Select Water Solutions, Inc. · NYSE:WTTR
Select Water Solutions — Raymond James 44th Annual Institutional Investors Conference (March 2023)
29 slides from Select Water Solutions's conference presentation, Mar 7, 2023
Slide 1: Company Overview
Company Overview Raymond James 44th Annual Institutional Investors Conference March 7, 2023
Slide 2: Disclaimer Statement
Disclaimer Statement C a utionary Statement Regarding Forward Looking Statements This presentation has been prepared by Select and includes market data and other factors and trends affecting our business in addition to measures calculated under statistical information from third-party sources, inclu
Slide 3: We are Connected by water
We are Connected by water 3
Slide 4: Water, Chemistry, Sustainability mission
Our mission is to deliver operational excellence and develop sustainable water and chemistry solutions every day, with a commitment to conservation and reuse. WATER CHEMISTRY SUSTAINABILITY 4
Slide 5: Sustainable Water and Chemistry are Mission Critical
Sustainable Water and Chemistry are Mission Critical Key trends Seismic Response in Water & Longer laterals, simulfracs and higher Operator ESG goals Areas require careful Disposal capacity Chemicals completions intensity focused on lower freshwater intensity navigation and expertise while restricti
Slide 6: Recycling is growing, but technology and infrastructure must advance
Recycling is growing, but technology and infrastructure must advance to keep pace with the demand Continued Growth in Produced Water …and Customer Focus on Recycling Volumes… and Reuse Solutions % of New Permian Completion Water Produced Water in the Permian Basin (billions of barrels)(1) Recycled W
Slide 7: Investment Highlights
• The clear market leader in full-life cycle water solutions for the energy industry and Integrated Market the only company in the industry with integrated water & chemical solutions Leader in Water & • Extensive track record of technology innovation combined w/operational excellence Chemistry • Dif
Slide 8: Company Snapshot
Company Snapshot Segment Overviews Water Services Water Infrastructure Chemicals • Comprehensive suite of integrated water • Water treatment & recycling: • Only Permian in-basin manufacturer of technologies and services for pre- and post- ~3 MMbpd of recycling capacity; only proprietary completion c
Slide 9: 2022 Revenue by Segment and Geography
2022 Revenue by Segment1 2022 Revenue by Geography1 6% 7% Permian Rockies 23% 9% Water Services South Texas 46% 58% Water Infrastructure 10% Northeast 19% MidCon Chemicals 11% ETX/NLA 11% Bakken 1. Based on results f or the twelv e months ended December 31, 2022, as reported 9
Slide 10: Market Leading Full Life-cycle Sustainable Water & Chemical Solutions
Market Leading Full Life-cycle Sustainable Water & Chemical Solutions Completions-Oriented Activities: ~70% of 2022 revenue1 Production-Oriented Activities: ~30% of 2022 revenue1 Select is the only Beneficial company in the Recycling & reuse in non- Reuse O&G industry with applications integrated fu
Slide 11: Diversified and Entrenched Platform
Diversified and Entrenched Platform Select Asset Footprint Legend: Bakken WTTR Active SWD WTTR Inactive SWD WTTR Permit SWD WTTR Water Pipeline WTTR Recycling Facility WTTR Solid Waste Facility Chemical Manufacturing / Distribution Facility DJ Basin Appalachia Delaware Basin Midland Basin MidCon Per
Slide 12: Blue-Chip Customer Base
Select’s expertise, technology and financial strength lead to a premier, diversified customer base with no customer representing more than 7% of our revenue Blue-Chip Customer Base 2022 Top 30(1) 12 1. Represents Select’s top 30 Customers f or the trailing twelv e month period ending December 31, 20
Slide 13: Disciplined Growth through Acquisitions
Disciplined Growth through Acquisitions • Over the last six quarters, Select has executed on 12 strategic M&A transactions adding annualized run-rate revenue of $400+ million and run-rate EBITDA of $80+ million • Acquisitions de-risked by ~$75mm in divestment of non-core operations & asset sales out
Slide 14: Recent Financial Performance
Consistent Operational Execution Strong Financial Performance Quarterly Revenue1,2 Quarterly Adjusted EBITDA1,2 $450 $120 $70 20.0% $400 $60 ($millions per well completion) $100 15.0% Adjusted EBITDA Margin $350 $50 10.0% ($ in millions) ($ in millions) $300 $80 $40 $250 $30 5.0% $60 $200 $20 0.0% $
Slide 15: Strong Balance Sheet & Liquidity
Select’s strong balance sheet and asset light business model provide significant growth and free cash flow generating opportunities Net Cash & Liquidity Profile As Of 12/31/22 Sustainability-Linked Credit Facility Cash $ 7.3 • On March 17, 2022, we closed on a $270 million, 5-Year term Bank Debt 16.
Slide 16: Committed to Shareholder Returns
Select believes that returning capital to shareholders out of positive and growing earnings and free cash flow is an important part of our overall capital allocation strategy Base Dividend Initiation Discretionary Share Repurchase Program • During Q3 2022, Select initiated base • ~$60 million of cap
Slide 17: Sustainability
Select is dedicated to supporting the entire water value chain. We are committed to accomplish that through the integration of services, infrastructure, chemistry and technology. is Sustainability Near Term ESG Initiatives • Water Recycling and Stewardship • Research & Development • Emissions Reduct
Slide 18: Select is Dedicated to Water Stewardship
Select is Dedicated to Water Stewardship Download Select’s 2021 Sustainability Report at selectenergy.com/sustainability Recycled Produced Water Volumes 173.6 • Select has significantly exceeded its previous targets for produced water (millions of barrels) 66.2 recycling established as part of its s
Slide 19: Integrated Water and Chemistry Expertise
Integrated Water and Chemistry Expertise By designing and implementing entire water Keeping Costs and chemical systems, Select in Check is the only company that Optimal Efficiency Chemical Cost Without a clear picture Total Cost Per Barrel ($) combines visibility on each of each segment, you compone
Slide 20: Technology Suites
Technology Suites Select’s technologies provide real-time Measuring & monitoring, feedback, Pump Automation Data Lake Field Automation Predictive Failures Monitoring automation and control of • Pond and Pit • Increased Efficiency • Water Metrics • Flow Meter Skids • Hose Testing & Mapping Analysis •
Slide 21: Key Summary Highlights
Key Summary Highlights Strong Safety & Disciplined Sustainability Approach to Focus Growth Water Solutions Deliver Free Strong Balance Market Leader Cash Flow Sheet
Slide 22: Appendix
Appendix 22
Slide 23: Methane & Waste Gas Management
Case Study Methane & Waste Gas Management Old Methods • Select has an exclusive contractual relationship with Emission Venting Rx for high efficiency waste gas combustors (emission control • Regulatory Limits devices) used in the management of methane emissions • Significant GHG Emissions • Environm
Slide 24: Permian Produced Water Recycling Facility
Case Study Permian Produced Water Recycling Facility • Recently commenced operations on state-of-the-art (barrels) Cumulative Completion Water Demand operator-owned produced water recycling facility in 25,000,000 Martin County, TX in the core of the Midland Basin 20,000,000 • Select connected existi
Slide 25: Automated Water Networks
Select’s suite of automated equipment powered by AquaView® monitoring & measurement solutions provide real-time and reliable data and control. Each component is designed to ensure best-in-class environmental management that’s customizable, powered by SCADA and accessible from phone, tablet, or lapto
Slide 26: Strategic M&A Updates
Strategic M&A Updates On November 1, 2022 closed on the acquisition of Breakwater Energy On November 1, 2022 closed on the acquisition of a portfolio of water Partners, LLC (“Breakwater”) gathering and disposal assets in the Bakken Shale from Cypress Environmental Solutions, LLC (“Cypress”) • Total
Slide 27: Strategic M&A Updates, continued
Strategic M&A Updates, continued On February 23, 2022 closed on the acquisition of Nuverra On December 3, 2021 closed on the acquisition of the U.S. onshore assets of Environmental Services, Inc. (NYSE American: NES) (“Nuverra") HB Rentals, L.C., the rentals and accommodations subsidiary of Superior
Slide 28: Strategic M&A Updates, continued
Strategic M&A Updates, continued + On October 1, 2021 closed on the acquisition of substantially all of the On July 9, 2021 closed on the acquisition of Complete Energy Services, Inc., assets of Agua Libre Midstream, LLC and other water-related assets, the water solutions subsidiary of Superior Ener
Slide 29: Non-GAAP Reconciliations
Adjusted EBITDA Reconciliation ($ in 000s) 2020 2021 2022 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Net Income/(Loss) ($291,219) ($53,047) ($36,259) ($21,208) ($401,732) ($27,421) ($19,616) ($14,204) $11,155 ($50,086) $7,985 $14,581 $24,717 $7,571 $54,854 Interest Expense 331 513 789 503 2,136 43