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| 8-K - FORM 8-K DATED JANUARY 7, 2013 - DAKOTA PLAINS HOLDINGS, INC. | dakota130087_8k.htm |
Exhibit 99.1
Investor Presentation
January 2013
www.dakotaplains.com
1/7/2013
1
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 important factors 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.
1/7/2013
2
Dakota Plains Holdings, Inc. Overview
Dakota Plains Holdings, Inc. (OTCBB:DAKP) is a publicly traded company focused on developing
transloading facilities, marketing and transporting of crude oil and related products from and into
the
Williston Basin oil fields of North Dakota. The Company was founded in 2008 and is based in
Wayzata, MN.
The Company focuses on marketing and transporting oil produced from the Bakken Shale, which
was named the largest on-shore oil deposit in North America by the US Geological Society.
Publicly traded effective March 2012
North Dakota is the 2nd largest oil producing state in the USA.
World Class Relationships
World Fuel Services (NYSE:INT) – $2.7 B market cap, Marketing and Transloading Partner
Prairie Field Services – Trucking Services Partner
Strobel Starostka Transfer – Premier national logistics and transloading operations company
Canadian Pacific – One of two Class 1 rail lines operating in the Williston Basin
Three Business Lines
Transloading Oil Products
Marketing Williston Basin Crude Oil
Trucking
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Dakota Plains Midstream Businesss
Marketing
Upstream
(E&P)
Downstream
(Refinery)
Pipeline = WTI Markets
Crude By Rail = Brent Markets
Trucking
We take title to the crude oil at the
well, pay the transportation related
expenses and sell at the refinery.
Transloading
Average Volumes
Truck = 220 barrels
Tank Car = 680 barrels
Average Volumes
Unit Train = 80-120 Cars
Unit Train = 54k – 82k barrels
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Business Segments
Transloading
50/50 joint venture with World Fuel Services (NYSE:INT)
Land is owned by Dakota Plains, infrastructure investments shared through 2021
Crude focus started August 2010 with two tracks each capable of 40 tank cars
Doubled facility’s onsite capacity in July 2011 to four 40 car tracks
Approximately 5.6 million barrels of crude oil transloaded in 2011
Approximately 5.5 million barrels of crude oil transloaded through September 2012
Marketing
50/50 joint venture with World Fuel Services (NYSE:INT) through 2021
Initiated marketing of crude oil in July 2011
1,104 tank cars under long term lease, average 7 years remaining
Approximately 1.2 million barrels of crude oil marketed in 2011
Approximately 5.7 million barrels of crude oil marketed through September 2012
Trucking
50/50 joint venture with Prairie Field Services through 2021
Established in September 2012
Immediate focus is hauling crude oil
Extensive expansion opportunities
Phase 1 & Phase 2
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January 2013 – 179 Rigs
Source: North Dakota Industrial Commission – https://www.dmr.nd.gov/OaGIMS/viewer.htm. 01-07-13.
Location, Location, Location:
Dakota Plains’ rail terminal is located
in the heart of the Bakken and Three
Forks play in Mountrail County, ND.
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New Town Area Wells – January 2013
Source: North Dakota Industrial Commission – https://www.dmr.nd.gov/OaGIMS/viewer.htm. 01-07-13
Location, Location, Location:
All crude leaving the peninsula is forced
to cross the Dakota Plains Rail Terminal.
Likely 1,300+ wells from 168 current
spacing units in this captive geography.
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New Town – Site Today
GGC Photo 01-17-12
Top Tier Logistics:
The site is connected to the Canadian
Pacific line and is currently managed
by Strobel Starostka, a national leader
in transloading logistics and operations.
Expansion Opportunity:
Dakota Plains and WFS are planning
the addition of a more efficient, double
loop track on this site, to be constructed
without affecting existing operations.
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Williston Basin Crude Production Forecast
Source: North Dakota Pipeline Authority 09-20-12 presentation and December 2012 Monthly Update.
North Dakota
1,000,000 bpd
Q2 2014
2012 North Dakota Results
January = 546,547 bpd
February = 558,558 bpd
March = 577,478 bpd
April = 609,503 bpd
May = 639,277 bpd
June = 660,332 bpd
July = 676,249 bpd
August = 701,409 bpd
September = 729,248 bpd
October = 747,239 bpd
1/7/2013
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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
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Williston Basin Oct. 2012 Takeaway
Source: North Dakota Pipeline Authority December 2012
October 2012
July 2011
ND Avg = 425k bpd
E. MT Avg ≈ 65k bpd
Pipe ≈ 328k bpd
Tesoro ≈ 58k bpd
Rail ≈ 83k bpd
ND Avg = 747,239 bpd
E. MT Avg ≈ 68,907 bpd
Pipe ≈ 310,135 bpd
Tesoro ≈ 65,292 bpd
Rail ≈ 424,396 bpd
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Dakota Plains
New Town
50k bbls/day
3rd Party OK
Storage = 90k
EOG
Stanley
70k bbls/day
NO 3rd Party
Storage = 240k
Lario Logistics
Bakken Oil Express
Dickinson
100k bbls/day
Belle Fourche Pipe
Storage = 210k + 200K
Global/Basin
Zap
70k bbls/day ?
3rd Party OK
No Storage
Port of ND
Minot
30k bbls/day ?
3rd Party OK
No Storage
Savage
Trenton
90K bbls/day
2-Gathering Lines
Storage = 300k
Rangeland COLT
Epping ≈ $70m
80k bbls/day
Beaver Lodge Pipe
Storage = 600k
Hess
Tioga ≈ $48m
70k bbls/day
Gathering
3rd Party ?
Storage = 180k +
Global/Basin
Stampede
70k bbls/day ?
3rd Party OK
Storage = 100k
Centennial Energy
Donnybrook
10k bbls/day ?
3rd Party ?
No Storage
Tesoro Logistics
Refinery
Mandan
58k bbls/day
Musket Corp.
Dore
70k bbls/day
Banner Pipeline
3rd Party OK
Storage = 90k
Enbridge
Berthold
80k bbls/day
Gathering
Storage = 300k
Musket Corp.
Dickinson
8k bbls/day ?
3rd Party OK
No Storage
Great Northern
Power Development
Fryburg ≈ $45m
BakkenLink Pipeline
70k bbls/day
Storage = 300k
Plains All American
Ross – 350 acres
65k bbls/day
Gathering
Robinson Lake Pipe
Storage = 200K +
USD
Van Hook
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.
Pipeline Capacity will
consistently be unable to
handle current and
anticipated Bakken
production volumes.
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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.
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Current Destinations
Galveston, TX
St. John, NB
Irving Oil
Albany, NY
Global
Petroleum
“Philadelphia”
St. James, LA
US Development
and NuStar
Terminals
Shreveport, LA
Calumet
Bakersfield, CA
Kern
Walnut Hill, FL
Genesis Energy
Bakken Pipelines are Limited in their Destination
Crude by rail provides access to markets that
current pipelines cannot access, allowing Dakota
Plains to take advantage of the WTI to Brent/LLS
spread in several markets. Numerous
new
destinations are being constructed and planned.
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New Town - Future
Existing Tracks:
After the loop tracks are finished,
the 10,000 feet of existing tracks
will be used for inbound
commodity transloading.
Loop Tracks:
Expansion at New Town in the
form of a new double loop track
will significantly expand takeaway
capacity.
Margin Improvements:
Loop tracks are the most efficient,
and Class 1 railroads traditionally
incentivize the owners investment
via lower cost structures for
shipments.
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Business Segments – Phase 2
Transloading
Double loop tracks capable of handling 120 car unit trains
All crude by rail operations transition to loop tracks
Crude by rail volumes increase 50-100%
Inbound commodity transloading launches on Tracks 1-4
Additional revenue stream for storage of sand, pipe, ceramics, etc.
Marketing
No down time during construction of loop tracks
Loop track efficiencies drive better Canadian Pacific freight rates
Easily launch 100+ car unit trains
Onsite storage solutions
Volume allocations secured in pipelines
Trucking
Turnkey solution for hauling inbound commodities out to wells
Continued expansion of crude hauling
Enter the water hauling segment
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2013 Operational Targets
EBITDA Range of $25 to $31 Million
10 to 11 Million Barrels Transloaded
11 to 13 Million Barrels Marketed
5 to 5.5 Million Barrels Trucked
Expansion of Offsite Marketed Barrels
Inbound Transloading, Storage & Trucking
Successful Completion of Loop Track
Successful tie-in to localized gathering systems
1/7/2013
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Financial Overview
Dakota Plains reports its financials using the “Equity Method” which nets out nearly all of Dakota Plains’
true revenues and expenses associated with each of their three JVs to one
line item “Other Income” located
below GAAP Revenue and Income from Operations on the Income Statement. As such, normal GAAP top-
line revenue and GAAP income from operations are not appropriate performance metrics.
Dakota Plains has continued to increase production in both barrels transloaded and marketed. Year to date,
Dakota Plains has seen an increase in barrels marketed by 363.5% over 2011
Totals. Barrels transloaded is
also outpacing 2011 Totals and through three quarters is almost even with 2011 Totals.
Price data as of 01-07-13.
Balance Sheet items as of Q3 2012
Note: Enterprise Value calculation includes Restricted Cash Balance
Source: CapIQ, Company Filings
Growth in Operations
Company Financial Highlights
Symbol
DAKP
Stock Price
$3.40
Market Cap (MM)
$142.2
Shares Outstanding (MM)
41.8
52 Week High
$12.50
52 Week Low
$2.25
Cash (MM)
$5.0
Restricted Cash (MM)
$25.0
Total Debt (MM)
$26.6
Enterprise Value (MM)
$138.6
Total Assets (MM)
$39.0
2012 9 Mos. Adjusted EBITDA (MM)
$10.0
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INVESTMENT CASE
Current Market Price approximately 5x 2013 midpoint target EBITDA of $0.67/Share
No Net Debt, Approximately $30 Million in Cash, $26.6 Long Term Debt
Solid and Experienced JV Partners Across all Business Lines
Extensive Expansion Opportunities
Premier Site Offering Competitive Advantage in Marketing & Transloading
Attractive Acquisition Target For Mid-Stream MLP
Bakken Production Expected to More Than Double From Current Level
Dakota Plains Owns all Property and Infrastructure
JV Partners Pay for 50% share of Any Improvements
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Questions and Answers
1/7/2013
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