Southcross Energy Partners L.P
Southcross Energy Partners L.P — NAPTP 2015 MLP Investor Conference
27 slides from Southcross Energy Partners L.P's conference presentation, May 20, 2015
Slide 1: 2015 MLP Investor Conference
May 2015 – NAPTP MLP Conference Presentation April 30, 2014 May 2015 National Association of Publicly Traded Partnerships 2015 MLP Investor Conference
Slide 2: Forward-looking statements
May 2015 – NAPTP MLP Conference Presentation This presentation contains forward-looking statements and information. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words
Slide 3: Southcross Fact Sheet
May 2015 – NAPTP MLP Conference Presentation 2 NYSE Ticker Total Units Unit Price Market Capitalization SXE 55.9 million units(1) $14.49(2) $810 million(2) $512 million Debt at March 31, 2015 Quarterly Distribution $0.40 per unit ($1.60 per unit on an annualized basis) Current Yield 11.0%(2) (1) Inc
Slide 4: Partnership Structure
May 2015 – NAPTP MLP Conference Presentation Partnership Structure Southcross Holdings LP (“Holdings”) Southcross Energy Partners, L.P. (NYSE: SXE) Operating Assets Public 39% LP Interest 2% GP Interest 61% LP Interest Southcross Energy Partners GP, LLC Financial sponsor ownership through various ho
Slide 5: The Southcross Advantage
May 2015 – NAPTP MLP Conference Presentation The Southcross Advantage 4 Significant scale of pipeline and processing assets Operating stability through interconnected system Extensive footprint in the prolific Eagle Ford and Gulf Coast area Blue chip, active producer customer base Full spectrum of s
Slide 6: Southcross Focus
May 2015 – NAPTP MLP Conference Presentation 5 Southcross Focus Outstanding Operational Performance Aggressively Growing Our Business Growth in Distributions Deliver on Our Core Values Execute on Our Strategy
Slide 7: South Texas Assets
May 2015 – NAPTP MLP Conference Presentation Pipeline (miles) Gas Processing Capacity (MMcf/d) Fractionation Capacity (MBbls/d) Holdings 559 - 63 SXE 3,126 685 27 South Texas Assets Premier Strategic Footprint with Scale to Succeed in the Eagle Ford Holdings SXE Sour Gas Treating Facility Fractionat
Slide 8: Eagle Ford Shale: breakeven oil prices
May 2015 – NAPTP MLP Conference Presentation Eagle Ford Shale 7 Core Eagle Ford remains one of the country’s most economic plays Source: Credit Suisse, April 30, 2015 Note: Breakeven oil price defined as 15% after-tax IRR. Natural Gas price held constant at $3.00/Mcf Breakeven Oil Prices ($/Bbl) $47
Slide 9: Eagle Ford growth opportunity in production
May 2015 – NAPTP MLP Conference Presentation Eagle Ford Shale 8 Eagle Ford has significant opportunity for growth in production Source: Wood Mackenzie, March 2015 324 341 401 632 1,250 1,540 - 200 400 600 800 1,000 1,200 1,400 1,600 W el ls D ril le d Un co m pl et ed a s o f M ar ch 2 01 5 Source:
Slide 10: Texas Gulf Coast Gas Production Expected to Continue to Grow
May 2015 – NAPTP MLP Conference Presentation Texas Gulf Coast Gas Production Expected to Continue to Grow 9 BTU Analytics' forecast anticipates that Gulf Coast gas production will continue to grow, adding an additional 2 Bcf/d by 2019 Texas Gulf Coast Region Gas Production per Day Source: BTU Analyt
Slide 11: Processing Volume Ramp
May 2015 – NAPTP MLP Conference Presentation Processing Volume Ramp 10 Volumes have been increasing significantly since combination transaction closed in August 2014 100 150 200 250 300 350 400 450 500 550 600 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q u a rter ly A v erage P ro c e s s in g V o lu m e s ( B B tu
Slide 12: Full Spectrum of Services Creates Competitive and Economic Advantages
May 2015 – NAPTP MLP Conference Presentation Full Spectrum of Services Creates Competitive and Economic Advantages 11 Wellhead Gathering and Compression Gas Processing Plants Y-Grade Fractionation Facilities Natural Gas End Users Transportation Lines / Storage NGL End Users NGL & Residue Marketing 2
Slide 13: Southcross is Well-Positioned in the Eagle Ford Region
May 2015 – NAPTP MLP Conference Presentation Southcross is Well-Positioned in the Eagle Ford Region 12 Karnes / De Witt Region Frio / La Salle Region Webb / Dimmit Region McMullen Region Corpus Christi Region Woodsboro Bonnie View Gregory Robstown Holdings SXE Sour Gas Treating Facility Fractionator
Slide 14: Blue Chip Customer and Contract Base
May 2015 – NAPTP MLP Conference Presentation 13 Blue Chip Customer and Contract Base Minimum volume commitments, acreage dedications and captive volumes should provide a solid and growing base of gas supply October November 2015E Southcross Processing Capacity Commodity Exposure 23% Note: Data from
Slide 15: Southcross Delivers Gas to Attractive End-use Markets
May 2015 – NAPTP MLP Conference Presentation • System provides interconnects to every interstate pipeline in the region and diverse market outlets • Local markets provide incremental downstream margins • Multiple gas sale outlets including direct connections to industrial and electric generation mar
Slide 16: Lower Gulf Coast Projects Fuel Growth
May 2015 – NAPTP MLP Conference Presentation 15 Lower Gulf Coast Projects Fuel Growth Refining Projects • Valero upgrading 325kb/d Corpus Christi refinery • Flint Hills is currently reconfiguring its 230kb/d Corpus Christi West Refinery • Martin Midstream, Magellan Midstream and Trafigura constructi
Slide 17: Southcross Connects to Multiple NGL Markets in Corpus Christi Area
May 2015 – NAPTP MLP Conference Presentation Southcross Connects to Multiple NGL Markets in Corpus Christi Area 16 Corpus Christi Fractionator Markets Export Terminal Bonnie View Gregory Trafigura Export Active Oxy Export Approved Martin Export Active Robstown • Advantaged Southcross footprint in ex
Slide 18: Robstown Fractionator
May 2015 – NAPTP MLP Conference Presentation Overview Robstown Fractionator 17 • Train B of the two-train 63,000 Bbl/d Robstown Fractionator began fractionating Y-grade in March 2015 – Performance testing for Train B is completed – Train A is expected to begin operating by July 2015 • Delivers a sub
Slide 19: Significant Growth Achievable From Existing Capacity
May 2015 – NAPTP MLP Conference Presentation Significant Growth Achievable From Existing Capacity 18 1 Assumed margin of $0.50 to $1.00 per mcf/d Significant available processing capacity presents cash flow growth opportunity 332 MMcf/d 431 MMcf/d 436 MMcf/d August 2014 (Date of Combination) Southcr
Slide 20: Two New Fractionation Facilities Available for Purity NGL Production
May 2015 – NAPTP MLP Conference Presentation Two New Fractionation Facilities Available for Purity NGL Production 19 SXE Y-Grade Production Q1 2015 Average 41 MBbls/d(1) SXE Y-grade Production at Full Processing Capacity 64 MBbls/d SXE Fractionation Capacity 27 MBbls/d 63 MBbls/d Holdings Robstown F
Slide 21: Drop-Down Acquisition Summary
May 2015 – NAPTP MLP Conference Presentation Drop-Down Acquisition Summary 20 Transaction Benefits • Provides stable cash flows • Immediately accretive to DCF • Deleveraging to balance sheet • Enhanced leverage covenants and financial flexibility through credit amendment • Contributes to integrated
Slide 22: Map of Drop-Down Assets
21 Map of Drop Down Assets Note: Compression icons are for illustrative purposes and not indicative of precise location. Compression Assets Valley Wells System NGL Pipelines Map of Drop-Down Assets
Slide 23: Drop-Down Inventory
May 2015 – NAPTP MLP Conference Presentation 600 miles of sweet and sour gas gathering lines 100 MMcf/d sour gas treating facility; expandable to 300 MMcf/d ~300,000 acres dedicated from 18 producers Lancaster System NGL Pipeline System Drop-Down Inventory 22 Sour Gas Treating Facilities Robst
Slide 24: Rapidly Building Our Footprint
May 2015 – NAPTP MLP Conference Presentation 23 Rapidly Building Our Footprint Aug ‘14 May ‘15 Feb ‘15 Nov ‘14 Eagle Ford Gathering Acquisition Completed bolt-on acquisition of a natural gas gathering system in McMullen County, TX, located near SXE’s existing rich gas pipeline network First Drop-Dow
Slide 25: Investment Merits
May 2015 – NAPTP MLP Conference Presentation 24 Investment Merits Investment Merits • High quality assets – Premier midstream platform in the prolific Eagle Ford and South Texas area – Fully integrated midstream platform with connectivity to quality end-use markets – Well-positioned for growth of Co
Slide 26: Non-GAAP financial measures
May 2015 – NAPTP MLP Conference Presentation We report our financial results in accordance with accounting principles generally accepted in the United States, or GAAP. We also present the non-GAAP financial measures of Adjusted EBITDA, gross operating margin and distributable cash flow. We define Ad
Slide 27: Reconciliation to Adjusted EBITDA
May 2015 – NAPTP MLP Conference Presentation 26 Reconciliation to Adjusted EBITDA (Dollars in Thousands) Reconciliation of net (loss) income to Adjusted EBITDA 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 Net (loss) income 674$ (1,289)$ (2,961)$ (24,778)$ (2,296)$ (10,751)$ Add (ded
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