Hi-Crush Partners LP reported second quarter 2017 results. Revenues for the second quarter of 2017 totaled $135.2 million on sales of 2,112,516 tons of frac sand. This compares to $83.4 million of revenues on sales of 1,384,887 tons of frac sand in the first quarter of 2017.
The limited partners’ interest in net income was $16.4 million for the second quarter of 2017, resulting in basic and diluted earnings of $0.18 per limited partner unit.
“We are excited by the strong results we achieved for the second quarter, driven by robust completions activity and demand for frac sand,” said Robert E. Rasmus, chief executive officer of Hi-Crush. “In line with expectations, we sold 2.1 million tons of frac sand, approaching full utilization across our facilities. Growth in sand demand, combined with increasing prices throughout the quarter, resulted in $23 million of distributable cash flow. Frac sand fundamentals continue to be positive, particularly for fine mesh sand, and execution continues to be critically important. We are proud of our team’s success in meeting the rapid growth in activity and managing the increasingly complex demand dynamics of our customers.”
The partnership also announced the completion of construction, commencement of operations and sales of frac sand from its Kermit facility on July 31, 2017. The 3-million-tpy production facility is expected to ramp up operations over the remainder of the third quarter and reach full capacity in the fourth quarter of 2017.
“We are pleased to announce the commencement of operations at Kermit,” said Rasmus. “We are extremely proud of our construction team, who quickly mobilized to design and construct our fifth world class facility in record time. The completion of the Kermit facility two months ahead of schedule and under budget is a testament to our execution ability as well as the unique relationships we have with our contractors.
“In addition to the contracts we have in place for the capacity of the Kermit facility, we have successfully completed negotiations with new customers, the end users of sand, and we are selling sand today,” added Rasmus. “The facility enhances our ability to serve our customers with the sand they desire. In-basin sand will play an important role in the ongoing evolution of the frac sand industry and our successful completion of Kermit positions us as the first-mover. Our proven and continued execution will drive significant benefits to Hi-Crush today and over the long-term.”
The partnership remains on schedule for the construction of its new unit train capable terminal with silo storage in Pecos, Texas. The terminal will be the largest in the southern Delaware Basin and will complement Hi-Crush’s existing terminals in the Midland Basin. Combined with in-basin sand production from the Kermit facility, Hi-Crush will have the ability to efficiently deliver sand to reliably meet customers’ needs in the most active basin in the United States.
“Our Pecos terminal in the Delaware Basin will complement our Kermit facility, ensuring we are able to provide the full range of products demanded in the basin,” said Rasmus. “Now more than ever, logistics serve as a major differentiator supporting the reliable and cost-efficient delivery of frac sand. Hi-Crush is positioned as a leader with a network of owned in-basin terminals with unit train capabilities, extensive customer relationships, and PropStream, our last-mile containerized delivery solution. Navigating the logistics of frac sand delivery with consistency and efficiency is critical to ensuring reliable supply to our growing base of customers and ultimately leads to higher market share and growth in profitability.”