Investor PresentationProducing Tomorrow’s Energy M a r c h 2 0 1 9
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Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on Vertex Energy’s future results. The forward-
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Industry Information
Information regarding market and industry statistics contained in this presentation is based on information available to us that we believe is
accurate. It is generally based on publications that are not produced for investment or economic analysis.
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Vertex Energy, Inc. (VTNR) is a refining company that produces FUEL for ships and HIGH-PURITY LUBRICANTS for automobiles while saving the earth in the process.
Company Overview
Key Logistics include aggregation and transportation of refinery
feedstocks such as light crude, used motor oil, petroleum and
chemical co-products, and downstream product-distribution
systems.
Produce and commercialize a broad range of high-purity
intermediate and finished products, such as fuel oils, marine-
grade distillates and high-purity base oils used for lubrication.
Reputation for producing high purity Group II+ base oils and
having built a solid platform for distribution, marketing, sales and
technical support of its imported Group III base oils.
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Additional Facility: Myrtle Grove is located on a 41 acre industrial
complex along the Gulf Coast in Belle Chasse, LA, with existing
hydroprocessing, plant infrastructure assets, and 214,000 barrels
of storage.
Three operating divisions: Black Oil; Refining & Marketing; and
Trading & Recovery.
Integrated Specialty Refining Company
Addressable Markets
▪ Third-party aggregation
network of ~50 supply
points across the U.S.
▪ 2 Third-party terminals
for aggregation of UMO
located in Houston, TX,
and Mobile, AL.
▪ Growing street-level
UMO collection
expertise at 30 million+
gallons.
▪ 60 trucks operating as
collectors across
15 states.
▪ Higher-margin internal
collection strategy.
Refining Self Supplied Feedstock
▪ Nationwide processing
capacity of over
2.7 million barrels.
▪ Developed and
patented unique UMO
processing technology.
Feedstock Aggregation
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▪ Low sulfur marine fuels
for sea going vessels.
▪ High purity base oils for
lubrication.
▪ Specialty blendstocks
for asphalt, gasoline,
pygas and utility fuels.
Addressable Market: Marine Fuels - IMO 2020
5
▪ On January 1, 2020, IMO requires the lowering of sulfur content in Bunker Fuel from 3.5% to .5%
▪ IMO 2020 is a regulation to address the environmental risks posed by the high level of sulfur and nitrogen emitted by ships
▪ Total diesel demand is anticipated to grow by 1.2 – 1.3 million barrels per day.
▪ Depressed High Sulfur Fuel Oil values will cause the value of UMO to follow
▪ UMO feedstock values would likely move the street collection industry back to a No Pay/Charge-For-Oil model
▪ Merchant spreads to improve for Vertex
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Used Motor Oil Refining Advantage
▪ Less feedstock cost relative to crude oil purchase-price▪ Re-refining is a route to conserve and fully realize the valuable chemistry inherent to base oils▪ The quality of the base oil through re-refining improves as a direct result of the feedstock cycle and the process technology
deployed▪ Refineries processing crude oil have alternative product markets with higher value economics in comparison to the yield loss from
producing Group III base stock
Base Oil production from used motor oil (UMO) is more efficient than from crude oil.
Gallon of Crude Oil
Heavy Fuel 4%
Light Fuel 5%
Water 5%
VGO/
Lube Distillate 73%
Asphalt Flux 13%
Gallon of UMO(1)
VERTEXHydroprocessing
Technology
Fuels and Co-
products
Group II+/III Base
Oils
Lubricants 1.1%
(1) Percentage breakdowns are illustrative
Source: Chemical Engineering Partners
Addressable Market: High Purity Base Oil
U.S. Group III Oil Market Key Considerations
▪ Group III base oils will become the primary base stock for high
quality lubricants needed for high performance engines to
meet corporate average fuel economy (CAFÉ) and lower
emissions standards
▪ Group III base oil market is projected to increase at an annual
rate of 10% in the U.S. for the next ten+ years. The same
trend is eventually expected world-wide
▪ Demand is expected to grow by around 50% over the next five
years with very limited Group III production capacity in the U.S.
(most of which is intended for internal consumption by the
producer)
▪ High purity Base Oil production from used motor oil is more
efficient than from crude oil. Also, the quality of the base oil
through re-refining improves as a direct result of the feedstock
cycle and the process technology
• Group III base oil demand projected to increase exponentially in the U.S. market within the next decade
• Heartland Facility, located on Columbus, Ohio, with a refining capacity of 20 million gallons
• Myrtle Grove, located in Belle Chasse, Louisiana, with a potential 50 million gallon increase in capacity
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Refinery Operation Drivers - Volumes
Cost-effective strategy for building the Company’s
feedstock supply chain by establishing a successful self-
collection and aggregation infrastructure.
Regional model that can be replicated across the U.S.A. to
manage logistics and reduce costs
Marketing, Sales, and distribution platform for Company’s
refined products
Exclusive agreement with Penthol C.V. to market, transport,
and sell imported Group III base oil in the United States
'-
7,500
15,000
22,500
30,000
37,500
2014 2015 2016 2017 2018 2019 Target
Collection Volume
CAGR: 23%
Strategically located Refining assets geared towards
specific addressable markets creating earnings leverage
Self Supplied Feedstock Growth (in thousands)
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Refining Facilities
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Heartland (Ohio)
Location: Columbus, Ohio
Annual Capacity: 476 thousand barrels (1500bpd)
Collection Volume: 10 million gallons
Finished Product: Group II+ Base Oil
Each self-collected gallon of UMO is estimated to
provide a margin or $0.25 - $0.30 per gallon over a
gallon purchased from a third-party
Collection clustered around a re-refinery significantly
reduces transportation costs from longer distance
suppliers
Marrero (Louisiana)
Location: Marrero, Louisiana
Annual Capacity: 1.6 million barrels (4800bpd)
Finished Product: Vacuum Gas Oil (VGO)
Strategic Benefit:
▪ Diversification of product mix
▪ New ECA-fuel/marine market capabilities
▪ Strategic logistical supply location near
Mississippi River and US Gulf markets
Location: Baytown, Texas
Annual Capacity: 833 thousand barrels (2500bpd)
▪ Waterfront facility with 20 acres positioned adjacent
to the Houston ship channel
▪ Provides supply and distribution advantages into
one of the largest petro-chemical markets
▪ ~100,000 bbls of storage on site that includes
finished product tanks, feed tanks, and other tanks
▪ Possess EPA transfer facility and USGC marine
facility permits
TCEP facility (Baytown)
Other Facilities
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Location: Myrtle Grove, Louisiana
▪ Situated on 41 acres of land along Gulf Coast inBelle Chasse, LA
▪ Located just 26 miles South of New Orleans—
accessible by the Mississippi River and servicedby rail
▪ Adjacent to ConocoPhillips Alliance refinery
▪ Nearby access to I-10
Myrtle GroveKMTEX (Port Arthur)
Location: Port Arthur, Texas
Finished Product: Gasoline blendstock, pygas,
cutterstock
Strategic Benefit:
▪ Tolling agreement for strategically located
re-refining capacity
Port Arthur
Location: Port Arthur, TX
Operates under tolling agreement
National Footprint – Regional Focus
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Operating & Manufacturing Refineries
Facility to be developed
Vertex maintains a national footprint with the
capabilities to collect/aggregate feedstock
across the country and from major
transportation hubs.
National FootprintVertex now operates regional hubs in highly strategic
locations, which will optimize transportation costs.
Regional Model
TCEP Facility
Location: Baytown, TX
Capacity: 35 million gallons
Heartland Facility
Location: Columbus, OH
Capacity: 20 million gallons
Myrtle Grove
Location: Belle Chasse, LA
Currently unutilized refining asset
Marrero Facility
Location: Marrero, LA
Capacity: 67 million gallons
Vertex operates as a national player (~23% of total UMO refining capacity in North America) while maintaining effective logistical expertise and cost-
effectiveness of a regional refiner.
Swap Agreement
Regional Swap Agreement
with CLH
Terminal – Aggregation facility
Earnings Growth FocusSet-up for Success
▪ Focus on increasing our collection operations through both organic growth and strategic acquisitions, volume increased 17% during the
LTM ended 12/31/18 vs. LTM ended 12/31/17. On track to collect over 34 million gallons at the end of 2019.
▪ Leverage the high-purity base-oil markets through previous Heartland facility capital improvements and technological upgrades, and
future investments at the Myrtle Grove site.
▪ Focus on Low Sulfur Marine Fuels. Expand into additional refining capacity to include low sulfur crude oil. Started commercial trials at the
CMT/TCEP facility to produce a fuel oil blendstock that would meet the new IMO’s 2020 marine bunker fuel regulations; completed barge
trial in Q1 2018.
Premium Base Oil Production
▪ Specialty refiner of high purity Group II+ base oils.
▪ Major importer of Group III base oil for commercial use in the United States.
Advantageous Market Dynamics
▪ Strategic assets located in the gulf to capitalize on the new 2020 IMO fuel requirements for marine fuels to contain 0.5% or less Sulphur
in ECA zone of <200 miles from coastline.
▪ Majority of Group III supplied to U.S. are imported from the Middle East and Asia representing an $0.25/gal transportation disadvantage.
Group III base oil demand expected to increase in US by 50% over next 5 years due to full synthetic lubricant requirements for most new
automobiles.
Myrtle Grove Site – Belle Chasse, Louisiana
▪ Industrial complex with existing processing plant infrastructure. Large storage volume capacity.
▪ Access to Mississippi River with sea-going barges, rail access and truck access nearby I-10.
▪ Myrtle Grove will produce high purity group III base oil and marine fuels, as well as utilizing site for bulk storage and finished product
blending.
We are working on our finished products strategy with multiple R&D projects underway.
Raise private capital to invest and fully monetize the development of our Myrtle Grove, CMT/TCEP, and Heartland facilities.
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VERTEX DIVISIONS
▪ Addressable Markets High purity Base Oils for Lubrication in North America
Low Sulfur marine fuels for ocean going vessels in US Gulf Coast
▪ Specialty Refining – Process used motor oil in-house using proprietary technologies: Marine Fuels – produced 48.3 million gallons last 12 months
Group II+ base oil – produced 13.8 million gallons last 12 months
TCEP technology – did not produce finished product during last 12 months
▪ Feedstock Aggregation – Purchase third-party feedstock from a network of
approximately 50 supply points across the U.S.
~50.1 million gallons aggregated over the last 12 months
▪ Self Collections – Own and operate a fleet of vehicles which collects used motor oil
from a network of approximately 8,000 generators. 30.6 million gallons collected during the last 12 months
Black Oil
2018 Revenue: $143.8MM (79.6% of Total)
2018 Gross Profit: $27.3MM (18.9% Margin)
Black Oil
The Black Oil Division refines used motor oil as an alternative feedstock to produce high purity base oils and marine fuels.
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Refining & Marketing
2018 Revenue: $22.9 MM (12.7% of Total)
2018 Gross Profit: $.64MM (2.8% Margin)
Refining & Marketing
The Refining & Marketing Division refines clean-crudes to marine fuels, and petroleum co-products to chemical feedstock
and specialty blend components .
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▪ Source feedstock from commercial sources, including crude suppliers,
products pipeline operators, petroleum terminals, refineries, chemical
processing facilities, and third-party providers
▪ Development of crude refining assets for Marine Fuels
▪ Co-product processing completed with KMTEX, a third-party refinery.
▪ Co-product Refining Produces Various End Products:
Gasoline Blendstock – raw gasoline sold to blenders
Pygas – Feedstock used by chemical companies
Fuel Oil Blendstocks – used in blending industrial fuel for
power generation
▪ These services are currently provided in 15 states, primarily in
the Gulf Coast and Midwest.
▪ In the last 12 months**, this division aggregated approximately
25,000 gross tons of steel and 680,000 barrels of petroleum
products.
▪ North America Group III Base oil sales and distributions.
Vertex Trading & Recovery
2018 Revenue: $13.9MM (7.7% of Total)
2018 Gross Profit: $1.4MM (10.3% Margin)
Recovery
The Recovery Division provides recovery, trading, and marketing services for hydrocarbon and metal commodities.
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**Last 12 Months ended 12/31/2018
FINANCIALS
$8.9
$1.3
($17.3)
$5.7
($0.1)
$8.0
-$23
-$18
-$14
-$9
-$5
$0
$5
$9
$14
2013 2014 2015 2016 2017 2018
$16.3
$11.9 $10.7
$16.3
$21.2
$29.4
$0
$8
$15
$23
$30
$38
2013 2014 2015 2016 2017 2018
Revenue ($MM)
Gross Profit ($MM)
Total Volume (MMBbls)
EBITDA ($MM)
$162.0
$258.9
$146.9
$98.0
$145.5
$180.7
$0
$75
$150
$225
$300
2013 2014 2015 2016 2017 2018
1.728
2.855 2.784
2.1672.466 2.476
0.00
0.75
1.50
2.25
3.00
2013 2014 2015 2016 2017 2018
Financials
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Financials Cont’d.
Period ($ in millions except per share data)
2013 2014 2015 2016 2017 2018
Volume (Barrels) 1,728,071 2,854,757 2,784,363 2,167,375 2,466,397 2,476,989
YoY Change 20.4% 65% (2)% (22)% 14% 0%
Revenue $162MM $258.9MM $146.9MM $98.0MM $145.5MM $180.7MM
YoY Change 20.4% 60% (43)% (33)% 48.4% 24%
Gross Profit $16.3MM $11.9MM $10.7MM $16.3MM $21.2MM $29.4MM
Gross Margin % 10.0% 4.6% 7.2% 16.6% 14.6% 16.3%
EBITDA $8.9MM $1.3MM $(17.3)MM $5.7MM $(.1)MM $8.0MM
Adjusted EPS $0.44 $0.05 $(.61) $.19 $.01 $.23
NOLs of ~$54.8MM
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▪ Focus on Improving profitability and growing free cash flow through operational and pricing discipline
▪ Gross Margin of 16.3% for 2018, compared to 15.2% in 2017.
▪ Overall volumes of product sold – which measures reach into the market – was flat for the 12 mos. ended 12/31/2018.
▪ Consolidated per barrel margin increased 100%, as a result of production improvements, continued focus on finished product value enhancement, and
management of costs and spreads.
▪ Top-tier base of refining assets focused on two developing markets – low sulfur marine fuels for IMO 2020 and high purity base oils
for lubrication
▪ Marine fuel sales opportunity currently providing $.08+ per gallon improvement in 2018
▪ Higher merchant spreads anticipated in 2019 with the IMO 2020 Bunker fuel regulations
▪ Heartland facility produces High Purity GII+ Base Oil with long-term strategic value opportunity
▪ Myrtle Grove refinery being developed to produce Group III base oil using its own proprietary technology
▪ Regional Refining model with business hubs located in key geographic areas
▪ Opportunity to optimize logistics, increase supply and capture logistics margin
▪ Allows for “local expertise” in each market, which leads to better customer/supplier relations
▪ Market leverage around pricing – industry leaders in managing spread
▪ New base oil paradigm for refining high purity products from alternative UMO feedstock vs. conventional crude oil
▪ Significant yield advantage of high purity molecules
▪ Economic spread advantage
▪ Lower cost of feedstock
▪ Lower energy cost and lower carbon footprint
Investment Highlights
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Benjamin P. Cowart | Chief Executive Officer, Chairman of the Board, Founder
32 years petroleum recovery industry, pioneering the reclamation industry by developing recycling options for many
hydrocarbon residual materials once managed as hazardous wastes
John Strickland | Chief Operating Officer
30+ years management and marketing of fuels and petroleum blending operations
Chris Carlson | Chief Financial Officer
15 years financial management, energy, commodity, treasury and risk management
Smith Howland | Manager of Refining & Marketing
32 years processing, trading and marketing of petroleum and chemical products
Mike Stieneker | General Manager of H&H Oil Collections
20+ years management and operations of Used Oil Collections
Alvaro Ruiz | Executive Vice President of Corporate Development
20+ years in manufacturing and services industries
Dave Peel | Corporate Advisor
Extensive leadership in operations, engineering, and expansive experience in industry and technical knowledge
Erica Snedegar | Manager of Base Oils and Intermediate Products
15+ Years of experience in selling and marketing refined petroleum products
Management team
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APPENDIX – INFORMATION ON USED MOTOR OIL REFINING
AND SELF COLLECTION SERVICES
▪ The U.S. used motor oil recycling industry is approximately $2.4 -
$2.8 billion.
▪ Of the approximately 1.3 billion gallons of used oil generated
annually, less than 50% is re-refined while the rest is burned or
disposed of improperly.
▪ Cheap natural gas creating need for more re-refinement and
processors like Vertex:
▪ Used oil collectors historically sold to local
industrial burners
▪ Industrial burners are switching to cheap
natural gas, and collectors without infrastructure are now selling
to re-refineries
▪ Market price for burning is linked to cheap natural gas while
price for re-refined oil is more closely linked to higher priced
diesel
▪ As more of the 600 million gallons of burned oil is
re-refined, the market size will increase considerably assuming
the spread between diesel and natural
gas holds
Improperly Disposed
Unrefined Recycled Fuel
Re-refined into
Lubricating Base Oils
Re-refined into
Intermediate Products* Midpoint of estimated ranges; gallons in millions
200
550
325
225
35%
25%
20%
15%
5%Burners
Re-Refineries
Vacuum Gas Oil
Export
High Value Fuel
General Overview 1.3 Billion Gallons of Used Oil
Markets for Used Oil
Used Motor Oil Recycling Industry
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Used Motor Oil Recycling Value Chain
24
Vertical integration enables Vertex to control more of the value chain and capture higher margins.
Generators
▪ Jiffy Lube®, car
dealerships, etc.
Collectors
▪ Collect used oil from
generators
▪ Highly fragmented
Aggregators
▪ Purchase used oil from
collectors
▪ Sell and deliver it
as feedstock for
processors
End Users
▪ End product is used as
an industrial fuel, ship
fuel, base oil or
refinery feedstock
Processors
▪ Technological
upgrades feedstock
into higher-value end
products
Integrated Logistics
Vertex operates and manages a strategic logistics system of terminaling assets for the tendering of ship, truck, rail, and
barges for the supplying and distributions of a wide array of refined and imported petroleum products.
Modes of Logistics
▪ Trucking – Ownership and operation of a vehicle fleet for the
aggregation of feedstock from a network of supply points
throughout the South, East, Midwest and Western United States.
▪ Rail – Vertex has an integrated rail system between business units
to optimize costs and just-in-time-delivery of companies’ refined
and imported products, as well as aggregation of refinery
feedstocks. This expansive rail network provides a logistic
advantage for all of Vertex’s products.
▪ Ship/Barge/Water Logistics – Vertex employs a water born
logistics system for the management of large bulk product
shipments and receivables. This strategy has become increasingly
utilize with the commencement of the Vertex-Penthol venture.
Vertex’s supply chain is carefully managed with cargo shipments of
base oil from a global refiner into the Stolthaven terminal in New
Orleans coordinating truck, rail, and barge deliveries to customers
across North America.
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Our Process▪ Vertex collects feedstocks and processes them into higher value products for end users.
▪ Vertically integrated across the value chain collecting a variety of feedstocks from the same customer.
▪ Vertex also acts as a broker of used motor oil to strategically control more used motor oil supply.
USED
MOTOR OIL
Co
llection
&
Ag
gre
ga
tio
n
Pro
cessin
g
& H
and
ling Broker:
Manage
Logistics/Sales
USED
ANTIFREEZE
Pro
du
ct
Sa
les
Ve
rtic
ally
In
teg
rate
d M
od
el
USED
OIL FILTERS
CHEMICAL &
PETROLEUM
CO-PRODUCTS
Used
Motor Oil
Marine
Fuel
Pro
du
ct V
alu
e Virgin
Antifreeze
Vertex Value-Added Processing:(Refining, TCEP, Materials Recovery, VGO Processing and Hydro Treating)
Leverage Proprietary and off-the-shelf technologies
Raw
Metal
Higher Value
Feedstock
Base Oil &
Lubes
Sold as-is to burners
and refineries
Distillates,
Gasoline &
BlendStock
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Thank you