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  • T
    Timothy
    Just my opinion on hclp, First if you look at what Rasmus has done with the changing market, (Yes Sammy they made money, and they still have over $60 million in cash,) but spent capital to grow and evolve the company to meet a changing market. “A Houston company has acquired a fast-growing Denver fracking sand and delivery logistics business, expanding its reach in the U.S. oil and gas production industry.
    Hi-Crush Partners LP (NYSE: HCLP), a seller of fracking supplies and owner of sand mines, on Wednesday bought Denver-based Pronghorn Logistics LLC, a 21-month-old business that acquires fracking sand and organizes deliveries according to an oil and gas company’s drilling schedule.
    Terms of the deal were not disclosed.
    Pronghorn CEO Dirk Hallen and COO Stephen White, the co-founders of Pronghorn, will remain as managers of the business. The company’s 100 workers are staying on too, becoming Hi-Crush employees with a Denver home base, the companies said.
    Selling to Hi-Crush should help Pronghorn’s growth accelerate, Hallen said in an interview with Denver Business Journal.
    “They have all the resources of a public company, and their own sand mines that we’re free to use,” he said. “It really allows us to bring our playbook to bear for clients on a lot larger scale.”

    To put in a simpler way for you Sammy, they are “Evolving” to meet and improve the business needs.
    I agreed with the suspension of the dividends for hclp, the need for capital to grow the company was needed.

    “Instead of supplying fracking services companies with sand, Pronghorn Logistics strikes contracts directly with the oil and gas production companies — the owners of the wells — allowing Pronghorn to customize a fracking sand supply and delivery schedule in ways that drive down costs.”
    This mean they are giving benefit to hclp customers. This in return will drive demand for HCLP over other providers.

    “Let me start with a quick summary of the 2 relatively small, but very important and strategic acquisitions we recently completed, the PropDispatch software and Pronghorn Logistics business. Technology has become an important part of our offering, helping us and our customers work more efficiently and ultimately facilitating lower drilling and completion cost and elimination of [NPT].

    “Also during the first quarter we completed the ramp at our second Kermit facility contributing directly to the 22% sequential increase in sales volumes realized over the fourth quarter. “

    With the expense of both PropDispatch and the cost to complete Kermit facility. We should see a much better 2Q.

    HCLP is still a long term play, HCLP is in my mid to high risk portfolio, hold on to your shares, the short term lose for me right now is over 200k, I believe with 3Q the stock will rebound. Right now is the time not to sell but to buy.
  • R
    Ra
    Management says the "steep decline in pricing during the second half of 2018 [was] due to a large increase in supply from newly constructed in-basin Permian production facilities, a slowdown in completions activity driven by E&P budget exhaustion and pipeline capacity constraints." Additional capacity affecting prices is negative for the forward outlook. The slowdown in spending for well completions is likely somewhat transitory because the pipeline capacity constraints in the Permian will eventually be addressed. The harder thing to predict is whether oil prices will warrant further increases in E&P completion spending. Right now oil futures are still in contango, so I would expect crude oil prices and E&P budgets to drop (or remain the same) in the very near future. On the whole, I'd say the outlook is slightly negative for the very near term and would add that the upcoming vote to convert the partnership to a corporation adds another layer of risk.
  • T
    Timothy
    Summary
    Kermit 2 will drive volume and margins higher starting with next quarter's report.
    Converting to a C-Corp should eliminate much of the uncertainty regarding future management actions.
    Valuation is much too depressed considering the company's cash horde and a possibly much better second half in 2019 and beyond.
    Hi-Crush Partners LP (HCLP) has been roasted over the flames the past 6 months with unrelenting selling pressure which I believe might be coming to an end here shortly. Hi-Crush's next quarterly report in May will feature pretty much a whole quarter's worth of ramping up Kermit 2's volumes, along with an update of the company's C-Corp conversion expected to close sometime before the end of the first half of 2019. Although sentiment for the sector seems to be perpetually at rock bottom and dropping, Hi-Crush's valuation and future prospects might be worth taking a chance on at this time especially if you believe the market is a forward looking entity.
    Hi-Crush's Q4 earnings report and management are primarily concerned about where the company is heading in the future now that it has its newest facility Kermit 2 ramping up towards full capacity. CapEx should moderate noticeably for the company moving forward as Kermit 2 construction has been completed and its Wyeville facility expansion remains on target for completion in Q1 2019. It is now in prime position to benefit from the clearing up of the Permian's pipeline bottleneck issues that have hampered the Permian since last fall as several new pipelines are scheduled to come online in the back half of 2019.
    Kermit 2 will double Hi-Crush's potential volumes in the critical Permian Basin going forward at a significantly better contribution margin than its Northern White operations. Kermit 2 avoids costly train transportation to basins that Northern White facilities use and will utilize different roads in the Permian than Kermit 1as it will also help promote the company's differentiating PropStream and Silo solutions. This is one reason that management has forecasted first quarter's sales volumes to come in at 2.4-2.6 million tons, a possible 21.4%-31.5% sequential increase from Q4's volumes which were a paltry 1,976,805 tons. The Producer Price Index for hydraulic fracturing sand hopefully will be nearing a bottom also in the second half of 2019 as takeaway capacity finally starts to clear up and things hopefully revert back to a more normal state in the Permian.
  • H
    Hilltee
    Another answer from HCR on a stocktwits message board members question.......reply from Mr Bailey HCR’s investment analyst - he is obviously monitoring this board) “I appreciate your engagement. Our continued participation in conferences, and engagement with investors at those conferences, is indicative of our continued belief in our business, and ability to speak positively and realistically about it. As we have communicated to the market in presentations, conference calls, 1x1 meetings and press releases, HCR’s liquidity position and ultimate solvency is not in question. What is talked about on message boards or elsewhere, contrary to the facts presented in our public statements and financial releases, is beyond our control. Aside from the actions of our particular company, the macro environment for sand is not strong, and is the reason we continue to emphasize and grow our logistics operations. In this area of the business, as I am sure you are aware, there is the ability to distinguish ourselves for equipment and service quality, and to continue to generate good returns in recognition of that distinction.”
  • T
    Timothy
    Summary
    Kermit 2 will drive volume and margins higher starting with next quarter's report.
    Converting to a C-Corp should eliminate much of the uncertainty regarding future management actions.
    Valuation is much too depressed considering the company's cash horde and a possibly much better second half in 2019 and beyond.
    Hi-Crush Partners LP (HCLP) has been roasted over the flames the past 6 months with unrelenting selling pressure which I believe might be coming to an end here shortly. Hi-Crush's next quarterly report in May will feature pretty much a whole quarter's worth of ramping up Kermit 2's volumes, along with an update of the company's C-Corp conversion expected to close sometime before the end of the first half of 2019. Although sentiment for the sector seems to be perpetually at rock bottom and dropping, Hi-Crush's valuation and future prospects might be worth taking a chance on at this time especially if you believe the market is a forward looking entity.
    Hi-Crush's Q4 earnings report and management are primarily concerned about where the company is heading in the future now that it has its newest facility Kermit 2 ramping up towards full capacity. CapEx should moderate noticeably for the company moving forward as Kermit 2 construction has been completed and its Wyeville facility expansion remains on target for completion in Q1 2019. It is now in prime position to benefit from the clearing up of the Permian's pipeline bottleneck issues that have hampered the Permian since last fall as several new pipelines are scheduled to come online in the back half of 2019.
    Kermit 2 will double Hi-Crush's potential volumes in the critical Permian Basin going forward at a significantly better contribution margin than its Northern White operations. Kermit 2 avoids costly train transportation to basins that Northern White facilities use and will utilize different roads in the Permian than Kermit 1as it will also help promote the company's differentiating PropStream and Silo solutions. This is one reason that management has forecasted first quarter's sales volumes to come in at 2.4-2.6 million tons, a possible 21.4%-31.5% sequential increase from Q4's volumes which were a paltry 1,976,805 tons. The Producer Price Index for hydraulic fracturing sand hopefully will be nearing a bottom also in the second half of 2019 as takeaway capacity finally starts to clear up and things hopefully revert back to a more normal state in the Permian.
  • F
    FuckCancer
    I thought it was very interesting that there was no press release concerning the two recent purchases. They usually put out something no matter how small it is. Listening to the CC was a train wreck, IMO. Almost half the call was used in explaining their two most recent purchases. I way I read into that is that they had nothing very positive to talk about in the actual financial results and used this topic as a filler. Unfortunately I do not have any confidence in their guidance. They have been wrong for so many quarters that I have lost count. It would have been nice for them to throw us a bone and give us a token distribution...or better yet, use some of the 'extra' cash to pay down/off the outstanding notes. Having only one analyst ask a question shows either no one else was on the call or they have also lost confidence and didn't ask a question.

    Like so many of us I am taking on heavy losses. I am trying to be positive and find a reason 'or two' to buy more. With my B-E way above the current price I have plenty of time to buy more as I think this will be dead money for quite some time. IMO, the conversion needs to take place then the company needs to get their act together and be able to forecast correctly and then execute. I believe it will be several quarters before the share price meaningfully moves up...and that's if they meet and exceed expectations...and I did not hear anything on the call that was going to really cause that to happen this year, at least. Wish I could be more positive. GL.
  • r
    rob
    Market Beat has price target at $7.27. GL
  • T
    Timothy
    Hi-Crush launches $25M stock buyback, reiterates Q2 sales volume outlook
    Jun. 10, 2019 8:00 AM ET|About: Hi-Crush Inc. (HCR)|By: Carl Surran, SA News Editor
    Hi-Crush (NYSE:HCR) +9.9% pre-market after its board approves a $25M stock repurchase program, effective through June 30, 2020.
    HCR says the buyback program repurchase program and the recent purchases of shares by management represent nearly 15% of outstanding shares.
    HCR also reiterates guidance for Q2 quarterly sales volumes of 2.5M-2.7M tons, and says it has no borrowings under its senior secured revolving
    credit facility and is in compliance with all credit agreements.
  • B
    Bruce
    A false and deceptive post about HCR's debt was placed in the comments section for several hours before it was deleted.
    I will state the facts below. Notice that HCR has a better bond rating than some short sellers have implied:
    According to the Feb 6 2019 Earnings call
    Fulton: “the senior notes that we entered into last summer that have no maintenance covenants and no maturities until 2026”

    According to the June 10, 2019 8-k SEC filing
    “As of June 7, 2019, Hi-Crush had $53.7 million of cash and $55.0 million in available borrowing capacity under the ABL Facility, resulting in total liquidity of $108.7 million. As of June 7, 2019, the Company had no borrowings under the ABL Facility, and was in compliance with the terms and conditions under all credit agreements.

    "Our balance sheet remains very well-positioned to support ongoing strategic and accretive initiatives, including returning capital to our shareholders through the stock repurchase program, while maintaining strong liquidity and financial flexibility," said Laura C. Fulton”

    According to the last 10-K
    Liquidity and Capital Resources
    Overview
    We expect our principal sources of liquidity will be available cash, cash generated by our operations, and if needed, supplemented by borrowings under our ABL Credit Facility, as available. We believe that cash from these sources will be sufficient to meet our short-term working capital requirements and long-term capital expenditure requirements. As of February 14, 2019, our sources of liquidity consisted of $61,467 of available cash and $58,721 pursuant to available borrowings under our ABL Credit Facility ($79,788, net of $21,067 letter of credit commitments).
    We may also sell, from time to time, common units representing limited partner interests in the Partnership up to an aggregate gross sales price of $50,000 under an equity distribution program. Our general partner is also authorized to issue an unlimited number of units without the approval of existing limited partner unitholders.
    We expect that our future principal uses of cash will be for working capital, capital expenditures, funding debt service obligations, making distributions to our unitholders and any repurchases of common units.
    Senior Notes and ABL Credit Facility
    As of February 14, 2019, we have $450,000 of 9.50% Senior Notes which mature on August 1, 2026 and had $58,721 of undrawn borrowing capacity ($79,788, net of $21,067 letter of credit commitments) under our ABL Credit Facility. The ABL Credit Facility contains customary representations and warranties and customary affirmative and negative covenants, including limits or restrictions on the Partnership’s ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate, and dispose of assets. As of December 31, 2018, we are in compliance with the covenants contained in the ABL Credit Facility.
    Borrowings under our Senior Notes and ABL Credit Facility are secured by substantially all of our assets. In addition, our subsidiaries have guaranteed our obligations under both credit agreements and have granted the lenders security interests in substantially all our their respective assets. For additional information regarding our Senior Notes and ABL Credit Facility, see Note 10 of the Notes to Consolidated Financial Statements included in Item 15. "Exhibits, Financial Statement Schedules" of this Annual Report on Form 10-K.
    Credit Ratings
    As of February 14, 2019, the credit rating of the Partnership’s Senior Notes was B3 from Moody’s Investors Service Inc. and B- from Standard and Poor’s.
    The credit ratings of the Partnership’s Senior Notes reflect only the view of a rating agency and should not be interpreted as a recommendation to buy, sell or hold any of our securities. A credit rating can be revised upward or downward or withdrawn at any time by a rating agency, if it determines that circumstances warrant such a change. A credit rating from one rating agency should be evaluated independently of credit ratings from other rating agencies.
    Off-Balance Sheet Arrangements
    We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material effect on our current or future financial condition, changes in financial condition, sales, expenses, results of operations, liquidity, capital expenditures or capital resources.
    The Partnership has long-term operating leases for railcars and equipment used at its terminal sites, some of which are also under long-term lease agreements with various railroads.

    According to the 2019-08-09 10-Q:
    As of June 30, 2019, we had $59,182 of available borrowing capacity ($80,799, net of $21,617 letter of credit commitments) and no indebtedness under our ABL Credit Facility. As of June 30, 2019, the Company was in compliance with all covenants in the ABL Credit Facility.
  • S
    Stefan
    Does anyone think we could file a civil suit against Rasmus, and other board members for fraud? Am I correct that they also overpaid as much as twenty times what some property's were worth to increase their 12 percent take later, or did they get a cut through some others means? There also seems to be insider trading going on. They bought stock before the buyback , knowing that they themselves approved of it. There are so many examples of questionable activities. Could the be held personally responsible for our losses? we could form a group of us, and all chip in for the best lawyer on the planet to get them. We might not get money from a bankrupt company, but we could get the con artist's money.
  • s
    sam
    excerpts from Rasmus CC :

    1) first of all, thank you all for attending, Mom, Dad, Aunt Molly, Uncle Gilbert.

    2) secondly as you all probably know, we lost a lot of money again, but my pay is just fine, so thats good! Also, my buddies who were general partners really cleaned up with severance and payouts, so thats all good.

    3) Margins are dropping , as are sales, and expenses are rising. Despite high oil prices, and Booming development in the permian, we have been able to lose money consistently, and we see no end in sight, so we have that going for us.

    4) many of you seem to be concerned about our stock price dropping fro $60 to $2.70. I can explain this and its unwarranted !! it seems too many people are focused on our performance and financial statements! I wish people wouldn't do that, I dont! I like to use other metrics, like number of sunny days over cloudy days. its manipulation when people sell our stock just because we always underperform, and dont make any money, and dont have any chance to ever make any money. shareholders shouldn't be so greedy.

    5) ok, Ill take questions now!.....the Moderator lets Bob know they only have one person on the line, and its his mother....Bob ends the call.
  • G
    Gary
    This distribution meaningfully increases the cash paid directly to unitholders, while also improving our organizational flexibility by allowing for the potential conversion of the Partnership from an MLP to a C-Corporation at some point in the future. Our partnership agreement includes an IDR reset provision, which requires four consecutive quarters of distributions above $0.7125 per unit, and provides one path of many to a potential conversion to a C-Corporation. The Board maintains significant flexibility with respect to future capital return decisions, and is committed to delivering value to unitholders over the near- and long-term."
  • B
    Bruce
    If any of you purchased shares just after the Hi-Crush 2017-02-28 capital raise, I think you could file a claim. That must be done before Aug 16. If the statute of limitations has not expired, a rescission based lawsuit could likely be filed based on the argument that Hi Crush over paid for their Kermit Permian basin property & for the general partner’s Whitehall sand plant which was purchased a short time later using the money from that capital raise. The some of the information from this article would be used to show that they grossly overpaid for those plants:
    https://www.reuters.com/article/us-usa-oil-hicrush-deals-insight/how-a-texas-shale-suppliers-founders-made-fortunes-as-the-firm-failed-idUSKCN2591JE
    Whitehall was idled till mid-late 2016 because it had a higher production cost than their other plants. It also cost more than similar NWS plants. Given that this article is so close the Aug 16th deadline, it seems like it was the authors got the information from a rescission based lawsuit that was just filed. However, I was not able to find the existence of such a lawsuit when I searched for it on the internet. Hi Crush was successfully sued because their 2012 IPO was materially misleading. After talking to a stock broker and a lawyer about a different case, I believe you need to submit trade confirmations showing that you purchased Hi-Crush just after that Feb 2017 capital raise and that you sold it at a loss at a later date. Your brokerage statement might be able to be used instead of the trade confirmations. The brokers realized gain loss can be used to add up losses but it is not very good for proving that the losses occurred. You can submit a proof of claim electronically via:
    https://www.kccllc.net/hicrush
    then clicking on the submit a claim electronically button near the upper left
    On July 7, the board of directors at Texas fracking sand supplier Hi-Crush granted nearly $3 million in bonuses to four top executives, including $1.35 million for CEO and founder Robert Rasmus.
    On July 7, the board of directors at Texas fracking sand supplier Hi-Crush granted nearly $3 million in bonuses to four top executives, including $1.35 million for CEO and founder Robert Rasmus.
    www.reuters.com
  • H
    Hilltee
    Went and did a little more digging into Canadian Premium Sand, who we are working on a project with. Basically it looks like they are enlisting HCR to provide equipment and expertise to develop their sand mine known as the Wanipigow Sand Project. So basically HCR is going to sell them the equipment and expertise to get this environmentally sensitive project up and running in the most economical way possible. We will likely see revenue in the form of equipment sales, and consulting fees. Not to mention they will likely employ propdispatch to track logistics and control sand inventories. In addition, it appears that Canadian has agreed to some type of contract to purchase NWS from HCR in the short term, until their plant is approved and producing sand on their own. I guess it is a win, win. It is awesome that Hi-Crush is seen as the go-to for this type of project.
  • T
    Timothy
    What’s in Frac Sand?
    Frac sand is a naturally occurring crystalline silica (quartz) sand that is processed from high-purity sandstone. In its make-up, frac sand differs only slightly
    from other types of sand, as grains of quartz silica are a major constituent of most inter-coastal sands. The difference is that other sand is a mixture of several
    minerals and rocks types, which are less durable than quartz, not just any sand can be used in Fracing.
    Frac sand grains are unique in their resistance to being crushed, as well as their very round granule shape. This makes them ideal for use in the process of fracking.

    The Growing Demand for Frac Sand
    With recent higher oil prices, activity in shale basins across the United States is increasing. To keep up with the production pace, frac sand demand is expected to
    climb accordingly, increasing to 115 million tons in 2019, up from 82 million tons in 2017.
    The demand for locally-sourced frac sand is also growing. When oil prices plummeted in mid-2014, production companies across the U.S. set their sights on uncovering
    new methods of extracting oil, cheaper and more efficiently.
    Current estimates indicate using in-basin sand will reduce the total cost of drilling and completing a well upwards of 5 to 10 percent.
    Permian Basin producers are leading the charge for in-basin sand––mainly driven by the economic benefits that follow simplified logistics. All told, in-basin frac sand has the
    potential to save Permian producers $500,000 per well. Basin-wide this equals an estimated $3.5 billion in savings per year.
    In 2017, an estimated 50 billion pounds of frac sand was used in the basin – double 2016’s total and four times what was used in 2014.
    Demand is expected to climb, reaching 119 billion pounds by 2022. By then, the Permian alone is expected to account for a full 40 percent of the total projected sand use in all
    U.S. shale plays.17770 N. FM Road 874, Kermit, TX 79745
    The Kermit, TX, site, home to two production facilities, provided the first in-basin frac sand in the Permian Basin.
    In-basin proppant can be trucked to the wellsite rather than transported by rail, significantly reducing costs and
    logistical complexities for our E&P and service company customers. With our full-scale facilities at Kermit, and our
    transload facilities at Pecos, Odessa and Big Spring, Hi-Crush can service more than 95% of all proppant consumption within the optimal 75 mile distance.
  • M
    Mark
    Having lost about 70 percent of my investment, the good news is that there is very little left to lose.
  • R
    Ra
    The link below provides a well reasoned price forecast for North American fracking sand. The projected prices for sand over the next few years are much lower than the average sales prices for Hi-crush sand over the last two reported quarters. With pricing under pressure because of oversupply, I expect Hi-crush to report lower average sales prices and shrinking margins for the 2Q 2019 and perhaps for 3Q 2019, as well. If the margins continue to shrink, the most likely direction for the equity price is lower. I'm still looking for a price in the low $1 range after the 2Q report is released in early August. Please correct me if I have missed something.

    https://www.marinelink.com/news/frac-sand-prices-remain-flat-466566
    Demand for sand to be used by the oil and gas industry in hydraulic fracturing operations in the US is set to grow by 10% in 2019 and 17% in 2020…
    Demand for sand to be used by the oil and gas industry in hydraulic fracturing operations in the US is set to grow by 10% in 2019 and 17% in 2020…
    www.marinelink.com
  • H
    Hilltee
    Should be interesting earnings next week. I predict they beat AGAIN. But of course the market will probably not reward us/them. I will have my key take-aways ready for Sam shortly after the release. He always requests them as soon as I can get them written.
  • T
    Timothy
    hclp is a good buy, but its a long term investment, good finical and a lot of wells are not finished do to low oil prices, once oil prices go up and it will, stock will go up. They out perform in efficiency and management from mine transport to end user.
  • H
    Hilltee
    From the SND call.......
    As we said time and time again, quality matters. We believe finer mesh Northern White sand outperforms regional sand in every measurable way. And most importantly, in crush strength and turbidity. As lateral lengths continue to grow, so does the need for Northern White sand.

    In the Bakken, Marcellus and Utica Basins, Northern White sand remains the proppant of choice. But we believe there is also a value proposition in the other operating basins. Regional sand presents many problems. They include, trucking congestion and safety concerns, lower production decline curves, lower EURs and long-term supply chain sustainability questions. We're convinced that over the long term, E&Ps will come to further appreciate the benefits of high-quality Northern White sand. They'll see how it can help them achieve better long-term well results and ultimately, higher cash flows, plus higher returns on their invested capital.