All right. Hello, everyone, and thank you for continuing to join us throughout the day here at the Lytham Partners Spring 2025 Investor Conference. Again, my name is Robert Blum, Managing Partner at Lytham Partners. And during this next webcast, we welcome TETRA Technologies, ticker symbol of TTI on the NYSE. Participating today from TETRA is the CEO, Brady Murphy, and CFO, Elijio Serrano. Gentlemen, thank you both for your participation. With that, I'll turn the floor over to you both.
Thank you, Robert. Thanks to Lytham Partners for allowing us to participate in your Spring 2025 Investor Conference. Very excited to have the opportunity. Our forward-looking statements. TETRA has been around for over 40 years. Today, we have very diverse revenue streams from the United States and 23 other different countries for Energy Services and Industrial Chemicals. As you can see on the map, we're not in every country around the world, but we are in the key markets that are important to us: the deep water markets, as well as the unconventional markets in North America, Latin America, particularly Argentina, and growing markets in the Middle East. We're viewed as industry innovation leaders for our vertically integrated completion fluids business segment. We're a leading oil and gas, water treatment, and water management service provider.
We feel we have very compelling emerging growth strategies that we'll talk about for energy storage, electrolyte, produced water, beneficial reuse, and critical minerals, all of which are part of the core competencies that the company has developed over the years around aqueous chemistry. An overview: you can see the mix of our trailing 12 months revenues between our completion fluids segment, our water and flowback services segment, and Industrial Chemicals business, which is part of our externally reported completion fluids segment. One of the things we're very proud of is the chart that you see on the right-hand side is the EBITDA margin progression, really going back to 2016 and going through the different cycles, certainly that the oil and gas market has seen during this time, especially COVID.
As we've reshaped the company, made pretty significant divestitures of parts of our business that didn't fit, added competencies and businesses that do fit our strategy, and have continued to increase our margin profile over that period of time. Some recent highlights on the financial side: we had a very strong first quarter. We achieved Q1 adjusted EBITDA margins of 36% for our completion fluids and products and 13% for our water and flowback services. Our Industrial Chemicals business that we mentioned achieved its highest first quarter revenue and adjusted EBITDA in our history. We've given guidance for the first half of the year that would also be at or near record levels for the company for adjusted EBITDA.
We've expanded our Smackover Formation Evergreen Unit, which was approved by the Arkansas Oil and Gas , which contains a lot of the key minerals that we will touch on later in our presentation. We announced a very important collaboration with a key customer, EOG Resources, around our technology and commercial introduction of produced water beneficial reuse pilot. The primary markets that we serve, the Energy Services side, again, consists of our completion fluids, production testing, and flowback water management, and early days in produced water desalination.
We have the Industrial Chemicals business, which is today largely calcium chloride, entering into the battery storage electrolytes and our bromine resources that we have in Arkansas, and then entering into the critical minerals aspect of our business, which we'll talk some more about in our brine resources, rich in both lithium and bromine in Arkansas, and very uniquely positioned with our oil and gas operators, our customers, for not only produced water beneficial reuse, but mineral extraction from that water. A little more detail with our completion fluids business: trailing 12 months revenue, $327 million, as we've mentioned, reviewed as innovation leaders in this space. We do have a global infrastructure in place with long-term bromine supply agreements, and, as I said, a diverse and stable Industrial Chemicals business, as you can see on the pie chart, the distribution of our revenues.
This segment is one that is primarily a lot of our revenue growth is driven by deep water operations. You can see we've made a very strong recovery since the second year of COVID in 2021, grown almost 50% in a trailing 12-month basis for the first quarter of 2025 to $327 million in revenue and 31% EBITDA margins. You know, as importantly, as I said, we're viewed as an industry leader. The reference here of David Bat, industry marketing analyst of Kimberlite , basically points out TETRA in his market surveys analysis that we are viewed as one of the most technically challenged Gulf of Mexico markets, where we are viewed as the leader by our customers and the operators. On the completion fluids side, we see the deep water market continuing to grow over the coming years. We have a strong market share position.
We have very innovative, unique technology, such as our Neptune Fluid. We've made some key investments over the past few years, including deep water Brazil, followed up with a large contract in deep water Brazil. We've made incremental investments in the Gulf of Mexico, Gulf of America, I should say, and the North Sea. As I said, we have some very proprietary offering, which gives us some margin enhancements and margin advantages with the market. Again, this shows some of the trends that have been occurring in deep water and the projections that are shown through 2028 by Rystad, again, fitting the robust market that we're seeing right now in our deep water markets, but even growing further by a 7% CAGR through 2028. Our calcium chloride business: we are number one producer of calcium chloride in Europe, and we're number two in the market in the United States.
This business, you know, obviously is more diversified than our traditional oil and gas services. We serve the agriculture businesses, food and beverage business, road and infrastructure, construction materials, and with some interesting growth opportunities in both lithium extraction and the semiconductor chip manufacturing, which is being insourced back into the United States. As you can see on the chart on the right, our performance in almost every year in a typical GDP type of business, we've been able to outperform the GDP and grow at a higher rate, in fact, accelerating that the last three years. Moving to the water and flowback segment, this segment has also recovered significantly from the second year of COVID, 2021.
Although we are seeing some slight decline in activity due to the North America rig count and frac count, our margins have held up reasonably well, really through the introduction of technology, certainly automation. We're still in the early days of deploying automation in our fleet, so we still have quite a bit of room to grow on that side of the business. Even in a flat to slightly down market, we're expecting to be able to maintain or enhance our margins from where we are today.
The important part of this business for us is the foundation and the route to market for our patent-pending TETRA Oasis, which we have announced at the fourth quarter of last year, along with EOG Resources, who we've been collaborating with for the last three years to really bring what we believe is the first true commercial offering for desalinating produced water and using for beneficial purposes. We'll talk a little bit more about that opportunity. In the water and flowback segment, as we've mentioned, we're really, I think, a leader in introducing technology, particularly as it relates to automation in what is traditionally a pretty high-intensity manpower operations. We're bringing Blue Linx automation to our water transfer operations, reducing personnel by 30%-40%. Automated Sandstorm, again, a 50% reduction of manpower from jobs. Our patented Automated Drill-Out System, again, a 75% reduction.
We're still pretty early days in the rollout and upgrading the fleet to getting fully automated. That is our intention, and we are seeing the benefit of that. That is where we'll be putting our capital, in these capital investments in this segment. Moving from our current core businesses, I want to talk about our emerging growth strategies. There's really three of them, very exciting opportunities for TETRA. One is introducing electrolytes for long-duration energy storage. Second is we've touched on produced water desalination for beneficial reuse. Then the third is critical minerals production and extraction.
On the electrolyte side, we've basically taken a zinc bromide-based completion fluid that we've been using for many, many years in our oil and gas completion fluids business and have developed an electrolyte working with Eos Technologies to put a contract in place, a supply contract in place with them to be their primary provider for their electrolyte. Today, we're the only U.S.-based manufacturer of ultra-pure zinc bromide. We have a patented process for the manufacturing process to get the high purity that we need, and we have a five-year agreement with Eos supporting their growth. Just a few more pictures, diagrams of the Eos battery, the electrolyte that you can see in the tote. And we've mentioned we have an agreement to provide a minimum 75% of their electrolyte needs and 100% of their pure flow zinc bromide needs.
Utility scale battery is really the target for the Eos Technology. It's a long-duration energy storage, a 10-hour to 12-hour charge/discharge cycle time. This traditional hockey stick that you see is actually not a forecast. It is the actual data that has been published to show the growth that the energy storage industry is going through. Moving on to produced water recycling and reuse. The key area for this opportunity is really the Permian Basin. The Permian Basin produces significant amounts of water for every barrel of oil that the Permian produces. This is a chart generated by Rystad that shows the total water production between the Midland Basin and the Delaware Basin is about 8.7 billion barrels per year. A portion of that is treated, the 1.6. So that treatment TETRA is one of the market leaders in.
We treat that for not for beneficial reuse, but for fracking purposes. We treat it and resell it to the operators for fracking. In some, it is reinjected. The bulk of the produced water today is injected into disposal wells, about 6.3 billion bbl per year. What we are bringing to the market is the ability to treat and desalinate that water to be used instead of injection purposes for reuse in markets such as agriculture, industry, data centers, chip manufacturing, etc. This is an interesting chart for the Delaware Basin that was presented at a recent conference that shows the amount of produced water today that is injected in the red bar graphs and then the disposal capacity in the blue portion of the chart.
As you can see, because the disposal wells are starting to overpressure and there is limited pore space to put the amount of produced water that is being injected, there is an intersection coming. This chart shows projected by 2030, we will be out of pore space to put the 6.3 billion bbl of produced water that today is being disposed of. As I mentioned on this slide, the Wall Street Journal called this Oil Patch Manhattan Project because of the urgency of finding a solution so that the entire Permian Basin oil production is not curtailed, suppressed, or cut back significantly just because we do not have a solution for the amount of water that is being produced. This is TETRA's Oasis end-to-end desalination solution that we introduced at the end of last year. Basically incorporates what TETRA has learned over the years treating produced water for frac reuse purposes.
We have partnered up with two membrane technology providers, vacuum membrane distillation through KMX and osmotically assisted reverse osmosis through Hyrec. Our post-treatment capabilities are at the end. This end-to-end solution, we think, is a first to market and fairly unique in terms of the full solution, taking raw produced water and treating to a beneficial reuse purpose in the market. We could not ask for a better partner than EOG, who we have worked with for the last two and a half years to bring this solution to the market. In March, we announced our collaboration for produced water and a pilot project with EOG. Our first pilot was in South Texas. We were able to desalinate 92% of the water to a higher quality level than what is typical municipality drinking water.
The new pilot that we have introduced with EOG is a pilot for rangeland grassland study. We have five other NDAs in place with other major operators and midstream companies that we are closely working with for this solution. Moving on to our last critical minerals, or sorry, our last emerging growth strategy is really critical minerals. The basis for this is really the Arkansas brine leases that we have, where we secured over 40,000 acres of leases in Arkansas in the Smackover Formation, which are very rich in minerals. Those minerals include lithium. Those minerals include bromine, which we use in our completion fluids and also to support the electrolyte for Eos. We have also discovered that they are rich in magnesium and even have very interesting levels of manganese, all of which, or two of which, are on the critical minerals list.
Our bromine project is a project that we have initiated to really keep up with the demand that we're seeing both for our completion fluids on the bromine side because of the deep water growth and also to keep pace with Eos demands. Between the two of them, we anticipated we're going to need close to $75 million lbs in the future of bromine. We're going to take this project in phases. Phase one shown here at $30 million lbs, phase two at $45 million lbs, and phase three up to $75 million bls to be able to phase that in as our existing supply agreements come to an end and we're able to introduce our own lower-cost bromine supply through our own plant.
It also allows us to manage the cash flow from our operations and fund this through our own cash flow operations, which we are on track doing and have very high confidence we will be able to continue to do through the project completion. There are other examples of critical minerals with our customers on the operators. As we're desalinating their produced water, there's obviously a highly concentrated portion of the water that's available for us to extract those minerals, iodine being one of them, lithium chloride, lithium carbonate. We've mentioned bromine out of our own Smackover Formation, calcium chloride, which we're a market leader in, and, as I mentioned, manganese and magnesium. These are all future sources of revenue and earnings for the company. With that, I'll turn it over to Elijio for the financial summary.
Thank you. A few weeks ago, we reported first quarter earnings.
On the left side, you can see that revenue increased substantially sequentially versus the fourth quarter, and it was also higher than the first quarter of a year ago. In our business, we've got a seasonality that occurs in the second quarter of every year. We see a ramp-up of calcium chloride activity in Northern Europe. Now, on the right side, you can see the adjusted EBITDA margins. 21% was the highest that we've seen with the current business configuration that we have. The first quarter results were $10 million better than not only a year ago, but also sequentially. Note also that they were even stronger in the seasonal peak that we have historically seen in the second quarter of every year.
This improvement in EBITDA and margins is driven by our activity in the deep water Gulf of Mexico, where we have technology that is differentiated from our competitors. We completed the first of three major wells for one customer in the Gulf of Mexico. At the end of the quarter, at the end of the first quarter, we're in the process of completing the second. By the end of the second quarter, we'll complete the third well. We also saw activity across Europe and South America get stronger. We picked up a long-term agreement with a major operator in Brazil, and that project is underway this year. Brady mentioned that we've been working on technology to reduce manpower at the job site on the onshore business, and that has also led to stronger results.
When we reported fourth quarter results in February, we provided guidance for the first half of the year. We did not do quarterly guidance because some of the jobs could straddle between Q1 and Q2. While many companies, given the current environment, are recalling consensus or dropping their expectations for what was occurring in the second quarter, we actually increased the lower end of our guidance. You can see at the bottom that adjusted EBITDA, the low end is $57 million above the first half of last year. We previously had indicated that the low end of that guidance was $55 million. We increased our expectations despite the global economic environment and despite a lot of the challenges that our market is going through.
That reflects the competitive advantage that we've got with calcium chloride in the deep water market and the technology investments that we are seeing occur in the onshore business. We are not yet in the first half of the year seeing any material benefit from the growth initiatives that Brady mentioned, but we expect those to have a material impact on our business beginning in the second half of this year. From a balance sheet and a liquidity perspective, you can see that during the COVID-19 downturn, we were materially reducing our debt structure. We're generating cash. Today, we're at a 1.5x leverage ratio. No maturities that we have are revolver that has no amount outstanding on it, does not renew until 2029, and our term loan does not renew until 2030.
We negotiated a term loan that allows us to have a $75 million draw on it that we can use to fund our growth initiatives, and that is available to us in addition to the liquidity that we're sitting on, both of cash on hand and the business that we're generating free cash flow. In summary, if you look at TETRA, a base business performing in a very solid environment when the economy is putting pressure and question marks on the performance of the oil field services sector, three growth opportunities, a solid balance sheet that we're improving by continuing to generate free cash flow that we believe allows a lot of investment opportunities to those that are looking for an opportunity to participate with a company growing beyond its base business and leveraging its aqueous chemistry technology.
Again, really appreciate the opportunity to participate with Lytham at this conference, and we look forward to meeting with investors in the future. If there is any feedback that we can provide in addition to what we have shared today, please reach out to me. Our phone numbers are on our press releases. We will be glad to engage in discussions with you. Thank you again, and we appreciate your participation.
Thank you.
Appreciate it.
All right. Fantastic. Gentlemen, thank you so much for that presentation and to everyone watching here today. Again, as just mentioned, if there are any questions, you can go ahead and reach out to the management team, or you can likewise send me an email. If you would like to learn more about Lytham Partners, visit our website, lythampartners.com, or again, follow us on LinkedIn for future events. Gentlemen, thank you so much for your participation today.
Thank you, Robert.
Wonderful. Everyone, have a great rest of the conference.
Thank you.