Hi-Crush is aggressively moving to become the #1 company for wellsite management of frac sand. This is a very profitable niche. Plus, upstream companies need to use it to meet OSHA requirements to reduce dust.
Slide presentation: https://cdn2.hubspot.net/hubfs/4010401/ ... 1693183479
HOUSTON, Nov. 12, 2018 (GLOBE NEWSWIRE) -- Hi-Crush Partners LP (HCLP), or "Hi-Crush", today announced that it has entered into a new, long-term frac sand supply agreement for the in-basin purchase of Northern White frac sand to support Chesapeake Energy Corporation (“Chesapeake”) and their completions program in the Marcellus and Powder River Basins. In addition, Chesapeake will utilize one PropStream® container crew and related logistics with the option to expand based on demand.
“We are excited to reach an agreement to provide services to meet Chesapeake’s demand for Northern White frac sand and associated proppant logistics needs,” said Robert E. Rasmus, Chairman and Chief Executive Officer of Hi-Crush. “We believe this agreement affirms the value of our Mine. Move. Manage. operating strategy, as well as the ongoing demand for Northern White frac sand, the strength of our logistics network and our success in increasingly partnering with producer customers.”
Hi-Crush for High Yield + Growth
Hi-Crush for High Yield + Growth
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hi-Crush for High Yield + Growth
Dan,
I recently had someone ask me to do some research on Schlumberger. I didn't have time to do a full analysis, but noticed they've been moving into pressure pumping and frac sand business as part of their full-service offering. See article below:
https://www.slb.com/resources/publicati ... estim.aspx
I also learned that Halliburton may not have a similar offering. Seems like a Hi-Crush acquisition would be a nice way to stay competitive with SLB offering? Thoughts?
I recently had someone ask me to do some research on Schlumberger. I didn't have time to do a full analysis, but noticed they've been moving into pressure pumping and frac sand business as part of their full-service offering. See article below:
https://www.slb.com/resources/publicati ... estim.aspx
I also learned that Halliburton may not have a similar offering. Seems like a Hi-Crush acquisition would be a nice way to stay competitive with SLB offering? Thoughts?
Re: Hi-Crush for High Yield + Growth
New Mexico, Oklahoma lead big rig count spike . Houston Chronicle .
The number of active drilling rigs jumped in the U.S. increasing by 14 from last week, courtesy of New Mexico and Oklahoma each gaining four net rigs. Pennsylvania, Colorado and the offshore waters of Louisiana all saw increases of multiple rigs as well. Texas lost one net rig because South Texas' Eagle Ford Shale declined by three active rigs. The U.S. is up to 1,081 active rigs with nearly half of them -- 532 rigs -- operating in Texas, according to weekly data collected by Baker Hughes, a GE company. Of the total, 886 of the rigs are drilling for oil with the remained seeking natural gas. The booming Permian Basin in West Texas and New Mexico counts 492 rigs, which is more than 55 percent of all the nation's oil rigs. Because of pipeline shortages in West Texas, many companies are continuing to drill Permian wells while leaving more of them uncompleted for the time being until new pipelines come online.
Just remember that all of these new wells will be completed with a whole lot of sand. They are not drilling expensive horizontal wells for the fun of it.
The number of active drilling rigs jumped in the U.S. increasing by 14 from last week, courtesy of New Mexico and Oklahoma each gaining four net rigs. Pennsylvania, Colorado and the offshore waters of Louisiana all saw increases of multiple rigs as well. Texas lost one net rig because South Texas' Eagle Ford Shale declined by three active rigs. The U.S. is up to 1,081 active rigs with nearly half of them -- 532 rigs -- operating in Texas, according to weekly data collected by Baker Hughes, a GE company. Of the total, 886 of the rigs are drilling for oil with the remained seeking natural gas. The booming Permian Basin in West Texas and New Mexico counts 492 rigs, which is more than 55 percent of all the nation's oil rigs. Because of pipeline shortages in West Texas, many companies are continuing to drill Permian wells while leaving more of them uncompleted for the time being until new pipelines come online.
Just remember that all of these new wells will be completed with a whole lot of sand. They are not drilling expensive horizontal wells for the fun of it.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hi-Crush for High Yield + Growth
Dave;
I don't think Hi-Crush is going to get into the pressure pumping business. The equipment is very expensive with high maintenance costs. Plus, you have to deal with a lot more crews.
Hi-Crush's 3M strategy is designed to deliver high quality sand at a competitive price to the pressure pumping companies, including managing the sand at the well site. Hi-Crush now sells a lot of their sand directly to the E&P companies. By sourcing their own sand, the upstream company can avoid the HAL and SLB mark-ups.
I don't think Hi-Crush is going to get into the pressure pumping business. The equipment is very expensive with high maintenance costs. Plus, you have to deal with a lot more crews.
Hi-Crush's 3M strategy is designed to deliver high quality sand at a competitive price to the pressure pumping companies, including managing the sand at the well site. Hi-Crush now sells a lot of their sand directly to the E&P companies. By sourcing their own sand, the upstream company can avoid the HAL and SLB mark-ups.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
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ddlopata084
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Re: Hi-Crush for High Yield + Growth
Dan
Per DaveN, do you believe that the bigger services companies could be looking to buy sand companies to return the sand services to their plate of offerings? Seems to me, the big-boy service companies could buy sand companies on the cheap right now, in bulk, get the supply situation for sand under control by bringing serious sand volumes under their control, and apply their desired markup. This would put HCLP in play for acquisition.
The Spears Brothers have been talking about this concept on their podcast for months - service companies needing to return to selling sand as part of their services. Given their connection into what seems like most of the drilling services companies in the industry, my take is they don’t come up with these ideas by accident, but more reflect the pulse of what they’re hearing...
Per DaveN, do you believe that the bigger services companies could be looking to buy sand companies to return the sand services to their plate of offerings? Seems to me, the big-boy service companies could buy sand companies on the cheap right now, in bulk, get the supply situation for sand under control by bringing serious sand volumes under their control, and apply their desired markup. This would put HCLP in play for acquisition.
The Spears Brothers have been talking about this concept on their podcast for months - service companies needing to return to selling sand as part of their services. Given their connection into what seems like most of the drilling services companies in the industry, my take is they don’t come up with these ideas by accident, but more reflect the pulse of what they’re hearing...
Re: Hi-Crush for High Yield + Growth
Anything is possible, but I doubt that SLB and HAL want to own mining companies. Just like they don't want to own E&P companies.
I hope Hi-Crush doesn't sell because I think 2019 is going to be a "kick ass" year for the company.
I hope Hi-Crush doesn't sell because I think 2019 is going to be a "kick ass" year for the company.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group