Hi-Crush Partners in new frac sand purchase deal with Halliburton


Hi-Crush Partners (HCLP) says in has entered into a new long-term frac sand purchase agreement with Halliburton (HAL) which increases the annual minimum committed volumes under previous agreements, extends the term through year-end 2018, and requires HAL to pay a specified price for a specified minimum volume of frac sand each month.

The new agreement also provides for further significant increases in annual volumes dependent on HAL's aggregate annual demand for northern white frac sand.

HCLP +0.6% AH.

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Comments (7)
  • Bbloomlu
    , contributor
    Comments (312) | Send Message
     
    Even with the latest run it still has a lower p/e and better dividend than CRR and SLCA. Thank you HCLP
    23 Jun 2014, 06:36 PM Reply Like
  • MSF INVESTMENTS
    , contributor
    Comments (6441) | Send Message
     
    Much more room to go.

     

    Lahiem
    23 Jun 2014, 09:11 PM Reply Like
  • Factzplz
    , contributor
    Comments (306) | Send Message
     
    My "friends & family" own a HUGE amount of EMES, plus SLCA, HCLP, and ABCAF (and ABHD for water treatment/recycling of fracking water).

     

    In my detailed analysis of the three majors, the following items are a dozen of my reasons to own the sand companies:

     

    1. The market demand is so large for sand that the industry will be "rationing" sand to the highest bidders on "take or pay" contracts for at least three to four more years.

     

    2. New supply cannot come online quickly as the discovery, permitting, buildout, and rail siding takes at least two to three years.

     

    3. HCLP has the highest dividend, now, and has good growth prospects

     

    4. SLCA has a larger float and may attract more institutional investors, as SLCA on May 1 raised its silica sand price 20%.

     

    5. EMES is by far my favorite as its 2014 profits will double, and 2015 will triple from the 2013 level, and by 2015 the dividend will be near $12, which means the stock price will be 2x to 3x higher.

     

    6. EMES has the highest Operating Profit margin and the most efficient operations

     

    7. The new fracking techniques demand 4x more sand, so whatever drillers thought they needed, as they adopt the new methodology to increase yields, they will need 4x more sand.

     

    8. Reports out of the Bakken are about the new "layered" fracking where wells are drilled 4 deep (e.g., 1 mile down, 1.5 miles down, 2 miles, etc.) which means 32 wells from one pad = MORE TRAINLOADS OF SAND.

     

    9. Union Pacific has very bullish comments on the sand business

     

    Advance to 5:20 minute mark...
    http://cnb.cx/1yHk0J1

     

    10. U.S. oil production is growing as more pipelines are built/connected (30,000+ miles in the last 6 years) so more wells can be drilled, increasing sand demand.

     

    11. Chesapeake Energy at the annual meeting said it is adopting the 4x use of sand in formations where it will enhance yields.

     

    12. No other industry has the growth, just 3 suppliers, inventory shortage/constrained, with pricing power, with profit growth to accelerate for two to three years - amazingly as it is in the sand business.
    23 Jun 2014, 09:45 PM Reply Like
  • 27975573
    , contributor
    Comments (397) | Send Message
     
    You did not comment on why your investment ABCAF...??

     

    I would think that their northern location would be strategic advantage
    Plus the run-up in the others; would encourage a stake by others to come.

     

    Thoughts please...
    20 Jul 2014, 12:51 PM Reply Like
  • The Big Bull.
    , contributor
    Comments (5) | Send Message
     
    Up 18% in the last month. ONLY 9% OF SHARES HELD BY INSTITUTIONAL INVESTORS. HCLP has potential to become major momentum player. Wait a few weeks until the daily business TV shows begin to notice and follow HCLP.
    23 Jun 2014, 10:46 PM Reply Like
  • iowaguy
    , contributor
    Comments (101) | Send Message
     
    Biggest negative for HCLP is the IDR structure. This means the general partner will get a cut of future distribution increases. Good for them, not good for shareholders. They currently pay a 52 cent distribution. Past 54 cents, the general partner takes 15% of any further increases. Past 59 cents, the GP takes 25% of each future increase. Past 71 cents, the GP takes 50% of any future increase. Why own HCLP when one can own EMES?
    24 Jun 2014, 12:51 PM Reply Like
  • CmoneyFat_Atlanta
    , contributor
    Comments (17) | Send Message
     
    Because HCLP is pure play on sand and you play momentum and move in/out both. Make more money.
    24 Jul 2014, 03:56 AM Reply Like
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