Dakota Plains — Investor Presentation (February 2015)
29 slides from Dakota Plains's investor presentation, Feb 10, 2015
Slide 1: Corporate Presentation February 10, 2015
NYSE MKT: DAKP CORPORATE PRESENTATION FEBRUARY 10, 2015 WWW.DAKOTAPLAINS.COM
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements made by representatives of Dakota Plains Holdings, Inc. (“Dakota Plains” or the “Company”) during the course of this presentation that are not historical facts, are forward-looking statements. These statements are based on certain assumptions and expectations ma
Slide 3: Summary
SUMMARY Corporate Overview: Corporate information Pioneer Terminal in New Town, ND With increased Canadian Pacific service, secured 55k bopd for January 2015 and were over-subscribed Have line of sight on 80k bopd by summer 2015; guidance assumes only 60k bopd in 2h15 Sand operation volumes are stea
Slide 4: Corporate Information
CORPORATE INFORMATION Dakota Plains Holdings, Inc. is an integrated midstream energy company operating the Pioneer Terminal with services that include outbound crude oil storage, logistics, and rail transportation and inbound frac sand logistics. The Pioneer Terminal is located in Mountrail County,
Slide 5: Company Highlights
COMPANY HIGHLIGHTS Pioneer Terminal serves top producing counties in North Dakota Mountrail, McKenzie, Williams and Dunn counties At terminus of Canadian Pacific line, which offers enhanced rail access and reduced Strategic congestion One of only 3 rail terminals not on BNSF; Only non-BNSF terminal
Slide 6: Pioneer Terminal
PIONEER TERMINAL HILAND, PELICAN & TARGA PIPELINE CDPS 180K BBLS STORAGE, 270K SUMMER 2015 TWO INBOUND UNIMIN FRAC SAND PIPELINES TERMINAL 10 STATION RAIL LOADING 10 TRUCK OFFLOAD STATIONS FOUR LADDER TRACKS = 10,000 FEET 6
Slide 7: Pioneer Terminal Crude Operations
PIONEER TERMINAL CRUDE OPERATIONS Land is owned by Dakota Plains Holdings, Inc. Commenced operations August 2010 Generates revenue through fee/bbls Double loop track, each 120 car capable 180,000 bbls of storage, third 90,000 bbls tank expected to be completed by Summer 2015 Third loop track and inc
Slide 8: Pioneer Terminal Sand Operations
PIONEER TERMINAL SAND OPERATIONS Land is owned Dakota Plains Holdings, Inc. Commenced frac sand transloading operations June 2014 Generates revenue through fee/ton paid by Unimin 8,500 feet of dedicated track space 8,000 tons of storage Track expansion and additional storage under consideration 8
Slide 9: Pioneer Location
PIONEER LOCATION Location Highlights: One of 3 rail terminals not on BNSF Only non-BNSF terminal that accepts third party volumes Capacity for 5 inbound pipelines; two connected Access to only Missouri River bridge crossing for 70 miles Crude By Rail Terminals Bakken Heat Map November 14, 2014 publi
Slide 10: Crude By Rail Terminals Fall 2014
CRUDE BY RAIL TERMINALS FALL 2014 Plains All American Hess Ross BNSF Crestwood Partners c. 65k bpd Tioga - Epping - BNSF Gathering c. 70k bpd c. 100k bpd Robinson Lake Pipe Gathering Beaver Lodge Pipe Storage 200k EOG 3rd Party Storage 1M Stanley - BNSF Storage 70k bpd NO 3rd Party Storage 240k Phil
Slide 11: Pioneer Quarterly Volume Growth
PIONEER QUARTERLY VOLUME GROWTH Average Daily Volume by Quarter (bopd) 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1q12 2q12 3q12 4q12 1q13 2q13 3q13 4q13 1q14 2q14 3q14 4q14(a)(a) QTD through December 10, 2014 11
Slide 12: 2015 Operations Outlook
2015 OPERATIONS OUTLOOK Canadian Pacific expands crude oil train allocations to 22 per month starting 1Q2015 Contracted crude oil transloading volumes now 55k bopd starting January 2015 Canadian Pacific has also pledged incremental unit train allocations to support train commitments throughout 2015
Slide 13: Current Environment
Tom DAKOTA PLAINS (CGD) Current Environment
Slide 14: North Dakota Rail & Pipeline Volumes
NORTH DAKOTA RAIL & PIPELINE VOLUMES Brent/WTI spread $/bbl Rail North Dakota production bbl/day volume Pipeline Volume Sources: North Dakota Pipeline Authority (NDPA) with data through November 2014 and the Energy Information Administration (EIA) 14
Slide 15: North Dakota Crude Oil Pipelines & Expansions
NORTH DAKOTA CRUDE OIL PIPELINES & EXPANSIONS Commissioned December 2014 Butte Loop = 110k bpd Hiland = 50k bpd Both are bound for Guernsey, WY Planned Sandpiper = 225,000 bpd (Q? 2017) Minot to Clearbrook, MN Energy Transfer = 450k bpd (Q4 2016?) ND to Patoka, IL Keystone XL = 100k bpd (??? Timing)
Slide 16: Review of Buyout of JV Partner
REVIEW OF BUYOUT OF JV PARTNER
Slide 17: JV Transaction
JV TRANSACTION Acquired partner’s 50% share of oil Own 100% of the business, Pioneer transloading, sand transloading, and Terminal and land oil marketing business Terminates under-performing JVs Secured indemnity to mitigate Removes direct commodity risk contingent liability related to Lac Megantic
Slide 18: Transaction Details
TRANSACTION DETAILS Signed definitive agreement and closed on December 5, 2014 Total consideration: Payment of $43m cash Future contingent payments at $0.225 per barrel actually transloaded, capped at 80k bopd, through 2026 (remainder of former JV term) Indemnification mitigates DAKP’s contingent li
Slide 19: Financing the Transaction
FINANCING THE TRANSACTION The new $57.5M credit facility provided by SunTrust Bank consists of Two fully drawn tranches of term loan for a total of $37.5M One revolver of $20.0M which is $11.0M drawn The former terminal note and the former promissory notes have been refinanced in the transaction Sou
Slide 20: Balance Sheet Impact of Transaction
BALANCE SHEET IMPACT OF TRANSACTION millions Before (3q14) After (12/5/14) Current Assets $ 10.4 $ 32.0 Property and Equipment 54.8 54.8 Investment in DPTS Marketing, LLC 10.6 - Deferred Tax Asset 3.4 23.7 Other 1.5 0.8 Total Assets $ 80.7 $ 111.3 Current Liabilities $ 3.0 $ 13.4 Long-Term Liabiliti
Slide 21: Guidance & Growth Opportunities
Guidance & Growth Opportunities
Slide 22: 2015 Guidance
2015 GUIDANCE Crude oil throughput volumes: 55k bopd effective Jan 2015 Increasing to 60k bopd effective 2H2015 2015 expected average throughput volumes 57.5k bopd, opportunity to further increase volumes 2H2015 Sand throughput volumes at 97.5k tons per quarter on average 2015 expected EBITDA of $23
Slide 23: 2015E Product Throughput
2015E PRODUCT THROUGHPUT Crude (bopd) Sand (tons pcm) 70 35 65 30 Thousands Thousands 25 60 20 55 15 50 10 45 5 40 0 23
Slide 24: Aspiration
ASPIRATION Terminal throughput capacity, bopd Planned Phases 4-6 Phase 3 under construction Phase 2 Phase 1 Source: Lipow Oil Associates and DAKP management 24
Slide 25: Capital Plan
CAPITAL PLAN 2015E 2017E Objective is to build out the Pioneer Terminal to 160k bopd in phases based on level of rail service and demand for throughput: Phase 4 - A third 8,400 ft loop track: Project still subject to approval Estimated Cost: $5M Funding would be provided by cash from operations and
Slide 26: Appendix
| DAKOTA PLAINS (ap) APPENDIX
Slide 27: Canada & United States Crude By Rail Terminals
CANADA & UNITED STATES CRUDE BY RAIL TERMINALS Source: Wall Street Journal Article 09-14-14 27
Slide 28: 2015 Class I Capex
2015 CLASS I CAPEX Class I 2015 CAPEX % of EPS from Crude By Rail BNSF $6B ? Canadian National $2.2B 6% Canadian Pacific $1.5B 9% CSX $2.5B 3% Kansas City Southern $700M 1% Norfolk Southern $2.4B 4% Union Pacific $4.3B 2% Total $19.6 Billion Safety Maintenance Sidings expansions Locomotives People S
Slide 29: Adjusted EBITDA
ADJUSTED EBITDA (expressed in USD millions, unless otherwise indicated) Twelve Months Ended December 31, 2015 Net Income $ 8.5 Add back: Interest Expense $ 7.6 o/w Contingent payment interest $ 4.2 Term loan and revolver interest $ 3.1 Fees / amortization associated with loans $ 0.4 Tax Provision $
Dakota Plains Holdings — Investor Presentation (February 2015) on 6ix