2017 ANALYST & INVESTOR DAY PRESENTATION SEPTEMBER 2017
Introduction & Industry Evolution Bob Rasmus Chief Executive Officer Mine. Move. Manage.
Todays Speakers Bob Rasmus Laura Fulton Deke Williamson William Barker Chief Executive Officer Chief Financial Officer VP Production VP Strategy & Corporate Development Co-founded Hi-Crush Appointed CFO in 2012 Joined Hi-Crush in…
Todays Speakers (cont.) Joe Welsh Pam Butler John Turner Duane Scardino Mark Skolos VP Midstream & VP Human Director of Sales Corporate General Counsel PropStream Resources Development Manager Joined Hi-Crush in Joined Hi-Crush…
The Sand Industry A Look Back to 2012 Raw Frac Sand Demand 31.5 million TPY in 2021 Proppant Intensity 950 tons per well in 2021 Logistics Need Class-1 rail access (only) Source: Hi-Crush investor presentation dated…
The Evolution of Hi-Crush July 2012 June 2013 October 2016 December 2017 Augusta facility Acquired D&I First PropStream Expanding commences Silica, LLC crew commences PropStream operations operations service to 9 crews 2011 2012…
Our Strategy: Mine. Move. Manage. We sell sand Sounds simple MINE. EXCAVATE WASH DRY SORT RAILCAR MOVE. RAIL UNLOAD STORE TRUCK MANAGE. TRANSPORT WELL 8
Evolving and Increasing Complexity 9
Mining, Moving and Managing A LOT of Sand 1.4 tons of sand 1 cubic yard 200 5 0000000 or Liquid gallons Oil barrels 3 million tons 6 billion pounds 6,000 1x or 0000000 Boeing 747 Weight of Texas Airplanes Population1 HCLP…
MINE: Purpose-Built Operations Deke Williamson VP Production Mine. Move. Manage.
Hi-Crushs Production Portfolio Wyeville Blair Augusta Whitehall Kermit Capacity 1.85mm TPY 2.86mm TPY 2.86mm TPY 2.86mm TPY 3.00mm TPY Northern Northern Northern Northern Type In-basin White White White White Reserve Life1 41…
Wisconsin Northern White Facilities Our Wisconsin Plant Characteristics Low overburden deposits Large, contiguous reserve base High-quality frac sand reserves Augusta Up to 75% fine mesh reserves Blair Whitehall Wyeville…
Kermit West Texas Dunes Facility Our Kermit Mine Characteristics No overburden, wind-blown deposit Large, contiguous reserve base High-quality frac sand reserves 100% fine-mesh reserves Naturally disaggregated Kermit Benefits for…
Hi-Crushs Unique, Yet Consistent Mines KERMIT (1) WISCONSIN (4) High Low High Low Overburden Above ground, no vegetation Subsurface, low overburden Deep deposits with low overburden reduce mining costs Low High Low High…
Purpose-Built Operations Drives Efficiency Wet Plant Removes Impurities and Low Cost Surface Excavation Sand Moved from Mine to Plant Begins Sorting Process Silos Load Unit Trains at Onsite Rail Finished Product Facility Dry…
What Youll See Tomorrow at Kermit Reserves HWY 115 Silos Dry Plant WIP Pile Hatch Opening Stations Wet Plant Water Recycling Pond 17
MOVE: Supply Chain Development & Strategy William Barker VP Strategy & Corporate Development Mine. Move. Manage.
Developing a World Class Logistics Platform Our Logistics Platform Today Development Track Record 75% 12 Opportunistic Development Permian and Northeast Owned and operated Strategically invested in our proppant demand within 50…
Hi-Crushs Base Position on Class-1 Rail Network Wyeville Augusta Whitehall Blair Kermit Union Pacific Canadian National Truck Logistics Evolution Original two plants provided direct access to Union Pacific railway Union Pacific…
Intentional Connectivity Expansions via Growth Wyeville Augusta Whitehall Blair Kermit Union Pacific Canadian National Truck Logistics Evolution Original two plants provided direct access to Union Pacific railway Union Pacific…
A Differentiated Terminal Network Owned & Operated Advantage Hi-Crushs Northeast Terminal Network Lowers Operating Costs Avoids 3rd party transloading fees; Hi-Crush production base maintains utilization and fixed cost absorption…
Scale of Logistics Drives Need for Railcar Efficiency 100,000,000 500,000 Tons of frac sand per year Railcars per year Million tons of demand per year Thousand railcars per year 100 500 65 325 2014 2018 2014 2018 2018…
Terminal Scalability Enhances Logistics Flexibility Scalable Terminal Network Bakken Combines unit train capabilities and silo storage capacity to Marcellus / enhance the flexibility of Utica Hi-Crushs owned and operated…
Logistics Flexibility is Not a Given Wyeville Augusta Whitehall Blair Kermit Union Pacific Canadian National Truck Logistics Execution Optimizing origin and destination pairings to ensure route efficiency and reduce transit…
What Youll See Tomorrow at Pecos Ladder Track County Road 414 (Direct access to I-20) Silos Loop Track Land provides significant acreage for future development 26
MANAGE: Solving the Last-Mile Joe Welsh VP Midstream and PropStream Mine. Move. Manage.
In-Basin Activity Requires Massive Trucking Fleet 100,000,000 4,440,000 Tons of frac sand per year Truck loads per year Million tons of demand per year Million truck loads per year 100 4.4 65 2.9 2014 2018 2014 2018 2018…
Hi-Crush Logistics in the Permian Our Advantage Hi-Crushs Permian Service Footprint Hi-Crush owned and operated terminal network and Kermit facility are within 50-miles of more than 80%1 of Permian proppant consumption, reducing…
PropStream: Our Last-Mile Service Differentiated Last-Mile Capabilities Fully-integrated delivery solution provides proppant logistics services to the blender Fully-integrated delivery solution provides proppant Fully enclosed…
PropStream Reduces Environmental Impact Pneumatic Delivery PropStream Service vs. 0000000 Dramatically reduces silica dust compared to pneumatic delivery and other techniques Significant noise reduction relative to other…
Differentiated Container Solution PropStream Container Transportation Details Scale & Capacity Designed to maximize Two containers per truck 8 x 8 x 8 with capacity of amount of proppant per load with a total capacity of 16.5 tons…
Proprietary Well Site Frac Sand Conveyor PropBeast Conveyor Fully enclosed system Provides continuous proppant on demand via remote controlled panel Reduces oilfield waste by providing instant blender level control Control…
PropStream Efficiency Advantages Wellsite Footprint Comparison PropStream Advantage Existing Footprint PropStream Footprint Minimized wellsite congestion as trucks are on and off the wellsite in less than five minutes Mover / King…
Human Capital: Do Basic Better Pam Butler VP Human Resources Mine. Move. Manage.
Adding Talent to Meet Growing Demand December 2012 August 2017 December 2017E MINE. 84 293 308 MOVE. - 102 116 MANAGE. - 95 118 Corporate G&A 14 61 64 Total 98 551 606 Since initiating operations in 2012 with only mine and…
Developing and Maintaining Our Rich Culture We will be the premier provider of proppant and logistics solutions to the North American energy industry Vision We will deliver the most cost effective product and provide unrivaled…
Customer Strategy & Update John Turner Director of Sales Mine. Move. Manage.
Evolving Customer Preferences 2012 2017 Raw frac sand majority of Raw frac sand is 97% of Proppant demand, but significant share demand; preferred proppant for Type from ceramics and resin coated majority of completions designs…
Leads to Evolving Customer Mix 2012 2017 Four large pressure pumper Diversified base of 30+ customers Customer customers accounted for nearly (pressure pumpers and operators) Type all revenues across all major U.S. basins…
And Evolving Contract Structure and Strategy 2012 2017 Northern White In-Basin Sand Targeting contract Targeting contract Targeted contract coverage Contract coverage for 80% coverage for 90% for 90% of production Coverage or more…
Hi-Crush Customer Value Proposition We provide our customers with the high-quality, cost-effective proppant and logistics services they require, when and where they need them MINE. MOVE. MANAGE. 13.4mm TPY annual Largest owned and…
Industry Fundamentals Outlook Duane Scardino Corporate Development Manager Mine. Move. Manage.
Supportive and Resilient Fundamentals Old Model New Model Total U.S. Rig Count 2,000 rigs 900 rigs Days to Drill per Well 27 days 18 days Wells Drilled per Year per Rig 13 wells 20 wells Total Wells Drilled per Year 26,000…
Mesh Size & Basin Trends Estimated Mesh Splits by Basin Shift to fine mesh is pulling more supply to market to satisfy demand Average Current supply curve indicates 90% capacity utilization across all mesh sizes Marcellus & Utica in…
In-Basin Capacity Additions 2018 Permian In-Basin Capacity Permit filings and company announcements suggest 55-60mm TPY 55-60mm TPY of Permian in-basin nameplate capacity additions We believe significantly less effective capacity…
In-Basin Impact on Northern White: Sand is a Service Hi-Crush protected by MINE. MOVE. MANAGE. strategy Total U.S. Proppant Permian Effective Demand by Basin Supply Other Rockies 2016 Future Bakken Regional Brown SCOOP &…
Legal & Environmental Update Mark Skolos General Counsel Mine. Move. Manage.
Dunes Sagebrush Lizard Habitat Dunes Sagebrush Lizard Habitat in Texas1 Shinnery Oak Quercus havardii (Shinnery Oak) deciduous, low-growing, thicket-forming shrub Small portion of the overall shinnery oak community found within…
Hi-Crush and the Dunes Sagebrush Lizard The Hi-Crush Kermit Site and the DSL The development of the Kermit site does not pose a threat to the DSL or to DSL habitat Extensive diligence using the best available science has…
Financial Update & Outlook Laura Fulton Chief Financial Officer Mine. Move. Manage.
Why Invest in Sand Strong fundamental drivers unchanged despite volatile market valuations1 Greater frac sand intensity 10,000 8,000 MM 6,000 4,000 2,000 0 Targeting of shale Company IPO date 1 Source:…
Why Invest in HCLP Differentiated industry Purpose-built solutions Delivering cost-effective position to capitalize on that are not easily sand supply while positive industry replicable by industry providing value-added…
Financial Benefits of Mine. Move. Manage. MINE. Efficient production facilities with scale and logistics advantages are more cost effective Large, purpose-built frac sand production facilities leverage fixed cost structure Co-located…
Strong Financial Outlook Using Modest Assumptions Northern Northern White White Contribution Contribution Margin Matrix Margin Kermit: 105mm ------------- Northern White Contribution Margin per Ton ---------- mm 5.0 10.0 15.0…
Capital Allocation Priorities Return Options Cash distribution Unit buyback Return Repayment Growth Return Growth Coverage Interest Maintenance Adjusted EBITDA Maintenance Capex Debt Service Distribution Coverage…
Our Competitive Advantage Factor Our Position The Hi-Crush Advantage Size and Five facilities, 13.4mm Premier supplier with operational flexibility and Scale tons of annual capacity ability to meet dynamic customer needs Leading…
A Reminder of What Youll See Tomorrow Kermit Plant MINE. First in-basin, purpose-built frac sand mine; 3mm TPY capacity; 105mm tons of reserves with no overburden Pecos Terminal MOVE. First unit train capable terminal with…
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