Cowen and Company 5 th Annual Ultimate Energy Conference Jenniffer - PowerPoint PPT Presentation

Cowen and Company 5 th Annual Ultimate Energy Conference Jenniffer Deckard, President and Chief Executive Officer Mark Barrus, Interim Chief Financial Officer Sharon VanZeeland, Vice President, Investor Relations & Business Development December 2, 2015

Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains forward-looking statements. These statements can be identified by the use of forward-looking termino logy including “will,” “may,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” or other similar words. These statements discuss future expectations including company growth expectations, demand for our products, capacity expansion plans, market trends, commercial product launches and research and development plans and may contain projections of financial condition or of results of operations, or state other “forward - looking” informati on. These forward-looking statements involve risks and uncertainties. Many of these risks are beyond management’s control. When considering these forward-looking statements, you should keep in mind the risk factors, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other cautionary statements in the company’s SEC filings. Forward-looking statements are not guarantees of future performance or an assurance that our current assumptions or projections are valid. Our actual results and plans could differ materially from those expressed in any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information or future events, except as required by law. This presentation includes certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA and Adjusted EPS, and Adjusted Diluted EPS. These non-GAAP financial measures are used as supplemental financial measures by our management to evaluate our operating performance and compare the results of our operations from period to period without regard to the impact of our financing methods, capital structure or non-operating income and expenses. Adjusted EBITDA is also used by our lenders to evaluate our compliance with covenants. We believe that these measures are meaningful to our investors to enhance their understanding of our financial performance. These measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP and may differ from similarly titled measures used by other companies. For a reconciliation of such measures to the most directly comparable GAAP term, please see the slides 21-23 of this presentation. 2

Two Complementary Business Segments Industrial & Recreational End Markets Include:  Foundry Product Lines Include:  Glass High-Purity Silica Sand   Building Products Custom-Blended   Sports and Recreation Materials  Resin-Coated Sand  Specialty Products  Resin  Water Oil & Gas – Proppant Solutions Product Lines Include:  Northern White Frac Sand  Texas Gold Frac Sand (mined in Voca, TX)  Resin-Coated Frac Sand  Self-Suspending Proppant Technology, Propel SSP TM  Activators  Water-Soluble Ball Sealers (Bioballs) 3

Fairmount Santrol Positioned to Compete in All Market Cycles – A Leading Solutions Provider Differentiated in Every Area of the Value Chain COMMITMENT TO PEOPLE, PLANET & PROSPERITY  800 million tons of proven mineral reserves OPERATIONAL 11 (7 active) sand facilities with 12.3 million tons of annual stated capacity  SCALE  10 (6 active) coating facilities with 2.3 million tons of annual stated coating capacity Industry-leading integrated logistics network with 40 terminals serving the oil and  gas market DISTRIBUTION  Unit train capabilities: 6 destinations and 2 sand origin facilities  Broad innovative product suite including Northern White, Texas Gold and PRODUCT value-added coated products PORTFOLIO  Addresses over 95% of proppant market State-of-the-art R&D facilities  TECHNOLOGY AND  Phenolic resin manufacturing facility INNOVATION Proprietary product and process technologies, including Propel SSP TM  4

Industry’s Most Comprehensive Operations and Logistics Footprint Comprehensive Logistics Platform and Vertically Integrated Operations with Access to Every Major U.S. Oil & Gas Basin International Operations Manufacturing Footprint Mining & Processing (11) (7 active) Coating Operations (10) (6 active) Research & Development (2) Resin Manufacturing (1) Specialty Products (4) Administrative Offices (6) Logistics Network Oil & Gas Terminals (40) Industrial & Recreational Terminals (9) Unit Train Destination (6) Unit Train Origin (2) Basin Play 5

Broad Suite of Product Solutions Designed to Address Wide Range of Complexities Across All Well Environments SOLUTIONS FOR ALL CLOSURE PRESSURES (1) ADDITIONAL SOLUTIONS Eliminate Reduce Prevent Flowback Fines Embedment Hyperprop PowerProp OptiProp G2 THS Super DC Coolset Super LC TLC Northern White API Frac Sand Texas Gold API Frac Sand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Closure Pressure (000s psi) Raw Sand Resin-Coated Sand Resin-Coated Ceramic _____________________ 1. Pressure performance data are specific to 20/40 mesh. Recommended range for each product based on optimal crush, conductivity, and price tradeoffs. 6

2015-2016: Proppant Intensity Continues to Increase Proppant Driver Expectations: + 26% additional  Lower rig counts anticipated increase Proppant 4,300 Greater rig efficiencies offset by  Intensity +20-25% fewer hours per rig = Flat wells per rig… but when market 3,400 rebounds, expect increasing well count and proppant per rig as rig Proppant Per Stage 2,700 ~+10% utilization increases 2,300 Flat lateral length  Increased stages/foot (up ~10%)  Stages Per Foot ~+10%  Increased proppant/stage (up ~10%) = Proppant intensity up 20 to 25% Lateral Length Average Proppant Tons / US Horizontal Well 1Q 2014 4Q 2014 Rig Efficiencies Wells per Rig 4Q 2015 4Q 2016 Drilling Hours/Rig 7 ___________________________ Sources Include public E&P presentations, internal estimates and order flow analysis PacWest Consulting Partners 7 The Freedonia Group

Proppant Intensity Continues to Offset Rig Decline While FMSA Frac Sand Volumes Throughout 2015 Compare Favorably to Estimated Overall Frac Sand Market Q2 - Q4 2014 Q1 - Q3 2015 40 2,000 1,886 36.7 6,000 5,604 1,800 4,836 5,000 1,600 30 27.4 1,400 4,000 1,200 1,059 20 1,000 3,000 800 2,000 600 10 400 1,000 200 0 0 0 Average US Land FMSA Frac Sand Frac Sand Market Volumes Rig Count Volumes in in Millions of Tons Thousand of Tons ___________________________ Sources TPH PacWest Consulting Partners The Freedonia Group 8

During the Downcycle, E&Ps Making Tradeoffs Between Short-Term Costs and Mid-Term EURs and Well NPVs 23-well study proves proppant flowback prevention increases value by $115,000 per frac stage* in addition to delivering increased production as compared to raw frac sand 1,200 1,089 Q2 - Q4 2014 Q1 - Q3 2015 1,000 800 Resin coated proppant: Market and 576 600 FMSA volumes down proportionately more than frac sand 400 200 0 FMSA Resin Coated Proppant Volumes Recent Signals Indicate Returning Focus on EURs and Well NPVs As mega fracs enter second stage of flow production, E&Ps observing higher IPs but steep decline – curves – Resin-coated sand both increases IP and improves long term production (higher overall EUR) by keeping the proppant in place and reduces maintenance cost associated with proppant flowback Customers designing well completions with tail-in of resin coated proppant – 9 *Study was performed on vertical wells with single-stage fracs in August 2014

Near-Term Fairmount Santrol Focus: Actions to Manage Through the Market Challenges 1. Consolidating our operations into a more cost-effective footprint Enhance 2. Refining and optimizing our logistics network to the benefit of both Efficiency Fairmount Santrol and our customers Reduce 3. Reducing spending across all cost categories Spending 4. Investing in key areas of the business Invest in the • Wedron, IL facility expansion Future Successful trials of Propel SSP TM • 5. Working with lenders to provide flexibility and managing working capital Manage and capital expenditures Liquidity 10

1. Consolidating Our Operations into a More Cost-Effective Footprint  Idled higher-cost sand facilities and optimizing use of lower-cost facilities  Since December 2014, average production cost per ton reduced by: 14% across all frac sand grades, 35% for Northern White sand, and 25% for resin-coated products Proppant Solutions’ Effective Sand Capacity 12.0 10.1 9.8 10.0 Millions of Tons 8.0 Wedron 7.1 Wedron 6.0 Wedron 4.0 2.0 - January 2015 October 2015 1H 2016 11

2. Leveraging Our Terminal Network & Unit Train Capabilities to the Benefit of Both FMSA and Customers 51 unit trains shipped in Q3 26 unit trains shipped in October FMSA Terminal FMSA Active Proppant Solutions Mining & Processing Unit Train Destination Unit Train Origin 2 Unit Train 40 Lower Cost API Sand Destinations to Basin and Origins and 1 in Heart of Well Site for In-Basin API Completions FMSA and Sand Origin Activity Customers 12