barclays ceo energy-power conference presentation september …/media/files/s/solaris... ·...

Barclays CEO Energy-Power Conference PresentationSeptember 6, 2018

Disclaimer

1

Forward-Looking Statements

The information in this presentation includes “forward-looking statements.” All statements, other than statements of historical fact included in this presentation, regarding our management, strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Solaris’ current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” included in Solaris’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 6, 2018 and subsequent Quarterly Reports, including the From 10-1 filed with the Securities and Exchange Commission on August 1, 2018. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the transportation, storage and delivery of proppant. These risks include, but are not limited to, the level of domestic capital spending by the oil and natural gas industry natural or man-made disasters and other external events that may disrupt our manufacturing operations, volatility of oil and natural gas prices, changes in general economic and geopolitical conditions, large or multiple customer defaults including defaults resulting from actual or potential insolvencies, technological advancements in well service technologies, competitive conditions in our industry, our ability to fully protect our intellectual property rights and changes in the long-term supply of and demand for oil and natural gas. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this presentation. Except as otherwise required by applicable law, we disclaim any duty to update and do not intend to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation.

This presentation includes financial measures that are not presented in accordance with generally accepted accounting principles ("GAAP"), including EBITDA and Adjusted EBITDA. While management believes such measures are useful for investors, they do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial measures should not be used as a replacement for, and should not be considered in isolation from, financial measures that are in accordance with GAAP. Please see the Appendix for reconciliations of those measures to comparable GAAP measures.

Industry and Market Data

This presentation has been prepared by Solaris and includes market data and other statistical information from third-party sources, including independent industry publications, government publications or other published independent sources. Although Solaris believes these third-party sources are reliable as of their respective dates, Solaris has not independently verified the accuracy or completeness of this information. Some data are also based on the Solaris’s good faith estimates, which are derived from its review of internal sources as well as the third-party sources described above.

Trademarks and Logos

Solaris owns or has rights to various trademarks, service marks and trade names that is uses in connection with the operation of its business. This presentation also contains trademarks, service marks and trade names of third parties, which are the property of their respective owners. Solaris’ use or display of third parties’ trademarks, service marks, trade names or products in this presentation is not intended to and does not imply, a relationship with Solaris or an endorsement or sponsorship by or of Solaris. Solely for convenience, the trademarks, service marks and trade names referred to in this presentation may appear without the ©, TM or SM symbols, but the omission of such references is not intended to indicate, in any way, that Solaris will not assert, to the fullest extent under applicable law, its rights or the right of the applicable owner of these trademarks, service marks and trade names.

$2 $7

$40

$1 26

2015 2016 2017 2018E

Management1 7%

Yorktown23%

Other6%

Float 54%

2

Ticker SOI (NYSE)

IPO Date May 11, 2017

Market Cap ~$800 million

Long-term Debt $0.0 million

2019 Consensus EV/EBITDA Multiple(2) 4.3x

2019 Consensus FCF Yield(2) 11%

Company Snapshot

(1) As of August 30, 2018(2) 2018E reflects Consensus FACTSET estimates

Ownership (1) EBITDA Growth (2)

in $ millions

Fleet of 138 Mobile Proppant Management Systems that address challenges related to the transportation, storage and delivery of proppant

Manufacturing capacity of up to 8 systems per month

Manufacture and rent Systems directly to leading E&P operators and pressure pumpers

>95% of fleet deployed to customers with multiple Systems

Blue-chip, diverse customer mix, including leading E&P companies and pressure pumpers

Digitalizing the Supply Chain

Leading Independent Provider of Well Site Logistics Solutions

3

Kingfisher Transload Facility High-capacity, unit train capable transload facility in

Kingfisher, Oklahoma supporting STACK/SCOOP

Underpinned with seven-year contract with leading STACK E&P operator

Drive supply chain efficiencies through real time, remote monitoring of proppant inventory across supply chain:

PropView® and Railtronix™

Leading Well Site Storage and Delivery Systems

Solaris’ Has the Culture and Team to Constantly Improve Product and Service Offering

Jul-2015First 12-pack

Deployed Dec-2017Railtronix

Acquisition

Mar-2015Redesigned Control

System Using Allen-Bradley

Oct-2015PropViewTM

Beta Deployed

May-2017IPO on NYSE

May-2015First Central

Conveyer Belt Built

May-2018Reconciling

Solution Deployed

Sep-2014Acquisition of Manufacturing Facility and IP

April-2014License

Agreement with Loadcraft

Feb-2016System Tarping

Deployed

Apr-2016Dual

Discharge Deployed

Sep-2016PropViewTMMobile App Deployed

Q4-2016Repurchased

and Upgraded

sold Systems

Q1-2017Urethane Fill

Pipe Extension Deployed

Aug-2017Kingfisher

Ground Breaking

Jan-2018Non-

pneumatic Deployed

4

Solaris Has A Culture And History Of Innovation

Number of Systems in Fleet

Key Events

WTI Price

Chart1

2Q142Q14

3Q143Q14

4Q144Q14

1Q151Q15

2Q152Q15

3Q153Q15

4Q154Q15

1Q161Q16

2Q162Q16

3Q163Q16

4Q164Q16

1Q171Q17

2Q172Q17

3Q173Q17

4Q174Q17

1Q181Q18

2Q182Q18

TodayToday

3

103.1034065934

4

97.2333695652

5

73.0445652174

8

48.7293333333

15

57.723956044

19

46.69

21

42.0125

23

33.550989011

23

45.4602197802

24

44.952826087

29

49.0910869565

35

51.7958888889

44

48.2776923077

59

48.0770652174

77

55.4377173913

98

62.9677777778

122

67.9659340659

138

69.613030303

Monthly System Count

Apr-14May-14Jun-14Jul-14Aug-14Sep-14Oct-14Nov-14Dec-14January-15February-15March-15April-15May-15June-15July-15August-15September-15October-15November-15December-15January-16February-16March-16April-16May-16June-16July-16August-16September-16October-16November-16December-16January-17February-17March-17April-17May-17June-17July-17August-17September-17October-17November-17December-17January-18February-18March-18April-18May-18June-18July-18August-18September-18October-18November-18December-18

Apr-14May-14Jun-14Jul-14Aug-14Sep-14Oct-14Nov-14Dec-14Jan-15Feb-15Mar-15Apr-15May-15Jun-15Jul-15Aug-15Sep-15Oct-15Nov-15Dec-15Jan-16Feb-16Mar-16Apr-16May-16Jun-16Jul-16Aug-16Sep-16Oct-16Nov-16Dec-16Jan-17Feb-17Mar-17Apr-17May-17Jun-17Jul-17Aug-17Sep-17Oct-17Nov-17Dec-17Jan-18Feb-18Mar-18Apr-18May-18Jun-18Jul-18Aug-18Sep-18Oct-18Nov-18Dec-18

2Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q18

2334445556789111416181920212122222323232324242426272931323335384044485259667177839098106114122136138146154161

136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136136

Monthly System Count

Quarterly Sytem Count

2Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q18Today

3458151921232324293544597798122138

$103.10$97.23$73.04$48.73$57.72$46.69$42.01$33.55$45.46$44.95$49.09$51.80$48.28$48.08$55.44$62.97$67.97$69.61

136136136136136136136136136136136136136136136136136136

Quarterly Sytem Count

EBITDA Growth

#'s thousands2015201620172018E

Adjusted EBITDA1.76.839.9

EBITDA Growth

[]

Ownership

Class AClass BTotal% of Total

Management1,700,0006,535,9008,235,90017.6%

Yorktown-10,954,23410,954,23423.4%

Other B-2,669,2552,669,2555.7%

Float24,900,370-24,900,37053.3%

Total26,600,37020,159,38946,759,759100.0%

Ownership

Solaris Active Across Lower-48

5

DELAWARE

EAGLE FORD

SCOOP/STACK

HAYNESVILLE

ROCKIES

BARNETT

MARCELLUS / UTICA

Systems at IPO (May 11, 2017) Systems as of August 30, 2018

40

935

99

1

18

9

1

2

3

10

0

Solaris Currently has 138 Systems Operating Across Eight Basins

MIDLAND

2213

2725

Chart1

Systems at IPO (May 11, 2017)

Systems as of 5/15/2018)

Eagle Ford

9

28

Data

Eagle Ford

Systems at IPO (May 11, 2017)9

Systems as of 5/15/2018)28

Chart1



Rockies

0

3

Data

Rockies



Chart1



Eagle Ford

2

6

Data

Eagle Ford



Chart1



Rockies

0

1

Data

Rockies



Chart1



Eagle Ford

3

16

Data

Eagle Ford



Chart1



Eagle Ford

1

7

Data

Eagle Ford



Chart1



Permian

22

60

Data

Permian



Chart1

Data

Permian



Chart1



Permian

22

60

Data

Permian



Select Operator Customers Select Pressure Pumping Customers

Solaris has a broad and growing customer mix

Diverse, Blue Chip Operator and Pressure Pumper Customer Base

6

Dec-14 Dec-15 Dec-16 Dec-17 Current

Traditional SandKing

Other New Technologies

SOI

7

Growth Driven by Overall Market Growth Combined with Technology Displacement

Well Site Sand Storage Systems by Technology Type (1)

519

314

253

399

~450

30%

25%

45%

Source: Company data, Coras Research(1) Reflects estimated marketed US Frac fleet count to approximate number of well site sand storage systems

Traditional SandKingtechnology has lost share to boxes and silos, with Solaris’ systems having the fastest market adoption rate

Increasing Sand Intensity Levels Are Pervasive

MM TonsMM Lbs

0

5

10

15

20

25

30

0

2

4

6

8

10

12

14

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

Total Proppant Demand (MM tons)

Proppant per Well (MM lbs)

Supply chain buffer

Greater storage and proppant accessibility

More accessible unloading points

Enclosed system with fewer moving parts and dust suppression

Efficient use of space

Fully automated

Real-time data

Inadequate on-site inventory and offloading capacity

Complicated operations and expansive well site footprint

Opaque inventory information and limited communication

HS&E issues, including silica dust

Bringing Order to Chaos: Solaris Versus Traditional Technology

8

Solaris’ Mobile Proppant Management System

Issues with Traditional Offerings

Our Solution

Traditional Sand Kings

Rolling Storage

Solaris’ Solution

Simple, modern, fully-integrated control system

High volume input and output capacity

Mobile and flexible equipment

High Capacity Throughput

Elegant Solution to a Complicated Problem

9

Supply Chain Savings

Increased on-site inventory / access to inventory

Increased truck offloading points

Smaller truck fleet size required to deliver proppant

Decreased truck demurrage

Well Site Savings

Increased inventory stage execution efficiency

Built-in dust control

Lower labor requirements

Reduced fuel requirements

Proppant inventory loss savings

Increased asset utilizationReal-time inventory levels and consumption rates

Seamless Rig-Up and Integration Simultaneous Belly Dump and Pneumatic Loading

Belly Dump Truck

Pneumatic Truck

Illustrative 20 MM lb Completion

Proppant Logistics are Bottleneck Prone; In Basin Sand Increases Need for Wellsite Inventory Buffer

10

RAIL TO BASIN

TRANSLOAD STORAGE FACILITY

DELIVERY TO THE WELLSITE

WELLSITE STORAGE AND DELIVERY

SAND MINE

~10,000 tons of sand

~100 railcars

~10,000 tons of throughput

~400 truck loads

~2.5 million lbs / 6 silos; or

~5.0 million lbs / 12 silos

Solaris Provides Key Buffers and Data Along Supply Chain

andPropView ®

PropView ®

Proppant FlowSolaris Data

Solution

NO

RT

HE

RN

WH

ITE

SA

ND

SU

PP

LY

CH

AIN

Illustrative 20 MM lb Completion

DELIVERY TO THE WELLSITE

WELLSITE STORAGE AND DELIVERY

SAND MINE

~10,000 tons of sand

~400 truck loads

~2.5 million lbs / 6 silos; or

~5.0 million lbs / 12 silos

Proppant Flow

IN B

AS

IN /

RE

GIO

NA

L S

AN

D S

UP

PL

Y C

HA

IN

Lost buffer of inventory along the supply chain

Trucking / Demurrage

Savings 25%

Daily Completion

Cost Savings40%

Dust Control System Savings

15%

Labor Savings

10%

Inventory Loss Savings 5%

Fuel Savings 5% Lighting / Power Savings

1%

Value Proposition to Customers:Trusted Solution and Low Cost Insurance Policy

11

Note: Analysis based on Management estimates; assumes 3-well Delaware Basin pad, 10,000 tons of proppant/well, 40 stages/well and ~500,000 pounds of proppant/stage(1) Implied average monthly rental and service revenue per system in Q2 2018

Metric $ Amount / Figure

Average Horizontal Well Cost $6,000,000

Solaris Monthly Rental and Service Cost (1) $139,000

Average Number of Wells Completed per Month 3

Implied Solaris Cost per Well $46,333

Solaris System Costs

Our Patented Design

12

Silo

Shuttle Conveyor Belt

GravityDual Conveyor Belts

BlenderShuttle Conveyor Belt

Generator

Base unit

GeneratorAerial View of SystemSilo Loading and Delivery Process

Silos

Electrically driven belts

Single point of control for the entire system

Six to twelve silos per System

Four fill tubes per silo

2.5 to 5 million lbs of inventory available at the blender

~50,000 pounds of proppant per truckload

Two issued patents; two utility patent applications and one provisional patent application relating to Systems, services and other technologies

Digitalization of the Supply ChainPropView®: Real-Time, Remotely Available Inventory Data

13

PropView® provides real-time inventory levels, both at the well site and remotely via any browser or Solaris’ App.

Digitalization of the Supply ChainPropView® + Railtronix™: Real-Time Inventory Data

14

The Railtronix™ / PropView® integration provides real-time visibility of proppant from source mine to well head

Kingfisher Facility Fully Operational

15

Proximity to Operators’ Acreage Will Reduce Supply Chain Costs

New High-Capacity Transload Facility Long-Term Contract with Leading STACK E&P Operator

The only independent, high-speed, unit-train capable transload facility dedicated to the STACK/SCOOP

300 acres directly on the Union Pacific Railroad

Within 50 miles of 67 active horizontal rigs (1)

Began transloading service in January 2018

Completed phase one construction in July 2018

Seven-year agreement

Minimum quarterly proppant volume commitment provides run-rate annual revenue of $13 million

Rail-to-truck operations commenced January 2018; dedicated unit train loop and 30,000 tons of silo storage commencing August 2018

Customer is a multi-basin Solaris Mobile Proppant Management System customer

Source: 1Derrick.

100 mile radius

50 mile radius

Central to Current STACK / SCOOP Rig Activity

Source: Baker Hughes North America Rotary Rig Count.(1) Source: IHS Enerdeq, as of March 6, 2018.

100 mile radius

50 mile radius

Legend

Horizontal Oil Rig

Kingfisher Facility Phase One Construction Completed

16

300 Acres Central to the STACK/SCOOP Plays

Rail-to-truck Service

30,000 Tons of Storage Unit Train Loop

Manifest Loop

17

Bringing Order to Chaos…AgainSolaris’ New Mobile Chemical Silo Systems

Chemicals, acid, friction reducer, biocide, etc. stored in multiple totes and iso-containers today

Replaced with 3 silos with inventory control and monitoring, precise flow measurement and improved HS&E

Footprint will be reduced to three Solaris silos

18

Continued Growth in Solaris’ Financial Performance…

Quarterly Adjusted EBITDA and Margin ($ in Millions)

Quarterly Revenue and Revenue Days ($ in Millions)

Capex ($ in Millions)

Q2 2018 Performance Commentary

61% 60%Margin: 61%

9,8504,564Revenue

Days:6,146

2Q 2018 revenue and Adjusted EBITDA grew 31% and 37%, respectively, versus 1Q 2018

Growth in revenue and Adjusted EBITDA are primarily attributable to an increase in revenue days

− 2Q 18 revenue days grew to 9,850, a 28% sequential increase

− Average rental rates flat versus Q1 2018

Added 24 systems to the fleet in 2Q 2018

− Ended quarter with 122 systems in fleet

Ending Fleet Size:

7,673

64% 12259 77 98

$27.6

$49.9

$41.2 $44.9

3Q 17 4Q 17 1Q 18 2Q 18

$11.2

$15.2

$21.9

$30.0

3Q 17 4Q 17 1Q 18 2Q 18

$18.5

$25.2

$36.0

$47 .2

3Q 17 4Q 17 1Q 18 2Q 18

Chart1

Sheet1

CategoryColumn1Capex

1Q 17$7.61Q 16$2.3

2Q 17$13.92Q 16$1.2

3Q 17$27.63Q 16$2.7

4Q 17$49.94Q 16$5.3

1Q 17$7.5

Wilkey, Patrick L. (VLTA 1):Low rangeS-1 (p 6)

…Driven by Sustained Margins Over Cycles and Secular Growth

19

(1) 1H 2018 revenue days, gross margin and Adjusted EBITDA margin annualized.

(1)

58%

65%

7 5%

7 0%

1 2%

37 %

59%62%

2,579

5,745

1 6,712

35,046

-

9,000

18,000

27,000

36,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 Annualized 1H 2018

Rev

enue

Day

s

Syst

em R

enta

l and

Ser

vice

Gro

ss M

argi

n /

Adj

uste

d E

BIT

DA

Mar

gin

%

System Rental and Service Margin % Adjusted EBITDA Margin Revenue Days

20

Drivers of Solaris Growth in 2018 and Beyond

Leading well site storage and inventory management solution and continuing to grow, e.g., manufacturing up to 8 systems per month

Kingfisher Phase One completed July 2018. Opportunities to drive additional volumes through facility

Continued integration and expansion of inventory management data solutions –expansion of Railtronix and PropView offerings

R&D efforts to improve supply chain management and well site handling of other well site consumables, including chemicals, friction reducers, etc.

Free cash flow generation in 2019…return to shareholders, fund continued growth and M&A activity

Appendix

22

EBITDA and Adjusted EBITDA Reconciliation

(1) Income taxes include add back for federal and state taxes, including $22,637 in the three months and twelve months ended December 31, 2017 related to the Tax Cuts and Jobs Act.(2) Stock-based compensation expense related to restricted stock awards with one-year vesting that were granted to certain employees and consultants in connection with the Offering. (3) Represents stock-based compensation expense related to restricted stock awards with three-year vesting and options issued under the Plan.(4) Certain performance-based cash awards paid in connection with the purchase of Railtronix upon the achievement of certain financial milestones.(5) Certain non-recurring organization costs in 2017 associated with our IPO.(6) Other income related to the change in payables related to parties pursuant to the tax receivable agreement includes ($21,936) related to the Tax Cuts and Jobs Act.(7) Represents salaries and related expenses, professional fees, transactional costs, rent and travel expenses incurred in the development of sand mining and terminal assets, which expenses did not recur

in 2016.(8) Represents reserve for deposits made to a supplier, the majority of which was recovered.(9) Non-recurring transaction costs.

Three months ended, Y ear ended($ in 000s) June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 December 31, 2017 December 31, 2016 December 31, 2015

N et i ncome (l oss) $21 ,448 $1 3,41 5 $9,244 $7 ,406 $22,487 $2,803 $(1 ,37 3)

Depr eciation and amor tization 3,984 3,202 2,359 1 ,7 42 6,635 3,7 92 2,395

Inter est expense, net 7 1 84 26 27 97 23 22

Income taxes (1) 3,27 7 2,027 24,7 62 61 7 25,899 43 67

EBITDA $28,780 $18,728 $36,391 $9,792 $55,118 $6,661 $1,111

IPO bonuses (2) 307 588 581 61 7 4,627 - -

Stock -based compensation expense (3) 939 925 1 ,039 7 95 2,21 1 1 27 64

N on-r ecurring cash bonuses (4) - 1 ,67 9 - - - - -

Loss on di sposal of assets 23 3 47 41 498 - -

N on-r ecurring organizational costs (5) - - - - 348 - -

Change i n payables r elated to parties pur suant to tax r eceivable agreement (6) - - (22,939) (83) (23,022) - --

Sand mi ni ng and terminal business dev el opment costs (7) - - - - - - 446

N on-r ecurring supplier settlement (8) - - - - - - 38

Other (9) - - 1 07 36 1 43 - -

Adjusted EBITDA $30,049 $21,923 $15,226 $11,198 $39,923 $6,788 $1,659

EBITDA and Adjusted EBITDA Margins:

EBITDA $28,7 80 $1 8,7 28 $36,391 $9,7 92 $55,1 1 8 $6,661 $1 ,1 1 1

÷ Rev enue 47 ,1 55 36,01 8 25,204 1 8,47 8 67 ,395 1 8,1 57 1 4,205

EBITDA Margin 61% 52% 144% 53% 82% 37% 8%

Adjusted EBITDA $30,049 $21 ,923 $1 5,226 $1 1 ,1 98 $39,923 $6,7 88 $1 ,659

÷ Rev enue 47 ,1 55 36,01 8 25,204 1 8,47 8 67 ,395 1 8,1 57 1 4,205

Adjusted EBITDA Margin 64% 61% 60% 61% 59% 37% 12%

23

System Rental and Service Gross Margin Reconciliation

Six months ended Year ended($ in 000s) June 30, 2018 December 31, 2017 December 31, 2016 December 31, 2015

System rental and service Revenue:

Proppant management system rental $62,532 $54,653 $14,594 $8,296

Proppant management system services 17,446 12,537 3,563 3,167

Total system rental and service revenue $79,978 $67,190 $18,157 $11,463

System rental and services operating costs:

Cost of proppant system rental 3,101 2,627 1,431 994

Cost of proppant system services 20,785 14,184 4,916 3,847

Total cost of system rental and services $23,886 $16,811 $6,347 $4,841

System rental and service gross margin $56,092 $50,379 $11,810 $6,622

System rental and service gross margin $56,092 $50,379 $11,810 $6,622

÷ System rental and service revenue 79,978 67,190 18,157 11,463

System rental and service gross margin % 70% 75% 65% 58%

24

Margins Driven By System Design and Protected by High Switching Cost

Low Personnel Requirement

Margin Structure is Sustainable

Solaris rents proprietary Systems, but we do not operate the Systems

TRAIN, MAINTAIN, MOBILIZE

Risk of Switching is Material

Risk includes running out of sand or malfunctioning equipment – causes delayed completions

E&P companies: risk of higher well costs and delayed revenue

Pressure pumpers: risk of fewer stages pumper per day

Low Maintenance Spend

Solaris’ equipment is not under pressure and has minimal moving parts

Virtually 100% uptime with maintenance performed in the field

Economies of Scale

Solaris is the leading provider of next generation proppant well site storage and inventory management solutions (~30% market share today)

Growing fleet at up to 8 systems / month

Internal manufacturing model drives low manufacturing costs and ability to iterate on design modifications easily

High Switching Costs Relative to Savings from Potential Cheaper Solutions

More Than Just a Silo

Customers rely on Solaris inventory data to manage entire supply chain

Alternative storage solutions not plug and play or comprehensive supply chain solution

Solaris System Containerized System

Maximum Storage on Location 2.5 Million Pounds 1.68 Million Pounds

Implied Proppant Storage per Square Foot 1,040 Pounds ~300 Pounds

Well Site Equipment 6 Silos, 2 Base Units, 1 Conveyor 40 Boxes, Rig Mats, 1 Conveyor, Min. 1 Forklift

Personnel Required to Operate Equipment 1 3 – 4

Proppant Offloading Method 24 Fill Tubes 1 Forklift

Truckloads Required to Complete a 25 Million Pound Well 520 ~595

Onsite Non-Truck Equipment Movements 0 ~2,380 Forklift Movements

Frequency of Non-Truck Equipment Movements During Fracing Operations N/A Box Move Every 2.5 Minutes

HS&E Benefits Fewer People, Less Moving Parts, Dust Reduction Dust Reduction

25

Containerized System on LocationSolaris System on “Postage Stamp” Size Location

Solaris System Versus Containerized Solutions

Slide Number 1DisclaimerSlide Number 3Leading Independent Provider of Well Site Logistics SolutionsSlide Number 5Solaris Active Across Lower-48Diverse, Blue Chip Operator and Pressure Pumper Customer BaseSlide Number 8Bringing Order to Chaos: �Solaris Versus Traditional Technology�Elegant Solution to a Complicated ProblemProppant Logistics are Bottleneck Prone; In Basin Sand Increases Need for Wellsite Inventory BufferValue Proposition to Customers:�Trusted Solution and Low Cost Insurance PolicyOur Patented DesignDigitalization of the Supply Chain�PropView®: Real-Time, Remotely Available Inventory DataDigitalization of the Supply Chain�PropView® + Railtronix™: Real-Time Inventory DataKingfisher Facility Fully OperationalKingfisher Facility Phase One Construction CompletedBringing Order to Chaos…Again�Solaris’ New Mobile Chemical Silo SystemsContinued Growth in Solaris’ Financial Performance……Driven by Sustained Margins Over Cycles and Secular GrowthDrivers of Solaris Growth in 2018 and BeyondAppendixEBITDA and Adjusted EBITDA ReconciliationSlide Number 24Margins Driven By System Design and Protected by High Switching CostSolaris System Versus Containerized Solutions

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