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COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp

Hi-Crush Partners Lp · Dec 2, 2014 · 31 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 1
    COWEN AND COMPANY 4TH ANNUAL ULTIMATE ENERGY CONFERENCE DECEMBER 2014
  2. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 2
    A Portfolio of Opportunity Wisconsin 7.5 million tons of annual production capacity* Over 30 years of reserves Marcellus & Utica Exclusive rail access Largest distribution network Further expanding storage capabilities…
  3. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 3
    Hi-Crushs Competitive Advantages Long-Term Contracted Cash Flow Visible Avenues to Growth Low-Cost Producer Long-Lived, High Quality Reserves Prime Portfolio of Assets Focused Strategy Focused Priorities Meeting Our Returns…
  4. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 4
    Delivering Outstanding Results 3.8 million tons of frac sand contracted in 2014; increasing to 6.6 million tons Predictable Cash Flow in 2015 Long-term double-digit annual distribution growth Completed 2.6 million ton per year…
  5. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 5
    Industry Backdrop
  6. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 6
    Industry Trends Drive Continued Demand Growth 81% of US rigs running as of 11/7/14 Targeting of Shale & Unconventional Reservoirs were horizontal or directional. Morgan Stanley (November 10, 2014) Pad Drilling 2010A 2013A 2018E…
  7. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 7
    Frac Sand Demand Remains Strong E&P operators are using fracture stimulation techniques, such as increased proppant per stage and increased frac stages per well, to drive well performance These activities are driving premium Northern…
  8. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 8
    Increasing Demand Not Dependent on Rig Count Drilling Pad Completion Continued efficiencies drilling intensity trends 2012 2013 2014 2015 The difference between this cycle of onshore NAM margin expansion and the last one…
  9. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 9
    Core E&P Acreage Offers Attractive Returns 85% of our shipments go to basin with IRRs over 35% Basin IRRs(1) 80.0% 71% 70.0% 59% 57% 60.0% 51% 48% 47% 47% 50.0% 40.0% 37% 30.0% 20.0% 10.0% (1) Source:…
  10. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 10
    Drilling Activity Supported by Low Breakeven Prices Q3 sand shipment destinations have breakeven prices well below 70/bbl WTI Oil Breakeven Prices (/bbl) (1) 100 80 63.04 60 51.64 53.71 53.84 50.41 42.77 39.30 40…
  11. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 11
    Positioned to Meet Demand Growth 3.8 million contracted take-or-pay tons in 2014 Signed 11 new contracts or amendments to contracts YTD 2014 6.6 million contracted take-or-pay tons in 2015 88% of production capacity Sponsors…
  12. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 12
    Tons Sold FOB Mine During the Quarter Q3 2014 FOB Mine Sales (1) (3) 32% (2) 33% Permian / Eagle Ford 68% Volume Marcellus / Utica FOB Mine Sold at Colorado Volume 50% Terminals Oklahoma Other 9% 6% 2% (1)…
  13. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 13
    Logistics Flexibility Critical Access to all major U.S. oil and gas basins Augusta Facility Sponsors Whitehall Facility Direct loading and unloading of unit trains Sandstone Formations In-basin terminals across Marcellus…
  14. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 14
    Hi-Crush Terminals Addressing Customer Needs 1 2 Q3 2014 Sand transported by Sand sourced from rail to destination mine terminal Ability to source from Hi-Crush On-site rail access is significant mines, the Sponsors Whitehall…
  15. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 15
    Rail Access Provides Direct Link from Mine to Basin Class-1 rail lines provide efficient and cost effective access to drilling activity Majority of sand sold into leading areas of activity 2014 Projected Capex by Play (1) ( in…
  16. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 16
    Committed to Growing Distribution Long-Term Pattern of raising distribution with quarterly increases 28% increase from distribution paid Q4 2013 vs paid Q4 2014 Delivered on guidance at high end of 2.30-2.50 per unit distribution…
  17. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 17
    Strong Coverage Provides Flexibility for Growth Strong coverage ratio averaging above target coverage of 1.20x Average since 1/1/13 of 1.26x Coverage supports step-change in distribution growth and organic expansion 40 (3) 1.80x…
  18. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 18
    Levers for Further Performance 19
  19. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 19
    Hi-Crush Operations
  20. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 20
    Proven Production Execution 7.5 MM tons/yr Nameplate capacity of 20/70 sand 6.8 MM 100 mesh tons/yr 4.6 MM tons/yr 3.6 MM tons/yr 4.2 MM tons/yr 3.2 MM tons/yr Wyeville + Wyeville Augusta + + 1.6 MM Augusta Augusta…
  21. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 21
    Capacity Increases Driven by Customer Demand 4.2 Year Average Life 4.5 Year Average Life 2.8 Year Average Life 2.5 Year Average Life 1.2 MM 2.4 MM 3.8 MM 6.6 MM Tons Tons Tons Tons Under Under Under Under Contract…
  22. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 22
    Frac Sand Capacity Frac Sand Market Structure (1) Top 10 Producers Hold 75% of Tier-One Capacity (1) (2) 15% 24% 11% 9% 6.8 8% Million 13% 8% Tons 20/70 28% 72% Capacity (3) 7% 3% 3% 29% 3% 11% 3% 5% 10% 10% Non…
  23. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 23
    Our Business Model Q3 2014 Operating Results Tons produced and delivered 1,027,611 Tons sold 1,180,602 Production cost/ton 13.89 Hi-Crush plants Sold FOB plant direct to customer (68%) Sold at the Sand delivered terminal…
  24. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 24
    Low Cost Structure Essential Hi-Crush Partners Production Costs per Ton Produced and Delivered 25.00 1,200,000 1,000,000 20.00 800,000 15.00 600,000 10.00 400,000 5.00 200,000 0.00 1Q 2013 2Q 2013 3Q 2013 4Q…
  25. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 25
    Appendix
  26. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 26
    Third Quarter 2014 Summary Three Months Three Months Ended Ended September 30, 2014 September 30, 2013 Recasted Revenues 102,316 53,158 Cost of goods sold (including depreciation, depletion, and amort.) 55,640 31,868 Gross profit…
  27. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 27
    YTD 2014 Summary Nine Months Nine Months Ended Ended September 30, 2014 September 30, 2013 Recasted Recasted Revenues 255,618 114,995 Cost of goods sold (including depreciation, depletion, and amort.) 143,665 58,613 Gross profit…
  28. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 28
    Third Quarter 2014 Summary Three Months Three Months Ended Ended September 30, 2014 September 30, 2013 Recasted Reconciliation of distributable cash flow to net income: Net income 37,321 14,417 Depreciation and depletion 2,677…
  29. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 29
    YTD 2014 Summary Nine Months Nine Months Ended Ended September 30, 2014 September 30, 2013 Recasted Recasted Reconciliation of distributable cash flow to net income: Net income 85,646 40,531 Depreciation and depletion 6,581 4,259…
  30. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 30
    Production Costs per Ton Produced and Sold (1) Hi-Crush Partners LP (Wyeville & Augusta) Production Cost per Ton Fiscal Quarter 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Tons produced and delivered 382,607 557,457…
  31. COWEN AND COMPANY ENERGY CONFERENCE – Hi-Crush Partners Lp – slide 31
    Balance Sheet is Strong As of September 30, 2014: ( in 000s) Cash 20,625 1 150mm Revolver - 2 Term loan 197,118 Total debt 197,118 Net debt 176,493 3 Net debt / EBITDA 1.28x (1) Revolving credit facility: 143.8mm…

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