Rock Products

SEP 2018

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www.rockproducts.com ROCK products • September 2018 • 21 FRAC SAND INSIDER Hi-Crush Partners reported second quarter 2018 results. Revenues for the second quarter of 2018 totaled $248.5 mil- lion on sales of 3,037,504 tons of frac sand. This compares to $218.1 million of revenues on sales of 2,617,627 tons of frac sand in the first quarter of 2018. The limited partners' interest in net income was $60.5 mil- lion for the second quarter of 2018, resulting in $0.68 basic and $0.67 diluted earnings per limited partner unit. For pur- poses of calculating earnings per unit, the general partner's allocation of net income was $7.6 million for the second quarter of 2018. Earnings before interest, taxes, depreciation and amortiza- tion adjusted for earnings from equity method investments was $81.5 million in the second quarter of 2018, compared to $64.5 million for the first quarter of 2018. Distributable cash flow attributable to the limited partners for the second quarter of 2018 was $66.6 million compared to $56.4 million for the first quarter of 2018. Distributable cash flow attribut- able to the holder of the incentive distribution rights for the second quarter of 2018 was $7.8 million compared to $2.0 million for the first quarter of 2018. "The Hi-Crush team's dedication to execution and customer service was instrumental in achieving record volumes this quarter and increasing volumes by 16 percent sequen- tially over the first quarter," said Robert E. Rasmus, chief executive officer of Hi-Crush. "Our strong financial results reflect our expanding capabilities and the investments we have made throughout the cycle, particularly in frac sand logistics. Our announcements last week of the acquisition of FB Industries, execution of the amendment to an existing supply agreement with a major E&P in the Permian, and the related contract-backed expansion of our Northern White and in-basin Permian capacity, evidence our commitment to investing in our future to further improve our operating results and cash flow." Atlas Sand Co. celebrated the grand opening of its Kermit, Texas, facility. On July 29, the first scheduled deliveries of frac sand from the Atlas Kermit site were fulfilled. The Kermit facility's anticipated production capacity is currently 4 mil- lion tpy; management estimated that the facility would reach this production rate within the first six weeks of operation. Details of the company's future expansion plans at Kermit are to be announced at a later date. Atlas Sand's founder and chairman Ben M. "Bud" Brigham said, "Today marks a huge step for Atlas. Since the forma- tion of the company in April of last year, we've been working hard towards our vision of building the best-in-class, built to last frac sand production facilities. With Atlas Kermit now operational, we're very pleased to be able to reliably provide our customers with the high quality local Permian frac sand they need. The giant open dune deposits that we are mining have important advantages relative to buried sand deposits, including less pedogenesis and thus fewer impurities, and thousands of additional years of mother nature's winnowing and sorting to enhance sphericity and thus quality." Hunter Wallace, the company's COO, added, "The team has done a remarkable job getting this plant online. From the outset, we determined that for in-basin sand production to work optimally in West Texas, the industry needed more than just ordinary frac sand mines. With the shift towards local product, the Permian needs highly efficient frac sand produc- tion facilities that are not susceptible to frequent production interruptions, which have the potential to reverberate into non-productive time at the well site. With our best-in class load-out design (including seven lanes and approximately 225 truckloads of dry storage per lane), we expect to effi- ciently and dependably cycle upwards of 500 trucks through the facility daily. I can't say enough about how pleased we are with the creativity, flexibility and dedication that our employees have exhibited as we endeavored to create a truly differentiated approach to the production of frac sand." Atlas Sand's Monahans facility is slated to begin commercial production later this year, and management expects the facil- ity to reach a production rate of 4 million tpy shortly after the facility's opening, with future expansion plans to be detailed at a later date. Hi-Crush Reports 3 Million Tons Sold in Second Quarter Atlas Sand Co. Opens New Kermit, Texas, Facility

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