 D is tr ib ut io n C A G R Current Yield Current Yield vs. 2015 – 2017 Expected Distribution CAGR (Midstream MLPs) ___________________________ So
Slide 24: Strategically Located Ethanol Destination Terminals
West Colton Rail Terminal Blending Facilities Strategically Located Ethanol Destination Terminals Industry Infrastructure Needs Addressed: • Fragmented production • Pipelines disadvantaged and trucks uneconomical • Significant regional imbalances • Regulatory pressures regarding gasoline blending Ov
Slide 25: 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 to commit to USDP’s term
Slide 26: 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 National Safety Council for having an outstanding safety re
Slide 27: 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 28: Adjusted EBITDA and DCF Reconciliation
Adjusted EBITDA and DCF Reconciliation 28
Slide 29: Reconciliation to Adjusted EBITDA
Reconciliation to Adjusted EBITDA ¹ Annualized by multiplying amounts for the nine months ended 9/30/2015 by 4/3. ² Depreciation and provision for income taxes estimated based on actual results from 1/1/2015 through 5/31/2015. Interest expense estimated using a 3.75% interest rate on the portion of