TETRA Technologies, Inc. CSI Compressco LP. June 2016

Transcription

1 TETRA Technologies, Inc. CSI Compressco LP June 2016

2 Forward Looking Statements 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 2016, 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 Mid-Point, 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 forward-looking 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, 2015, 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. Further Disclosure Regarding the Use of Non-GAAP Measures: TETRA and CSI Compressco LP define 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 CSI Compressco LP. 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 adjusted revenue, cash from operating activities excluding Maritech, and Adjusted EBITDA as useful measures to assess our performance in prior periods following the sale of substantially all of our Maritech segment operations. Adjusted EBITDA, 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. Adjusted EBITDA is not defined under GAAP and does not purport to be an alternative to EBITDA, net income or any other GAAP financial measures as a measure of operating performance. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Management views Adjusted EBITDA 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 Adjusted EBITDA is a measurement of 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. 2

3 Corporate Profiles Stock Market NYSE: TTI NASDAQ: CCLP Recent Share Price (1) $5.81 $7.92 Market Capitalization (1) $467.4M $262.8M Enterprise Value (1) $760.3M $843.3M Number of Shares/ Units Outstanding (2) 80.4M 33.2M Average volume (last 3 months) (1) 1,315, ,497 Distribution Annualized (3) $1.51 (0%) (4) Distribution Yield (1) 19.1% % Owned by TTI 44% Headquarters The Woodlands, TX Midland, TX (1) As of 6/22/16 (2) As of 5/10/16 (3) Q Annualized (4) Q increase in distribution over Q

4 Recent Accomplishments TETRA Completed $60M equity offering Free cash flow of: o Q $18M (1) o Total year 2016 guidance of $30M-$50M Leverage ratio of 2.08X (pre-equity offering) Next CS Neptune Gulf of Mexico project scheduled for Q Awarded significant Permian Basin water transfer project CSI Compressco Coverage ratio of 1.1X and Q free cash flow of $14M (1) Leverage Ratio of 4.80X in Q1-16 Amended revolver covenants to 5.75X from 12/31/2016 to 9/30/2017 to provide financial flexibility (1) See appendix for reconciliation 4

5 Business Profile 2015 OFFSHORE SERVICES $122M 11% COMPRESSION $458M 40% PRODUCTION TESTING $134M 12% FLUIDS $424M 37% Compression, Fluids and PT represent 89% of revenue 5

6 Fluids

7 Fluids Chemicals/Completion Fluids Only vertically integrated service provider globally Seamless supply channel from manufacturing plants to CBF blending facilities Significant infrastructure Strong global competitor Introducing new technology, products and services Advantaged cost position in non-oil and gas markets proximate to manufacturing plants Water Management Treatment, transfer, automation and monitoring capabilities Unique cost effective solutions for frac water management Proprietary technology with an exclusive supplier agreement Rapid deployment for shorter turnaround time between jobs Deployed in most of the key U.S. shale basins 7

8 Fluids - Calcium Chloride Footprint Leading supplier in Europe and North America Production Capacity 1.5 Million Tons Liquid 200,000 Tons Flake Liquid CaCl 2 Plant Liquid/Dry CaCl 2 Plant Third Party Supply Agreements New Supply Hamm, Belgium 8

9 Fluids - Brominated Clear Brine Fluids Footprint Long-term bromine supply agreement North Sea Stable, predictable cost advantage Gulf of Mexico Middle East Co-producer swap and toll agreement Brazil TETRA s markets for CBFs TETRA s plant and supply location CBF Plant 9

10 Fluids - North America Footprint Strong Market Network and Presence 280 Leased Cars12 Barges13 Terminals 5 Warehouses Liquid CaCl 2 Plant Liquid/Dry CaCl 2 Plant Liquid Terminal Dry Warehouse CBF Plant 10

11 Fluids Financial Overview Revenue (In $ Millions) 2015 Revenue Profile $150 $100 $105 $117 $105 $110 $99 $123 $111 $91 $50 $59 International 28% $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q United States 72% Adjusted EBITDA (In Millions) and Margins (1) $50 $40 $ % 20.7% 23.6% 25.0% 26.8% 33.7% 38.2% 28.4% 45% 35% 25% $20 $10 $0 12.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 15% 5% -5% Onshore 56% Offshore 44% Adj. EBITDA Adj. EBITDA Margin 2015 represented record margins (1) See appendix for reconciliation to nearest GAAP measures 11

12 Production Testing

13 Production Testing Frac Flowback Production Testing Optima Early Production Facilities Remove residual sand and debris to allow production to sales Access and evaluate well performance under various conditions Offshore Rig Cooling suppresses heat generated by high-rate flaring Deliver engineered customized process solutions 13

14 Production Testing Focused on Key Markets United States one of the largest production testing companies operating in all shale basins 2015 Geographic Revenue Footprint Saudi Arabia 100% owned, 12 year presence, multiple onshore/offshore contracts Mexico over a 20 year presence Early production facilities in select Latin America and Middle East locations 46% United States 54% International 14

15 Production Testing Financial Performance Strong Cost Discipline and Customer Diversification Tactics US America Rig Count (1) -64% Revenue 2016 Q1-54% Adjusted EBITDA Margins (2) 2015 Q Q1 18.0% 10.6% Revenue (In $ Millions) $60 $57 $50 $50 $44 $42 $40 $37 $35 $33 $29 $30 $20 $20 $10 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Decremental Adj. EBITDA Margins 26.6% Adjusted EBITDA (In $ Millions) & Margins (1) $ % 30% Will benefit quickly from any market recovery $15 $12 $9 $6 14.9% 16.1% 21.7% 18.0% 19.7% 15.9% 14.2% 10.6% 25% 20% 15% 10% $3 5% $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0% Adj. EBITDA Adj. EBITDA Margin (1) Q vs Q (2) See appendix for reconciliation to GAAP 15

16 Offshore Services

17 Offshore Service Business Model Heavy Lift Cutting Services Downhole Services Diving Consulting Services Ability to reduce/flex costs #1 or #2 in all our key sectors Cash flow positive in the valley of the cycle Light asset approach with total investment of $88 million 17

18 CSI Compressco LP

19 Q Highlights Cash Flow Positive Operations in Challenging Business Climate Q Revenue of $81.7M Q adjusted EBITDA [1] of $25.4M Q adjusted EBITDA margin [1] of 31.1% Q pre-distribution free cash flow [1] of $13.7M Q total distribution [1] of $12.8M Q distribution coverage ratio [1] of 1.11x 1,380 Hp Compression Service Field Gathering Midland County, TX (1) See Appendix for reconciliations of Non-GAAP financial measures 19

20 Compression Overview Physical Requirement for Compression is Disassociated from the Price of Oil and Natural Gas Compression is required multiple times throughout the value-chain from production to consumption Diversity of customer needs supports a wide variety of compression service and product offerings Compression Services Aftermarket Services Sold Equipment Consumer Dry Gas Production Wellhead Reservoir Gathering Transportation Storage In 2014, the U.S. consumed 26.7 trillion cubic feet of natural gas [1] 31% power generation 28% industrial 19% residential Gas Lift other EOR Recirculation for Enhanced Oil Recovery Processing 13% commercial 9% lease and plant fuel; distribution and pipelines Oil Treatment & Refining (1) Source: Energy Information Administration 20

21 CCLP Business Model Vertically Integrated Flexibility for a Wide Range of Customer Compression Needs Shared manufacturing, engineering capability, project management and supply chain resources Common management, inventory and operating infrastructure Technical specialists for installation and commissioning worldwide Compression Services Aftermarket Services New Equipment Sales International Capabilities Fee-based services contracts utilizing CCLP compression services fleet equipment and personnel Fleet sizes ranging from 20 Hp to over 2,000 Hp Broad U.S. footprint and diversified customer base Customizable field maintenance contracts Revitalization, major overhaul and repurposing of customer owned compression equipment Shop services and parts sales Equipment built to standard or customer specifications up to 8,000 horsepower Largely funded through progressive billings Expertise in compression and engine driven pump package engineering, design, and manufacturing ~14% of revenues from international sales and operations Operating footprint in Mexico, Canada and Argentina Partner with TETRA for world-wide reach Portion of Revenue and Gross Margin by Product Line [1] 76% 92% 11% 6% 2% Portion of Total Revenue [2] 13% Portion of Total Gross Margin [2] Compression and Related Services Equipment Sales Aftermarket Services (1) Q Results. Gross Margin is defined as revenues less cost of revenues excluding depreciation and amortization expense (2) Revenue and Gross Margin by Product Line is shown as the portion of total Revenue and total Gross Margin that is attributable to the given product line 2016 CSI Compressco LP 21

22 Compression Services Stability Most Profitable Product Line is also Most Stable Product Line Natural gas consumption in the U.S. continues to increase Compression fleet utilization is largely disassociated from short term fluctuations in commodity prices and drilling activity Diverse geographic deployment of compression fleet Real-time remote monitoring to improve run-time and response time Utilization Fleet Utilization and Composition [1] 801+ Hp 43% Composition 86% 77% Utilization ~873,000 Hp Hp 17% 68% 72% 41% Hp Fleet Application [1] Gathering 66% Gas Lift other EOR 16% 84% Dry gas and gas gathering Dry Gas 18% Bcf / d 30,000 25,000 20,000 15,000 10,000 5,000 - U.S. Natural Gas Consumption [2] Fleet Utilization vs. Economic Variability [2],[3] Fuel and Distribution Commercial Residential Industrial Power Generation Macroeconomic Variability 10% 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% Q % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% CCLP Fleet Utilization Active Hp HH Gas Price WTI Oil Price Rig Count Utilization 1, Horsepower in thousands (1) CSI Compressco utilized Hp, composition, and fleet application as of March 31, 2016 (2) Source: Energy Information Administration; Baker Hughes (3) Utilization and Hp based on management Pro Forma YE combined fleet utilization of Compressco Partners and Compressor Systems, Inc. prior to Compressco Partners acquisition of Compressor Systems, Inc CSI Compressco LP 22

23 Compression Services Geographic Diversity Operating in the Most Prolific Producing Basins in the U.S.A. Bakken HP Distribution by CCLP Region [1] International 4% East 10% South Texas 26% Niobrara Marcellus Utica Mid-Con 18% Monterey San Juan Woodford West 18% Permian Basin 24% Permian Barnett Operating Units Basins Shale Plays Eagle Ford Haynesville Gas Jack on Well Head Service (1) CSI Compressco fleet geography as of March 31, CSI Compressco LP 23

24 Distribution and Cash Management Business Model Generates Cash to Cover Operations and Distributions CCLP Cash Flow Distribution Coverage Ratio [3] and Annualized Quarterly Distributions per Unit [3] $USD in millions $180 $160 $140 $120 $100 $80 $60 $40 $20 Change in Cash Borrowings, $40 Cash Flow from Ops $102 Growth capital $84 Distributions, $68 Maintenance capital $11 Borrowings ($1) Maintenance capital $12 Maintenance capital $1 Distributions, $51 Growth capital $13 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $1.70 $1.72 $1.75 $1.78 $1.81 $1.84 $1.94 $1.98 $2.00 $2.01 $1.51 $ x 1.60x 1.40x 1.20x 1.00x 0.80x 0.60x 0.40x 0.20x $- $15 $13 Sources 2015 Uses Sources 2016 Q1 Uses Uses Cash Flow from Ops Distributions 2016 Distribution [1] and Guided Capital [2] $- Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q x Annualized Quarterly Distribution Distribution Coverage Ratio (1) Assumes current annualized distribution of $1.51 per common unit (2) Management previously provided CapEx guidance of $20M to $30M, inclusive of $12M maintenance capital (3) See Appendix for reconciliations of Non-GAAP financial measures 2016 CSI Compressco LP 24

25 Market Position Compression Services Competitive Landscape 4 th Largest Compression Services Fleet by Hp 4,000 Revenue Generating Hp [3] 3,500 3,354 11% GCA Market share U.S. and Canada [1] 3,000 2,500 9% Market share internationally [2] Hp in thousands 2,000 1,500 1,000 1,427 1, Largest vertically integrated compression provider Archrock (APLP & AROC) CDM USA CSI Compressco 510 JW Others (1) Internal estimate based on data from Gas Compressor Association GCA and considering only markets served by GCA member companies and other quantified fleets (2) Spears & Associates, Inc. Oilfield Market Report 2015 (3) CSI Compressco utilized Hp as of March 31, 2016; others per most recent available data and management estimates 2016 CSI Compressco LP 25

26 Covenants, Debt & Liquidity Amended Credit Facility Leverage Covenants to Provide Additional Flexibility Minimal CapEx required to maintain cash flows No debt maturing before 2019 Positive and predictable free cash flow generation Amended leverage covenants provide compliance cushion Debt [1] and Liquidity [1],[2] Leverage Ratio [1] $700 $600 $500 $565 $589 $599 $589 $ x 5.00x 5.50x 5.50x 4.13x 4.25x 5.25x 5.25x 5.25x 4.80x 4.41x 4.56x 5.50x 5.50x 5.75x 4.00x $USD in millions $400 $300 $200 $100 $213 $199 $133 $99 $65 Leverage Ratio 3.00x 2.00x 1.00x $- Q1 Q2 Q3 Q4 Q1 0.00x Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Liquidity Debt Leverage Ratio Covenant (1) See Appendix for reconciliations of Non-GAAP financial measures (2) Liquidity amounts are subject to compliance with financial covenants and other provisions of the Credit Agreement which may limit borrowings 2016 CSI Compressco LP 26

27 Financial Overview

28 TETRA Earnings Trend TETRA Only Adjusted EBITDA (1) + CSI Compressco Distributions Trailing Twelve Months - Millions $190 $170 $150 $130 $110 $90 $70 TETRA adj. EBITDA CCLP Distributions Cumulative Impact of Many Actions Mitigating Lower Rig Count (1) See appendix for reconciliation 28

29 Two Distinct & Separate Capital Structures $ In Millions As of 3/31/2016 TETRA CSI Compressco Unrestricted Cash $16 $10 Brorrowing Capacity (1) $129 $55 Liquidity (2) $144 $65 Revolver Outstanding $21 $234 Current Portion of LT Debt $0 $0 Long Term Debt $254 $332 Total Debt $275 $566 (1) Borrowing capacity is the lesser of the amount available under the credit agreement or the amount of additional borrowings allowed per the applicable financial covenants. (2) Liquidity is sum of borrowing capacity and unrestricted cash. See appendix for reconciliation to GAAP 29

30 TETRA Equity Issuance Completed equity offering of 11.5M shares at $5.50/share on June 16 $60.4M of proceeds to retire $30M secured notes and $30M to reduce revolver balance simplifying our debt capital structure and reducing debt levels Provides working and growth capital facilitating TETRA to move quickly in a recovery Equity proceeds enhance liquidity to maintain financial flexibility in the event of a prolonged downturn Ensures management s commitment to maintaining company's strong credit profile Preserves company's ability to execute opportunistic tuck-in acquisitions 30

31 TETRA Debt Update Series of steps to simplify and improve our capital structure Tendered for and retired at par $100M of unsecured senior notes Q2-016 Equity proceeds fully retired our secured senior notes TETRA remaining debt consists of $225M revolving credit agreement maturing September 2019 and $125M senior notes with GSO Capital Partners maturing November TETRA is amending the credit agreement to include an increase of the leverage ratio from 3.0X to 4.0X through March 31, 2018 with subsequent step downs, replace the interest coverage with a fixed charge coverage ratio, pledging collateral as security, and maintaining the commitment level at $225M. TETRA is in agreement with GSO to amend the senior note agreement to include an increase of the leverage ratio from 3.5X to 4.5X through March 31, 2018 with subsequent step downs, replace the interest coverage with a fixed charge coverage ratio, pledging collateral as security, and no increase of the interest margin. We are in advanced stages of final documentation negotiation. 31

32 TETRA s Credit Profile Debt and Liquidity (1) Leverage Ratio (2) In $Millions $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 $358 $181 $379 $136 $430 $30 $395 $397 $91 $93 $358 $131 $331 $157 $293 $207 $275 $ x 3.50x 3.00x 2.50x 2.00x 1.50x 1.00x 0.50x 0.00x 2.42x 2.73x 3.38x 2.94x 2.88x 2.36x 2.02x 1.86x 2.08x Liquidity Debt Leverage Ratio Covenant $60M equity offering materially improves liquidity and leverage (1) Liquidity is sum of borrowing capacity and unrestricted cash. See appendix for reconciliation to GAAP. (2) TETRA s leverage ratio is defined in its credit and debt agreements as the ratio of debt and letters of credit outstanding to EBITDA as defined therein. 32

33 No Debt Maturities Until 2019 $400 TETRA excl. CSI Compressco $400 CSI Compressco $350 $350 $300 $300 In $ Millions $250 $200 $150 In $ Millions $250 $200 $150 $100 $100 $50 $50 $ $ Revolver Senior Notes Strong Balance Sheet For Lower For Longer Market No Maturities Until

34 2016 Outlook Initial signs of improving North America onshore environment Expecting uptick in major GoM projects in H2 Guiding towards $30M to $50M positive free cash flow in 2016 for TETRA Generated $18.5 M TETRA free cash flow in 2016 Q1 Generated $13.7 M CCLP free cash flow in 2016 Q1 Focus will remain on free cash flow and selectively investing in quick payback/high return opportunities Will continue to conservatively manage the balance sheet and aggressively attack costs Amended revolver covenants and recent equity offering to provide incremental financial flexibility 34

35 TETRA Technologies, Inc. CSI Compressco LP June 2016

36 Non-GAAP Financial Measures This presentation includes non-gaap financial measures, Adjusted EBITDA, Adjusted EBITDA margin, enterprise value, distributable cash flow liquidity, distribution coverage ratio and debt to Adjusted EBITDA. Adjusted EBITDA is used as a supplemental financial measure by the management to: assess ability to generate available cash sufficient to make distributions to the CSI Compressco s unit holders and general partner; evaluate the financial performance of assets without regard to financing methods, capital structure or historical cost basis; measure operating performance and return on capital as compared to competitors; and determine the ability to incur and service debt and fund capital expenditures. Adjusted EBITDA is defined as sum of EBITDA, non-cash equity compensation expense, and amortization of financing costs, less unusual items. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. Enterprise value is defined as market capitalization plus the sum of long-term and short-term debt on the consolidated balance sheet, less cash, excluding restricted cash on the consolidated balance sheet. Management uses enterprise value as a measure of the market value of the company if it were free of debt. Distributable cash flow is used as a supplemental financial measure by management as it provides important information relating to the relationship between our financial operating performance and our cash distribution capability. Additionally, distributable cash flow is used in setting forward expectations. Distributable cash flow is defined as EBITDA less current income tax expense, maintenance capital expenditures, and interest expense, plus the non-cash cost of compressors sold and equity compensation expense. The distribution coverage ratio is defied as the ratio of distributable cash flow to the quarterly distribution payable on all outstanding common and subordinated units and the general partner interest. Distribution coverage ratio provides important information relating to the relationship between financial operating performance and cash distribution capability. Debt to Adjusted EBITDA is defined as balance of debt at the end of the period divided by last twelve months of Adjusted EBITDA. Liquidity is defined as the availability under the Credit Agreement (consisting of maximum credit commitment, less balance outstanding) plus the sum of unrestricted cash on the consolidated balance sheet. Management views liquidity as a measure of the Company s ability to fund investing and financing activities. These non-gaap financial measures should not be considered an alternative to net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. These non-gaap financial measures may not be comparable to EBITDA, distributable cash flow or other similarly titled measures of other entities, as other entities may not calculate these non-gaap financial measures in the same manner. Management compensates for the limitation of these non-gaap financial measures as an analytical tool by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating this knowledge into management's decision making process. Furthermore, these non-gaap measures should not be viewed as indicative of the actual amount of cash that is available for distributions or planned distribution for a given period, nor should they be equated to available cash as defined in the Partnership's partnership agreement. 36

37 Non-GAAP Reconciliations TETRA Consolidated - Adjusted EBITDA Reconciliation '($ in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes ($5.1) $3.2 ($4.4) $18.7 ($17.6) ($10.7) ($2.5) ($24.8) ($119.9) ($2.1) $18.1 $15.4 ($233.2) ($149.1) Interest Income/Expense $4.6 $4.2 $4.2 $4.2 $4.5 $4.7 $4.6 $9.9 $12.8 $13.8 $12.3 $12.2 $13.1 $14.6 DD&A $18.4 $19.7 $20.1 $20.8 $30.1 $23.0 $22.0 $33.2 $73.5 $38.3 $39.1 $38.9 $82.9 $44.3 Equity Compensation Expense $2.0 $1.9 $1.8 $1.5 $1.6 $1.9 $1.4 $1.5 $2.0 $1.6 $2.6 $3.6 $9.1 $2.4 Special Items $6.2 - $2.0 $0.4 $0.2 $0.0 $4.6 $13.9 $68.3 $1.0 $1.4 $4.0 $180.1 $ Adjusted EBITDA $26.2 $28.9 $23.6 $45.5 $18.8 $18.9 $30.1 $33.8 $36.7 $52.6 $73.5 $74.2 $51.9 $19.1 Revenue $231.1 $208.6 $221.1 $254.3 $225.4 $212.9 $242.5 $306.4 $315.8 $251.1 $316.3 $305.1 $257.6 $169.3 Maritech - Adjusted EBITDA Reconciliation '($ in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes ($22.9) ($4.9) ($23.7) ($15.4) ($20.3) ($6.5) ($10.7) ($23.0) ($30.9) $1.0 ($0.3) ($1.6) ($2.8) ($0.6) Interest Income/Expense $0.1 $0.0 $0.0 - ($0.0) - ($0.0) $0.0 ($0.0) - $0.0 ($0.0) $0.0 - DD&A $0.1 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.3 $0.3 $0.4 $0.4 $0.3 Equity Compensation Expense Special Items Adjusted EBITDA ($22.7) ($4.9) ($23.7) ($15.4) ($20.3) ($6.5) ($10.7) ($22.9) ($30.9) $1.2 ($0.0) ($1.2) ($2.4) ($0.3) Revenue $1.1 $1.2 $1.7 $1.3 $1.4 $1.4 $1.5 $1.0 $0.8 $1.5 $0.4 $0.5 $0.1 $0.1 TETRA excl. Maritech - Adjusted EBITDA Reconciliation '($ in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes $17.8 $8.1 $19.3 $34.1 $2.6 ($4.1) $8.2 ($1.9) ($88.9) ($3.0) $18.4 $17.1 ($230.4) ($148.5) Interest Income/Expense $4.5 $4.2 $4.2 $4.2 $4.5 $4.7 $4.6 $9.9 $12.8 $13.8 $12.3 $12.2 $13.1 $14.6 DD&A $18.3 $19.6 $20.0 $20.7 $30.0 $23.0 $22.0 $33.2 $73.4 $38.1 $38.8 $38.5 $82.4 $44.0 Equity Compensation Expense $2.0 $1.9 $1.8 $1.5 $1.6 $1.9 $1.4 $1.5 $2.0 $1.6 $2.6 $3.6 $9.1 $2.4 Special Items $6.2 - $2.0 $0.4 $0.2 $0.0 $4.6 $13.9 $68.3 $1.0 $1.4 $4.0 $180.1 $107.0 Adjusted EBITDA $48.8 $33.8 $47.3 $60.9 $39.1 $25.4 $40.8 $56.7 $67.6 $51.4 $73.6 $75.4 $54.3 $19.4 Revenue $230.1 $207.4 $219.4 $253.0 $224.1 $211.5 $240.9 $305.3 $315.1 $249.6 $315.9 $304.7 $257.5 $169.2 EBITDA Margin 21.2% 16.3% 21.6% 24.1% 17.4% 12.0% 16.9% 18.6% 21.4% 20.6% 23.3% 24.8% 21.1% 11.5% Impairment charges in DD&A $ $ $34.8 ($0.0) - - $44.2 $10.7 Equity Compensation True Up $6.7 - Adjusted PBT $32.4 $8.1 $21.3 $34.5 $12.5 ($4.1) $12.8 $12.1 $14.2 ($2.1) $19.8 $21.1 $0.7 ($30.9) Adjusted PBT Margin 14.1% 3.9% 9.7% 13.6% 5.6% -1.9% 5.3% 4.0% 4.5% -0.8% 6.3% 6.9% 0.3% -18.3% Note: Starting in 2016 Q1, amortization of financing costs has been included in interest expense due to the SEC accounting changes. Only 2015-Q1 & 2016-Q1 have been adjusted to reflect this change. 37

38 Non-GAAP Reconciliations TETRA excl. Maritech- Adjusted EBITDA Reconciliation '($ in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes $17.8 $8.1 $19.3 $34.1 $2.6 ($4.1) $8.2 ($1.9) ($88.9) ($3.0) $18.4 $17.1 ($230.4) ($148.5) Interest Income/Expense $4.5 $4.2 $4.2 $4.2 $4.5 $4.7 $4.6 $9.9 $12.8 $13.8 $12.3 $12.2 $13.1 $14.6 DD&A $18.3 $19.6 $20.0 $20.7 $30.0 $23.0 $22.0 $33.2 $73.4 $38.1 $38.8 $38.5 $82.4 $44.0 Equity Compensation Expense $2.0 $1.9 $1.8 $1.5 $1.6 $1.9 $1.4 $1.5 $2.0 $1.6 $2.6 $3.6 $9.1 $2.4 Special Items $6.2 - $2.0 $0.4 $0.2 $0.0 $4.6 $13.9 $68.3 $1.0 $1.4 $4.0 $180.1 $107.0 Adjusted EBITDA $48.8 $33.8 $47.3 $60.9 $39.1 $25.4 $40.8 $56.7 $67.6 $51.4 $73.6 $75.4 $54.3 $19.4 CSI Compressco - Adjusted EBITDA Reconciliation '($ in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes $5.9 $5.3 $3.1 $5.3 $6.1 $5.3 $5.4 ($4.0) $3.4 $2.4 $1.5 $2.0 ($152.6) ($104.7) Interest Income/Expense $0.0 $0.1 $0.1 $0.1 $0.2 $0.2 $0.1 $5.0 $7.7 $8.6 $8.0 $8.2 $8.1 $8.8 DD&A $3.5 $3.5 $3.5 $3.7 $3.9 $3.7 $3.8 $13.5 $20.2 $20.0 $20.6 $20.6 $32.4 $26.3 Equity Compensation Expense $0.6 $0.3 $0.4 $0.3 $0.4 $0.2 $0.2 $0.5 $0.6 $0.5 $0.7 $0.5 $0.5 $0.6 Special Items - - $0.2 $0.4 $0.0 - $0.9 $10.6 $2.6 $0.4 $0.0 $0.0 $139.9 $92.6 Adjusted EBITDA $10.0 $9.1 $7.3 $9.9 $10.7 $9.3 $10.4 $25.6 $34.5 $31.9 $30.8 $31.3 $28.3 $23.7 TETRA excl. Maritech and CSI Compressco - Adjusted EBITDA Reconciliation '($ in Millions) Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes $11.9 $2.9 $16.3 $28.8 ($3.5) ($9.4) $2.8 $2.1 ($92.3) ($5.4) $17.0 $15.1 ($77.8) ($43.9) Interest Income/Expense $4.5 $4.1 $4.1 $4.1 $4.4 $4.6 $4.5 $4.9 $5.1 $5.2 $4.4 $4.0 $5.0 $5.8 DD&A $14.8 $16.2 $16.5 $17.0 $26.1 $19.3 $18.2 $19.7 $53.2 $18.1 $18.2 $17.9 $50.0 $17.7 Equity Compensation Expense $1.5 $1.5 $1.4 $1.2 $1.2 $1.7 $1.2 $1.1 $1.3 $1.1 $1.9 $3.2 $8.6 $1.7 Special Items $6.2 - $1.8 ($0.0) $0.2 $0.0 $3.7 $3.4 $65.6 $0.5 $1.4 $4.0 $40.2 $14.4 Adjusted EBITDA $38.8 $24.7 $40.0 $51.0 $28.4 $16.1 $30.3 $31.1 $33.0 $19.5 $42.7 $44.1 $26.0 ($4.3) CCLP Distibutions $5.2 $5.5 $5.6 $5.6 $5.6 $5.7 $5.8 $5.9 $6.8 $7.4 $7.6 $7.7 $7.7 $5.6 TETRA Adj.EBITDA + CCLP Distr. $44.0 $30.2 $45.6 $56.6 $34.0 $21.9 $36.1 $37.0 $39.8 $26.9 $50.4 $51.8 $33.6 $1.3 TTM TETRA Adj. EBITDA + CCLP Distr. $176.3 $166.3 $158.0 $148.6 $129.0 $134.8 $139.8 $154.1 $168.8 $162.7 $137.1 Note: Starting in 2016 Q1, amortization of financing costs has been included in interest expense due to the SEC accounting changes. Only 2015-Q1 & 2016-Q1 have been adjusted to reflect this change. 38

39 Non-GAAP Reconciliations TTI Free Cash Flow Reconciliation Q1-14 Q2-14 Q3-14 Q Q1-15 Q2-15 Q3-15 Q Q1-16 TTI Consolidated Cash from operations $ 36.1 $ 4.6 $ 11.3 $ 56.7 $ $ 27.8 $ 54.3 $ 36.1 $ 77.7 $ $ 25.3 ARO Settlements Capital Expenditures, net of sales proceeds (24.8) (23.2) (31.1) (35.0) (114.1) (46.1) (23.2) (21.9) (22.2) (113.4) (2.0) Free Cash Flow before ARO settlements 24.5 (2.2) (9.2) (17.8) CSI Compressco Cash from operations Capital Expenditures, net of sales proceeds (6.0) (4.9) (17.9) (19.3) (48.2) (37.2) (19.9) (18.9) (19.3) (95.2) (1.4) Free Cash Flow 10.2 (0.2) (7.5) (5.8) (3.3) (4.7) (0.2) (7.6) TTI Only Cash from operations 19.8 (0.2) (4.7) ARO Settlements Capital Expenditures, net of sales proceeds (18.8) (18.3) (13.2) (15.7) (66.0) (9.0) (3.3) (3.0) (2.9) (18.2) (0.6) Free Cash Flow before ARO settlements 14.3 (2.0) (1.7) (13.1) Distributions from CCLP Debt restructuring expenses TTI's Free Cash Flow $20.0 $4.0 $4.2 $57.0 $85.3 ($5.7) $42.9 $30.2 $52.4 $119.8 $

40 Non-GAAP Reconciliations Liquidity $ in millions Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 TTI excluding CSI Compressco TTM EBITDA per Bank Agreement $151.8 $141.9 $129.5 $136.8 $140.8 $155.9 $168.9 $164.8 $140.7 Long Term Debt Revolving credit facility outstanding Discount on Long Term Debt Letters of credit and surety bonds Capital lease obligations Total funded debt Revlolving credit facility, total Amounts currently oustanding (52.8) (74.2) (125.0) (90.0) (91.7) (92.9) (66.1) (22.9) (20.5) Bank letters of credit (9.3) (7.8) (7.5) (7.1) (12.0) (10.3) (9.4) (7.6) (7.6) Revolving credit facility, available Less: Adjustment for leverage capacity Plus: Cash excluding restricted cash Liquidity $ $ $ 30.2 $ 90.6 $ 92.9 $ $ $ $ (1) As defined by credit agreement. 40

41 Non-GAAP Reconciliations Fluids - Adjusted EBITDA Reconciliation '($ in Millions) Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes $18.5 $17.1 $16.5 $12.6 $17.7 $32.6 $33.2 ($2.7) ($0.4) Interest Income/Expense ($0.0) ($0.1) ($0.1) ($0.0) ($0.0) ($0.1) ($0.0) ($0.2) ($0.0) DD&A $7.8 $7.2 $8.5 $14.3 $8.7 $8.8 $8.7 $28.7 $7.4 Stock Option expense Special Items ($2.3) $0.0 - $0.6 $0.1 $0.2 $0.4 $0.1 $0.1 Adjusted EBITDA $24.0 $24.2 $24.9 $27.5 $26.6 $41.5 $42.3 $25.9 $7.1 Revenue $105.1 $116.7 $105.3 $110.3 $99.3 $123.0 $110.6 $91.2 $59.1 EBITDA Margin 22.9% 20.7% 23.6% 25.0% 26.8% 33.7% 38.2% 28.4% 12.1% Production Testing - Adjusted EBITDA Reconciliation '($ in Millions) Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes ($2.8) ($0.2) $3.4 ($66.5) $0.0 ($0.5) ($4.5) ($50.8) ($19.4) Interest Income/Expense ($0.0) ($0.1) $0.0 ($0.0) ($0.0) $0.0 $0.0 ($0.1) ($0.2) DD&A $7.6 $7.1 $7.4 $21.7 $6.3 $6.2 $6.0 $18.0 $7.4 Stock Option expense Special Items $1.7 $0.0 - $60.4 $0.4 $1.1 $3.1 $37.6 $14.3 Adjusted EBITDA $6.5 $6.8 $10.9 $15.5 $6.7 $6.9 $4.6 $4.7 $2.1 Revenue $43.6 $42.4 $50.2 $56.6 $37.1 $34.8 $28.9 $33.0 $19.9 EBITDA Margin 14.9% 16.1% 21.7% 27.4% 18.0% 19.7% 15.9% 14.2% 10.6% Offshore Services - Adjusted EBITDA Reconciliation '($ in Millions) Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (Loss) Before Taxes ($8.0) $1.8 $0.6 ($20.7) ($8.6) $2.1 $4.6 $1.8 ($7.7) Interest Income/Expense $0.0 $ DD&A $3.3 $3.3 $3.4 $16.9 $2.8 $2.9 $2.9 $2.9 $2.7 Stock Option expense Special Items $0.0 $2.1 - $3.9 $0.0 $0.0 $0.5 $0.8 - Adjusted EBITDA ($4.6) $7.3 $4.0 $0.1 ($5.8) $5.0 $8.0 $5.5 ($5.0) Revenue $35.3 $56.2 $61.5 $42.3 $11.8 $35.7 $37.9 $36.8 $10.2 EBITDA Margin -13.0% 12.9% 6.5% 0.2% -49.5% 14.0% 21.0% 15.0% -48.5% Adjusted Operating Costs $39.9 $49.0 $57.5 $42.2 $17.6 $30.7 $29.9 $31.3 $

42 Market Capitalization & Enterprise Value (thousands, except per share amounts) Market Capitalization: TTI Market price per share on 6/22/2016 $ 5.81 Shares outstanding as of 5/10/ ,442 Market Capitalization $ 467,368 Enterprise Value: TTI Market capitalization based on 6/22/2016 Stock Price $ 467,368 Total debt, excluding CSI Compressco LP debt, as of 12/31/ ,971 Enterprise Value $ 760,339 42

43 Non-GAAP Reconciliations Distributable Cash Flow $ in millions Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (loss) before taxes $ 3.7 $ 0.9 $ 3.9 $ 5.3 $ 0.6 $ (0.1) $ 3.4 $ 2.4 $ 1.5 $ 2.0 $ (152.6) $ (104.7) Depreciation and amortization Goodwill / long lived asset impairment Interest expense, net [1] Equity compensation Non-cash cost of compressors sold [2] Unusual items [3] Adjusted EBITDA $ 29.0 $ 26.7 $ 31.8 $ 31.4 $ 27.6 $ 40.5 $ 41.6 $ 32.1 $ 31.5 $ 32.4 $ 31.9 $ 25.4 Less: Pro Forma adjustments Adjusted EBITDA prior to acquisition $ 7.1 $ 9.6 $ 10.6 $ 9.3 $ 10.5 $ 25.5 $ 41.6 $ 32.1 $ 31.5 $ 32.4 $ 31.9 $ 25.4 Less: Current income tax expense / (benefit) (0.3) (1.3) Maintenance capital expenditures Interest expense, net Non-transaction related unusual items Plus: Amortization of financing costs Distributable cash flow $ 6.0 $ 8.4 $ 10.1 $ 8.5 $ 9.4 $ 19.0 $ 28.4 $ 21.4 $ 20.6 $ 21.8 $ 19.4 $ 14.2 Declared cash distributions attributable to the period $ 6.7 $ 6.8 $ 6.9 $ 7.1 $ 7.2 $ 15.6 $ 16.6 $ 17.1 $ 17.3 $ 17.4 $ 12.8 $ 12.8 Distributable cash flow coverage 0.89x 1.23x 1.46x 1.21x 1.30x 1.21x 1.71x 1.25x 1.19x 1.25x 1.52x 1.11x (1) Amortization of financing costs are included in interest expense due to SEC changes (2) Starting from Q1 2016, non-cash cost of compressors sold is included in adjusted EBITDA. Historical periods have been updated for this change. (3) Unusual items is primarily associated with non-recurring fees and expenses plus severance as well as one time costs associated with transactions 2016 CSI Compressco LP 43

44 Non-GAAP Reconciliations Adjusted EBITDA $ in millions Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Income (loss) before taxes $ 3.7 $ 0.9 $ 3.9 $ 5.3 $ 0.6 $ (0.1) $ 3.4 $ 2.4 $ 1.5 $ 2.0 $ (152.6) $ (104.7) Depreciation and amortization Goodwill / long lived asset impairment Interest expense, net [1] Equity compensation Non-cash cost of compressors sold [2] Unusual items [3] Adjusted EBITDA $ 29.0 $ 26.7 $ 31.8 $ 31.4 $ 27.6 $ 40.5 $ 41.6 $ 32.1 $ 31.5 $ 32.4 $ 31.9 $ 25.4 Revenue $ $ 90.6 $ $ $ $ $ $ $ $ $ 99.4 $ 81.7 Adj. EBITDA Margin 25.3% 29.4% 30.8% 25.6% 25.2% 30.4% 33.4% 31.2% 24.9% 25.2% 32.1% 31.1% (1) Amortization of financing costs are included in interest expense due to SEC changes (2) Starting from 1Q 20161, non-cash cost of compressors sold is included in adjusted EBITDA. Historical periods have been updated for this change. (3) Unusual items is primarily associated with non-recurring fees and expenses plus severance as well as one time costs associated with transactions 2016 CSI Compressco LP 44

45 Non-GAAP Reconciliations Liquidity & Leverage $ in millions Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Consolidated TTM EBITDA per Bank Agreement $ $ $ $ $ Senior notes Revolving credit facility outstanding Letters of credit and surety bonds Total debt per Bank Agreement Revolving credit facility, total Amounts currently outstanding (208.0) (233.0) (243.0) (235.0) (234.0) Bank letters of credit (1.1) (1.0) (0.8) (1.6) (2.1) Revolving credit facility, available Less: Adjustment for leverage capacity Plus: Cash excluding restricted cash Liquidity $ $ $ $ 99.1 $ 64.8 Leverage Covenant 5.50x 5.50x 5.25x 5.25x 5.25x Leverage Ratio 4.13x 4.25x 4.41x 4.56x 4.80x Market Capitalization Reconciliation $ and Units in thousands CCLP Unit Price as of 6/22/2016 $ 7.92 Units Oustanding as of 12/31/ ,186 Market Capitalization 262,833 Plus: Debt Outstanding as of 12/31/ ,481 Enterprise Value $ 843,314 Free Cash Flow $ in thousands CCLP Cash from operations $ 15,095 Capital expenditures, net of sales proceeds (1,353) Free Cash Flow $ 13,742 (1) Leverage ratio is Total Debt divided by Consolidated TTM EBITDA per Bank Agreement 2016 CSI Compressco LP 45

46 TETRA Technologies, Inc. CSI Compressco LP June 2016