COWEN AND COMPANY 4TH ANNUAL ULTIMATE ENERGY CONFERENCE DECEMBER 2014
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…
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…
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…
Industry Backdrop
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…
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…
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…
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:…
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…
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)…
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…
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…
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…
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…
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…
Levers for Further Performance 19
Hi-Crush Operations
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…
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…
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…
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…
Appendix
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…
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…
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…
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…
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…
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…
Loading...
