Genesis Energy, L.p. · NYSE:GEL
Genesis Energy, L.p — Investor Presentation (June 2023)
45 slides from Genesis Energy, L.p's investor presentation, June 2023
Slide 1: Genesis Energy, L.P. Investor Presentation
Genesis Energy, L.P. Investor Presentation June 2023
Slide 2: Disclosures & Company Information
Disclosures & Company Information Genesis Energy, L.P. NYSE: GEL Investor Relations Contact Common Unit Market Value ~$1.2 billion(a) InvestorRelations@genlp.com (713) 860-2500 Convertible Preferred Equity ~$0.8 billion(a) Corporate Headquarters Enterprise Value ~$5.2 billion(a) 811 Louisiana, Suite
Slide 3: Genesis Energy Investment Overview
Genesis Energy Investment Overview • Genesis Energy, L.P. operates a diversified collection of high-quality infrastructure assets and world-class businesses with significant upside and operating leverage – Offshore Pipeline Transportation: Over 2,400 miles of pipelines and basin critical infrastruct
Slide 4: Key Investment Considerations
Key Investment Considerations Market Leading Businesses with High Barriers to Entry 1 • Genesis is a market leader in four critical businesses – (1) Deepwater Gulf of Mexico ("GOM") pipeline transportation, (2) Producer & marketer of U.S. natural soda ash, (3) Producer and marketer of sodium hydrosu
Slide 5: Market Leading Businesses / High Barriers to Entry
Market Leading Businesses / High Barriers to Entry Genesis Total LTM Offshore Pipeline Transportation Segment Margin $808 MM(a) • Practically irreplaceable integrated asset footprint focused on transporting crude oil produced from the deepwater Central Gulf of Mexico to multiple onshore markets • Co
Slide 6: Improving Performance and Financial Flexibility
Improving Performance and Financial Flexibility Free Cash Flow After All Fixed Charges on the Horizon • Improving the balance sheet and achieving long-term target leverage ratio(a) of 4.0x has been a top priority – 1Q 2023 leverage ratio(a) of 3.99x and currently expect to exit 2023 with a leverage
Slide 7: 2023 Guidance
2023 Guidance Reaffirming Guidance for 2023 • Reaffirming Adjusted EBITDA guidance range for 2023 2023 Financial Guidance – At its midpoint, represents a 18% increase over 2022 results(a) Adjusted EBITDA $780 - $810 million – Expect full year of volumes from King’s Quay and Spruance, and increasing
Slide 8: Current Macro Fundamentals of Soda Ash
Current Macro Fundamentals of Soda Ash Resilient Performance in 2023 Despite Economic Headwinds with Visibility in to 2024 • Despite concerns of an economic slowdown on the horizon, projected soda ash demand in 2023 remains resilient • Extreme weather conditions in Green River, WY during the first q
Slide 9: 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 10: Offshore Pipeline Transportation
Offshore Pipeline Transportation Overview
Slide 11: 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 +78% CHOPS, management has acquired an irreplaceable industry leading portfolio o
Slide 12: 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 13: 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 ~92% from 2013 – 2023E Non-Deepwater Deepwater (>1,000 ft.) Avg. Crude Price (WTI) 2,500 $120 • Production increase
Slide 14: 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 15: 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 • Caicos Baldpate Droshky • Khaleesi / Mormont
Slide 16: 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 17: 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 18: 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 19: 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 +49% – Integrated onshore with G
Slide 20: 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 21: 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 22: 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 23: Soda and Sulfur Services
Soda and Sulfur Services Overview
Slide 24: Soda and Sulfur Services Overview
Soda and Sulfur Services Overview Two Market Leading Businesses with Significant Scale • The Soda and Sulfur Services segment is comprised of two market leading businesses, Genesis Alkali and TDC – Genesis Energy’s second largest segment (~34% of total segment margin as of 1Q 2023) – LTM Segment Mar
Slide 25: Soda Ash - Business Overview
Soda Ash - Business Overview Largest North American Producer of Low Cost Natural Soda Ash • Market leading position with highly consistent cash flow profile Genesis has Largest Trona Lease Holding in U.S. and significant barriers to entry • ~4.2 million tons per year of natural soda ash production c
Slide 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: Marine & Onshore
Marine & Onshore Overview
Slide 33: 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 34: 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 35: Appendix & Reconciliations
Appendix & Reconciliations
Slide 36: 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 • 1Q 2023 leverage ratio(b) of 3.99x Common Units Common Units Preferred Units (122,539
Slide 37: Environmental, Social & Governance (“ESG”)
Environmental, Social & Governance (“ESG”) Supporting Business Priorities & Our Investors Through ESG • Genesis is committed to operating its business in a responsible and sustainable manner – Released inaugural ESG report in May 2023 – Understanding, monitoring, engaging and improving ESG metrics i
Slide 38: Unitholder Alignment / Long-Term Value Creation
Unitholder Alignment / Long-Term Value Creation Unitholder Alignment Long-Term Value Creation • NO incentive distribution rights (“IDRs”) with non-economic • Management has a track record of acquiring and developing General Partner (no sponsor) world class infrastructure assets at attractive valuati
Slide 39: ORRI – Transaction Overview
ORRI – Transaction Overview Attractive Structure Provides Genesis with Long-Term Cost Efficient Capital • On May 17, 2022, Genesis sold a 10% overriding royalty Illustrative Transaction Structure interest (“ORRI”) in substantially all of Genesis’ trona mineral leases to a special purpose vehicle (“S
Slide 40: Re-Financing Alkali Asset-Level Preferred Units
Re-Financing Alkali Asset-Level Preferred Units Eliminating Any Perceived Overhang While Preserving Upside • Genesis used the proceeds from the ORRI Secured Notes used to redeem 100% of the Alkali asset-level preferred units originally issued to fund the Granger expansion – Returns 100% of Alkali as
Slide 41: Balance Sheet & Credit Profile
Balance Sheet & Credit Profile Leverage Ratio & Common Unit Distribution Coverage Ratio (a) We define Adjusted Debt as the amounts outstanding under our senior secured credit facility and senior unsecured notes (including any unamortized premiums, discounts, or issuance costs) less the amount outsta
Slide 42: Reconciliation: Segment Margin
Reconciliation Segment Margin ($ in 000s) YTD 2023 2022 2021 2020 2019 Net Income (Loss) Attributable to Genesis Energy, LP ($1,644) $75,457 ($165,067) ($416,678) $95,999 Corporate general and administrative expenses 15,764 71,820 61,287 51,457 52,755 Depreciation, depletion, amortization and accret
Slide 43: Reconciliation: Available Cash Before Reserves
Reconciliation Available Cash Before Reserves ($ in 000s) YTD 2023 2022 2021 2020 2019 Net income (loss) attributable to Genesis Energy, L.P. ($1,644) $31,838 ($165,067) ($416,678) $95,999 Interest expense 60,854 229,627 233,724 209,779 219,440 Income tax expense 884 2,419 1,670 1,327 655 Gain on sa
Slide 44: Reconciliation: Adjusted Debt & Adjusted Consolidated EBITDA
Reconciliation Adjusted Debt & Adjusted Consolidated EBITDA (a) We define Adjusted Debt as the amounts outstanding under our senior secured credit facility and senior unsecured notes (including any unamortized premiums, discounts, or issuance costs) less the amount outstanding under our inventory fi
Slide 45: Reconciliation: Select Items
Reconciliation Select Items ($ 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) $10,575 $49,057 $15,482 $40,848 ($8,478) (b) Distributions from unrestricted subsidiaries not included in income - 3