Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K DATED MARCH 18, 2013 - DAKOTA PLAINS HOLDINGS, INC. | dakota131262_8k.htm |
Exhibit 99.1
Corporate Presentation
March 2013
WWW.DAKOTAPLAINS.COM
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 made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or anticipated in the forward-looking statements. These include risks relating to global economics or politics, our ability to obtain additional capital needed to implement our business plan, minimal operating history, loss of key personnel, lack of business diversification, reliance on strategic, third-party relationships, financial performance and results, prices and demand for oil, our ability to make acquisitions on economically acceptable terms, and other factors described from time to time in the Company’s reports filed with the SEC, including the annual report on Form 10-K, filed March 14, 2013, that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Dakota Plains undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.
3/17/2013
2
Overview
A vertically integrated pure play in Williston Basin crude “export”
Dakota Plains Holdings, Inc.
Ticker Symbol OTC: DAKP
Operations: Williston Basin (Bakken)
Facilities site: New Town, ND
Headquarters: Wayzata, MN
Market Cap: c.$160m
Net Debt: -($4)m
Staff: 5 (plus partners & contractors)
Integrated midstream business:
Crude oil marketing
Crude oil trucking
Crude by rail transloading
50/50 Joint Ventures:
World Fuel Services, marketing
World Fuel Services, transloading
JPND II, LLC, trucking
Service Agreement with Canadian Pacific
Railway
3/17/2013
3
DAKP
Corporate structure
Holding company with world class joint ventures
3/17/2013
4
50%
Canadian
Pacific
Railway
Service
Agreement
Petroleum Transport
Solutions, LLC
(note 1)
50%
Petroleum Transport
Solutions, LLC
(note 1)
JPND II, LLC
(dba Prairie Field
Services)
50%
1 – Petroleum Transport Solutions is an indirect, wholly owned subsidiary of World Fuel Services Corp.
Strategic objectives
Delivering shareholder value through focused & disciplined growth
Exploit long-term demand for crude by rail out of the Williston Basin
Focus on all midstream business segments between wellhead and refinery
Operate efficiently & safely with minimal impact where we do business
Expand scale of assets to increase throughput volumes & reduce unit costs
Provide comprehensive services to supply and offtake customers
Maintain flexibility to incorporate pipeline allocation and alternative transloading products
Expand business to include inbound logistics services
Actively pursue external opportunities
Maintain financial discipline
3/17/2013
5
Business segments
Phase 1
Existing businesses
3/17/2013
6
Purchase
crude oil at
wellhead
Gather via
owned & 3rd
party
Own land &
ladder track
facilities
1,104 leased
tank rail cars
Sell crude oil
at refinery
terminal
Trucking
Transloading
Transportation
Marketing
Toll
Toll
Toll
Hedged spread
Supply & Offtake customers
Connecting WTI and Brent pricing based oil markets
3/17/2013
7
Our Suppliers
Our Offtakers
Business segments
Phase 2
Loop track & Storage project expands base business
3/17/2013
8
180,000 bbls
new, owned
facilities
Purchase
crude oil at
wellhead
Gather via
owned & 3rd
party
Own land &
ladder track
facilities
1,104 leased
tank rail cars
Sell crude oil
at refinery
terminal
Trucking
Transloading
Transportation
Marketing
Tank storage
Own land &
facilities for
unit trains
2 Loop tracks
10 station dump
new, owned
facilities
Truck depot
Toll
Increased volumes
Increased volumes
Pioneer Project - loop track & storage
Increases daily throughput from 30,000 to up to 80,000 bbl/day
3/17/2013
9
50:50 joint project with
World Fuel Services (WFS)
Project underway; DAKP
owns the 192 acres of land
Completion date: Dec ’13
Two 8,300 ft loop tracks
180,000 bbls crude oil
storage, with 90,000 bbls of
planned expansion
10 station truck depot
Gathering system integration
10 tank car fast-loading
building
Gross cost $50m ($25m net
to DAKP)
Pioneer Project - loop track & storage
Rendering of finished facility
3/17/2013
10
Business segments
Phase 3 Inbound
logistics in 2013/14
3/17/2013
11
Purchase
crude oil at
wellhead
Gather via
owned & 3rd
party
Own land &
ladder track
facilities
1,104
leased tank
rail cars
Sell crude
oil at
refinery
terminal
180,000
bbls new,
owned
facilities
Own land &
facilities for
unit trains
10 station
dumps new,
owned
facilities
Storage
Inbound
Trucking
Expand
owned truck
fleet
3rd party &
owned
facilities
3rd party &
leased tank
rail cars
Toll
Toll
Toll
3-Year volumes performance review
Business segments are growing exponentially
3/17/2013
12
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2011 Actual
2012 Actual
2013 Projected
Transloading
Marketing
Trucking
3/17/2013
13
$m
2012
2011
2010
Volume, m bbls
7.7
1.2
-
Trading Commission
Income
79.0
9.1
-
Total Expenses
58.2
4.5
-
Net Income
20.8
4.6
-
Cash at Year End
45.5
20.8
-
Net to DAKP
Net Income
10.4
2.3
-
3-Year performance highlights – marketing
217% increase in daily volume sold year-over-year
Highlights
Daily volume sold in 2012
increased 217% over 2011
Extended joint venture
contract through 2021
Sole marketer at New Town
transloading facility since
February 2012
Substantial room for growth
with current utilization around
2/3 of the 1,104 tank cars under
long term lease
3-Year performance highlights - transloading
37% volume increase year-over-year
3/17/2013
14
Highlights
Currently using four ladder
tracks with belly loading of
proprietary tank cars
2012 volume increased 37%
over 2011
Extended transloading joint
venture contracts through 2021
Subcontracted new operations
partner to attain greater
transloading efficiencies
2013 operating ratios expected
to go back in line with 2011
$m
2012
2011
2010
Volume, m bbls
7.6
5.6
1.8
Revenue
15.9
11.8
3.5
Total Expenses
9.4
4.0
1.6
Net Income
6.5
7.8
1.9
Cash at Year End
8.9
3.4
0.4
Net to DAKP
Net Income
3.2
3.9
1.0
3-Year performance highlights - trucking
New joint venture formed in September 2012
$m
2012
2011
2010
Volume, m bbls
0.4
-
-
Revenue
1.34
-
-
Total Expenses
1.53
-
-
Net Loss
(0.19)
-
-
Cash at Year End
0.2
-
-
Net to DAKP
Net Loss
(0.10)
-
-
3/17/2013
15
Highlights
Joint venture with JPND II that
extends our vertical integration
with delivery of crude oil to the
New Town facility
Began operations in September
2012
Secured long term contract
with our Marketing JV
Dakota Plains does not
contribute CAPEX
Quickly ramping up volumes
Sep’12 – 29K bbls
Dec’12 – 170K bbls
3/17/2013
16
3-Year performance highlights – Dakota Plains Holdings, Inc.
Underlying financials continue to grow year-over-year
Highlights
Became a publicly traded
company via reverse merger in
March 2012
Acquired an additional 124
acres of property at New Town
transloading facility
Entered into new trucking joint
venture in September 2012
$m
2012
2011
2010
Revenue
0.3
0.3
0.2
Operating Expenses
3.1
4.1
0.2
Income from
Transloading JV
3.5
4.2
1.1
Income from
Marketing JV
10.4
2.3
-
Net Income
3/17/2013
17
3-Year performance highlights – balance sheet
Strengthening
balance sheet is a stable platform for growth
Highlights
Restricted cash accounts
have been built up for
marketing & transloading
operations working capital
Some of the restricted cash
will be used for construction
of the Pioneer Project
Completed debt
restructuring in Q4 2012 in
conjunction with $6.1M debt
offering
Of the $26.6m, $4.6m is
now classified as current
debt due March 1, 2014.
$m
EOY 2012
EOY 2011
EOY 2010
Assets
Free cash
2.3
1.8
0.6
Restricted cash
27.4
15.1
0.9
Debt
Long-term
26.6
9.0
-
Current
-
5.5
-
Equity
Stockholders’ Equity
12.4
7.1
2.9
3/17/2013
18
Performance Deliverables
Q1
Q2
Q3
Q4
Gross JV metrics
Trucking Volume, 4 m bbls
Transloading Volumes, 10 m bbls
Marketing Volumes, 10 m bbls
Net Income, >$1m
Pioneer Project by EOY 2013 & under $50m
Net to DAKP
Net Income, $2m
Cash Flow, $26m
Progress in 2013
2013 business plan
2013
higher volumes through efficiency & transformational growth via Pioneer
Business segment plans
Existing & planned growth via expansion and replication of business model
Segment
New Town,
ND
Business Unit
#2
Business Unit
#3
Outbound
Trucking, mm bbls/yr
4 6
future
future
Transloading, mm bbls/yr
10 20
future
future
Storage, bbls
0 180,000
future
future
Marketing, mm bbls/yr
10 20
future
future
Terminals
Future
future
future
Local
Gathering
Future
future
future
Saltwater Disp
Future
future
future
Inbound
Sand
Future
future
future
Pipe
Future
future
future
Diesel
Future
future
future
Storage
Future
future
future
Trucking
Future
future
future
3/17/2013
19
Volume run rate: today after Phase 2 Storage & Loop Project
Underpinning: Williston Basin production & train share
Trains gain share & create barriers for
new pipelines when spread increases
3/17/2013
20
Brent/WTI spread $/bbl
Pipeline volumes
Under-utilized
pipeline capacity
train volumes
Source: North Dakota Pipeline Authority
Underpinning: Williston production
Continued production growth
3/17/2013
21
Production continues to grow with North Dakota now being the second highest producing
state in the US
Production growth from the Williston Basin will continue with a peak around 2022 – 2023
96+% of the production is forecast to be produced in North Dakota
Today
Source: North Dakota Pipeline Authority (average of high and low forecasts)
3/17/2013
22
Underpinning: Brent – WTI spread
Tightening spread expected, but not a deterrent to the business
Source: eia
Marketing margins depend on the spread and alternatives to rail available to producers
As Brent to WTI spread closes, Williston Basin producers can expect less than WTI pricing
Crude by rail with its flexibility to reach North American markets creates a barrier to new pipeline
construction
The current $20 spread is expected to decrease to about $8; pricing at the refiner
transportation segments margins marketing
margins producer wellhead pricing
Out-term spread
has been forecast
to decrease to $8
consistently in
previous forecasts
of the last year
Source: North Dakota Industrial Commission
3/17/2013
23
The Dakota Plains Pioneer
facility in New Town is
ideally located for drilling in
“the heart” of the Williston
Basin
Producers on the peninsula
have access to a ready,
reliable and optimally
priced market via the DAKP
business
About 2,000 wells are
forecast to be drilled on the
peninsula in the coming
years
The Dakota Plains Pioneer
is at the end of the
Canadian Pacific line, or
conversely, is the first
facility available to local
producers
Underpinning: upstream activity continues
Development & down-spacing drilling expected to continue
Conclusions
Dakota Plains has created a safe, reliable and cost-advantaged market
outlet to crude oil producers in the heart of the Williston Basin
Through the strength of its joint ventures and service agreements, Dakota
Plains is poised to grow dramatically in the coming years
With the Pioneer Project construction underway, the operations will grow
from 30,000 barrels per day of capacity to up to 80,000 barrels per day by
year-end 2013
Business segments that include trucking, transloading, and marketing
today will expand in 2014 to include storage and inbound commodity
logistics services to local producers
Business and competitive dynamics underpin a consensus industry view
that crude by rail is a long-term proposition
3/17/2013
24
Appendix
Williston Basin Crude Oil Pipelines
Source: North Dakota Pipeline Authority 09-20-12.
Tesoro 68,000 bbls/day
˜
˜
Enbridge 235,000 bbls/day
˜
˜
Belle Fourche, Bridger, Butte,
Little Missouri & Plains 145,000 bbls/day
˜
˜
TransCanada ? bbls/day
˜
˜
Total Capacity Roughly 448,000 bbls/day
˜
˜
Tesoro Mandan
Refinery
Baker, MT
3/17/2013
26
Dakota Plains
New Town - CP
50k bbls/day
3rd Party OK
Storage = 90k
Lario Logistics
Bakken Oil Express
Dickinson - BNSF
100k bbls/day
Belle Fourche Pipe
Storage = 210k + 200K
Global/Basin
Zap - BNSF
70k bbls/day ?
3rd Party OK
No Storage
Savage
Trenton - BNSF
90K bbls/day
2-Gathering Lines
Storage = 300k
Inergy Midstream
Epping - BNSF
80k bbls/day
Beaver Lodge Pipe
Storage = 600k
Hess
Tioga - BNSF
70k bbls/day
Gathering
3rd Party ?
Storage = 180k +
Global/Basin
Stampede - CP
70k bbls/day ?
3rd Party OK
Storage Plan = 100k
Centennial Energy
Donnybrook- CP
10k bbls/day ?
3rd Party ?
No Storage
Musket Corp.
Dore - BNSF
70k bbls/day
Banner Pipeline
3rd Party OK
Storage = 90k
Centennial Energy
Dickinson - BNSF
8k bbls/day ?
3rd Party OK
No Storage
Great Northern
Power Development
Fryburg - BNSF
BakkenLink Pipeline
70k bbls/day
Storage = 300k
Plains All American
Van Hook - CP
65K bbls/day?
3rd Party OK
Storage 12k + 285K
ND Crude By Rail Sites
Rail has a Bright Future:
Pipeline companies such as
Enbridge and Plains All
American, as well as top
operators like EOG and
Hess have made substantial
investments in Williston
Basin crude
terminals.
3/17/2013
27
Plains All American
Ross – BNSF
65k bbls/day
Gathering
Robinson Lake Pipe
Storage = 200K +
EOG
Stanley - BNSF
70k bbls/day
NO 3rd Party
Storage = 240k
Enbridge
Berthold - BNSF
80k bbls/day
Gathering
Storage = 300k
Port of ND
Minot - BNSF
30k bbls/day ?
3rd Party OK
No Storage
Tesoro Logistics
Refinery
Mandan
58k bbls/day
Enserco
Gascoyne
???
Pipeline Capacity will
consistently be unable to
handle current and
anticipated Bakken
production volumes.
Crude Oil Pipelines & Markets
Are New Pipelines such as Keystone a Threat to
Dakota Plains?
Keystone’s capacity is projected at 700K BOPD.
600K oil sand barrels will already be in the pipe as it
crosses the US border. Other pipeline projects are
many
years out, but once online, Dakota Plains may
transition its marketing efforts to pipeline if needed
and use rail for both outbound crude and inbound
commodities and supplies.
3/17/2013
28