Forward-Looking Statements: This presentation includes certain statements that are or may be deemed to be forward-looking statements.

Transcription

1 November 29, 2012

2 Forward-Looking Statements: This presentation includes certain statements that are or may be deemed to be forward-looking statements. Generally, the use of words such as may, will, expect, intend, estimate, projects, anticipate, believe, assume, could, should, plans, targets or similar expressions that convey the uncertainty of future events, activities, expectations or outcomes identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. These forward-looking statements include statements concerning expected results of operational business segments for 2012, anticipated benefits from our acquisitions of assets and businesses, projections concerning our business activities in the Gulf of Mexico, including potential future benefits from increased regulatory oversight of well abandonment and decommissioning activities, financial guidance, estimated earnings, earnings per share, and statements regarding our beliefs, expectations, plans, goals, future events and performance, and other statements that are not purely historical. These forwardlooking statements are based on certain assumptions and analyses made in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond our control. Investors are cautioned that any such statements are not guarantees of future performances or results and that actual results or developments may differ materially from those projected in the forward-looking statements. Some of the factors that could affect actual results are described in the section titled Certain Business Risks contained in our Annual Report on Form 10-K for the year ended December 31, 2011, as well as other risks identified from time to time in our reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. Non-GAAP Financial Measures: During the course of this presentation, we may refer to numerical measures that are or may be deemed to be non-gaap financial measures. Supplemental financial disclosures for these measures, including the most directly comparable GAAP measures and associated reconciliations, are included in these presentation materials and available on our website at tetratec.com. Supplemental financial disclosures are not substitutes for financial information prepared in accordance with GAAP and should be considered within the context of our complete audited financial results for the given period, which are also available on our website. Further Disclosure Regarding the Use of Non-GAAP Measures: TETRA defines net debt as the sum of long-term and short-term debt on its consolidated balance sheet, less cash, excluding restricted cash on the consolidated balance sheet and excluding the debt and cash of Compress Partners, L.P. Management views net debt as a measure of our ability to reduce debt, add to cash balances, pay dividends, repurchase stock, and fund investing and financing activities. Management views revenue excluding Maritech, cash from operating activities excluding Maritech, and EBITDA excluding Maritech as useful measures to asses our performance in prior periods following the sale of substantially all of our Maritech segment operations. EBITDA excluding Maritech, a performance measure used by management, is defined as net income (loss) plus: (1) interest expense (net of interest income), (2) income tax provision, and (3) depreciation, depletion, amortization, accretion and impairments, all of which are calculated excluding our Maritech operations. EBITDA excluding Maritech is not defined under GAAP and does not purport to be an alternative to net income or other GAAP financial measures as a measure of operating performance. Because not all companies use identical calculations, our presentation of EBITDA excluding Maritech may not be comparable to other similarly titled measures of other companies. Management views EBITDA excluding Maritech as useful to investors and other external users of our consolidated financial statements as an additional tool to evaluate and compare our operating performance, because EBITDA is widely used by investors to measure a company s operating performance without regard to items such as interest expense, taxes, depreciation, depletion, and amortization, which can vary substantially from company to company. The reconciliation included in the Financial Data Appendix to this presentation is not a substitute for financial information prepared in accordance with GAAP, and should be considered within the context of our complete financial results for the periods indicated, which are available on our website at tetratec.com. 1

3 Company Overview Strategy Business Units Financial Information 2

4 Company Overview 3

5 TETRA Technologies, Inc. NYSE: TTI Avg. Shares Outstanding for the quarter ended 9/30/12: 77.3 million Market Capitalization (1) based on 11/26/12 stock price: $530.5 million Enterprise Value (1) based on 11/26/12 stock price: $883.1 million 3-Month Average Daily Trading Volume as of 11/26/12: 770,000 shares Compressco Partners, L.P. NASDAQ: GSJK Market Capitalization (1) based on 11/26/12 unit price: $271.0 million Current Annualized Distribution: $1.59 per unit (2) Yield, based on annualized distribution and 11/26/12 unit price: 9.1% (1) Non-GAAP financial measures are reconciled to the nearest GAAP measure in the Financial Data Appendix to this presentation. (2) Based on the current quarterly distribution rate of $ per unit. 4

6 FLUIDS PRODUCTION TESTING COMPRESSCO OFFSHORE SERVICES 5

7 Total employees as of 12/31/2011: 3,125 Corporate Headquarters Operations Offices 6

8 Consolidated Revenues (1) $ millions $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 1st 9 Months st 9 Months 2012 International revenues as a percentage of total revenues increased to 27% in the 1 st 9 months of 2012 from 23% in the same period of 2011 US International (1) Consolidated revenues exclude revenues attributable to the Maritech segment. 7

9 TETRA s customer base includes: Customers focused on mature oil fields and emerging markets, such as shale plays Customers with a presence in gas, oil and liquids Mix of customers is very broad, including: - Major and National oil companies - Large and small independents - Oilfield service companies - Industrial customers TETRA s broad customer base reduces exposure to any segment, product mix or geography 8

10 TETRA s balanced business mix: Service Offerings Onshore and Offshore Domestic and International Oil, Gas & Liquids Manage through cycles Flexible balance sheet to execute growth strategy and capitalize on opportunities 9

11 Strategy 10

12 Be the preferred supplier of well completion, well testing, compression-based production enhancement, and decommissioning services operating onshore and offshore in the major producing regions of the world Maintain leading market positions with our established services Grow new and expanded service offerings and increase our geographic footprint through acquisition and growth capital investment 11

13 Investing in high growth markets $163 million of acquisitions in Production Testing Compressco IPO to fund growth Fluids capacity additions International growth Offshore heavy-lift capacity enhancement Repositioning assets to North American liquids market Right-sizing the Offshore Services segment to better reflect current market conditions Reduced headcount by 42 (primarily support functions) Disposing of underperforming assets Targeted annual savings of $15 million and cash proceeds from disposal of assets of $20 million Accelerating completion of Maritech abandonment and decommissioning work Implementing process enhancements to improve working capital management 12

14 Existing operations and recent acquisitions operate under the umbrella of TETRA s established infrastructure Health, environment & safety Global supply chain and procurement Shared administration and accounting Shared sales force, where beneficial Expanded geographic footprint provides significant pullthrough revenue opportunities Onshore US and Canada Production Testing and Completion Fluids operations International Production Testing, Completion Fluids and Compressco In Latin America and South America, Production Testing, Completion Fluids and Compressco 13

15 Business Units 14

16 High value fluids franchise effectively competing against SLB, HAL & BHI A low-cost provider of high-end CBFs to GOM and selected other markets Control manufacturing chain and product quality Long-term bromine supply agreement provides secure sourcing and cost stability Positioned to capture share of growing deepwater markets with more complex wells Increasing our penetration of onshore shale basins with frac water handling and treatment services Continue to improve production rates and operating efficiencies at El Dorado, Arkansas calcium chloride plant Fluids Division derives revenue from calcium chloride sales to oil & gas and other sectors 15

17 One of the largest fleets of onshore flowback well testing equipment in the U.S. (1) Approximately 80% of our U.S. fleet is deployed in shale basins Fleet mobility gives us the flexibility to respond to changing market conditions Expanding global footprint One of the largest production testing companies worldwide Broadening scope of our well testing and early production capabilities (1) Source: Company estimate 16

18 $163 million acquisitions in 2012 Expanding our international foot print: >50% revenue growth is outside the US Assimilated 500 employees in global operations $65.0 million Rig Cooling Services International Offshore Markets $42.5 million Flow Back Services US - Appalachia & Rockies $55.5 million Flow Back Services Canada and US Williston & Bakken Current emphasis on integration and leveraging cross selling services 17

19 Capital investment in proprietary technology to provide complete, cost effective services that manage the entire lifecycle of frac water Extensive experience in unconventional oil and gas shale plays 18

20 Rapid deployment for shorter turnaround time between jobs and improved operational efficiencies Faster rig up/rig down, reduced transportation and risk exposure, lower road wear and tear Ability to blend process water from multiple sources in a patent-pending manifold 19

21 Compressco is a provider of compression-based production enhancement services, including both conventional wellhead compression services, unconventional compression services, and in certain markets, well monitoring and sand separation services. Provides services to a broad base of natural gas and oil exploration and production companies operating throughout many of the onshore producing regions of the United States. Internationally, significant operations in Mexico and Canada and a growing presence in certain countries in South America, Eastern Europe, and the Asia-Pacific region. GasJack and the VJack units provide production enhancement services on natural gas wells and oil wells, respectively. 20

22 Compact, 46 horsepower GasJack unit performs wellhead compression, liquids separation, and optional gas metering from one skid Reliable, fuel efficient and easy to transport Low emission designed to meet all applicable EPA and regulatory standards 40, 25 and 20 horsepower VJack units are designed to provide production enhancement services in mature oilfields and environmentally sensitive markets The VJack generates zero engine driven emissions Fleet of 3,694 compressor units as of 9/30/12 Avg. utilization for the 9 months ended 9/30/12 increased 6.2% over the 2011 period GasJack Unit VJack Unit 21

23 Conventional Services primarily applied to mature gas wells with low formation pressures; also effectively utilized on newer gas wells that have experienced significant production declines and gas wells characterized by lower formation pressures Production enhancement for dry gas wells and liquid loaded gas wells Backside auto injection systems monitor tubing pressure to redirect gas flow into the casing annulus as needed Unconventional Services used primarily in connection with oil and gas liquids production Vapor recovery captures gas vapors from oil storage tanks Casing gas systems enhance oil production by reducing down-hole pressure As of year end 2011, over 20% of our working units were utilized in liquidsrelated applications, up from 3% at year end 2008 Vapor Recovery captures gas vapors directly from storage tanks 22

24 A leading provider of mid-to-late-life well services in the GOM Integrated suite of services - Leading Heavy Lift provider in the Gulf of Mexico market - Leading Well P&A provider in the Gulf of Mexico market - Leading provider of diving and cutting services Heavy lift Well P&A Diving & Cutting Project management and consulting leverage highly complementary suite of services 23

25 Financial 24

26 Excluding Maritech, 3Q 2012 consolidated revenues increased by $33.2 million, or 16.6%, over 3Q For the Production Testing segment, incremental revenues and profits from the 2012 acquisitions and strong international growth more than offset weakness in the domestic market. Compressco s profitability improved in 3Q, driven primarily by capital investment in international growth. This strong 3Q performance and a favorable forecast enabled Compressco to increase its 3Q cash distribution by $0.01 per outstanding unit. The Offshore Services segment has accelerated its cost reduction efforts by eliminating 42 staff positions, primarily in support functions. Reaffirmed revised 2012 earnings guidance of $0.60 to $0.70 per fully diluted share in 3Q results announcement. 25

27 As of Sept. 30, 2012 ($ millions) Cash and cash equivalents (excluding Compressco Partners cash) $10.2 Debt Balances Outstanding TETRA credit facility $57.2 Senior Notes and Other $305.7 Total debt (excluding Compressco Partners debt) $362.9 Net debt (1) $352.6 TTM EBITDA (excluding Maritech) (1) $144.6 Net Debt/TTM EBITDA excluding Maritech (1) 2.44 TETRA credit facility capacity (as of 11/9/2012) Amount outstanding (excluding letters of credit) $71.0 Availability $198.6 Cash flow from operating activities for the 12 months ended 9/30/12, excluding Maritech (1) $65.1 (1) Non-GAAP financial measures are reconciled to the nearest GAAP measure in the Financial Data Appendix to this presentation. 26

28 Since 12/31/2010, we have sold essentially all of Maritech s proved reserves Maritech s decommissioning liabilities have been reduced from $266 million as of December 31, 2010 to $99.5 million as of September 30, 2012 During 3Q 2012, completed plugging and abandonment of wells associated with downed structures The remaining decommissioning liabilities represent future work for our Offshore Services segment We expect to accelerate a portion of the remaining work into 4Q 2012 and the first quarter of 2013, with the objective of completing the work as soon as possible 27

29 (thousands, except per share amounts) Market Capitalization: TTI Market price per share on 11/26/2012 $ 6.87 Average number of shares outstanding for 9 months ended 9/30/ ,226 Market Capitalization $ 530,543 Enterprise Value: TTI Market capitalization based on 11/26/2012 stock price $ 530,543 Total debt, excluding Compressco Partners' debt, as of 9/30/ ,825 Less: Cash, excluding Compressco Partners' cash, as of 9/30/2012 (10,245) Enterprise Value $ 883,123 Market Capitalization: GSJK Market price per unit on 11/26/2012 $ Average number of units outstanding for 9 months ended 9/30/ ,430 Market Capitalization $ 270,951 (in thousands) Compressco Partners Distributable Cash Flow Nine Months Ended September 30, 2012 Net income $ 11,432 Provision for income taxes 2,396 Depreciation and amortization 9,721 Interest (income) expense, net 2 EBITDA $ 23,551 Less: Current income tax expense (1,785) Maintenance capital expenditures (305) Plus: Non-cash cost of compressors sold 68 Equity compensation 1,313 Interest income (expense) (2) Distributable cash flow $ 22,840 28

30 ($ thousands) Reconciliation of Net Debt and Net Debt/Trailing Twelve Month EBITDA Excluding Maritech (1) Net Debt components as of 9/30/2012 Total debt, excluding Compressco Partners' debt $ 362,825 Less: cash, excluding cash held by Compressco Partners (10,245) Net Debt $ 352,580 TTM EBITDA excluding Maritech components as of 9/30/2012 Net income (loss) attributable to TETRA stockholders - TTM $ (5,131) Net interest expense - TTM 16,571 Income tax (benefit) provision - TTM (4,280) DD&A (2) - TTM 76,808 TTM EBITDA 83,968 Less: Maritech income (loss) before taxes - TTM (64,611) Maritech DD&A (2) - TTM 3,984 Maritech net interest (income) expense - TTM 22 TTM EBITDA excluding Maritech $ 144,573 Net Debt/TTM EBITDA excluding Maritech 2.44 ($ thousands) Reconciliation of Cash from Operating Activities Excluding Maritech (1) TTM Cash from operating activities excluding Maritech components as of 9/30/2012 Cash from operating activities $ (22,040) Less: Maritech cash from operating activities (87,163) Cash from operating activities excluding Maritech $ 65,123 (1) See Further Disclosure Regarding the Use of Non-GAAP Measures for additional information regarding the use of non-gaap financial measures. (2) DD&A includes asset impairments and oil and gas dry hole costs under successful efforts accounting. 29

31 Contacts: Stuart M. Brightman, President & Chief Executive Officer Elijio V. Serrano, Sr. Vice President & Chief Financial Officer 281/ Fax: 281/