HCLP

[dan_s]

Seem weird to me how HCLP and the other MLPs flop around in lock step with oil prices. There is not a single well that was cancelled today because WTI pulled back from $65 to $64. Upstream companies do not change their D&C programs from day-to-day.

All of the midstream MLPs are in great shape and few if any will have a significant impact as a result of the recent FERC ruling.

Frac crews are in high demand and so is the demand for Hi-Crush sand. They are going to report outstanding Q1 results and they are going to raise their quarterly distribution by AT LEAST 10%.

Hi-Crush is the low cost frac sand producer and they have the best delivery system. Distributions should be going up by 10% or more each quarter for at least the next eight quarters.

[ddlopata084]

Dan - every time I see these swing dips in HCLP I just figure that’s another great day for HCLP’s broker, buying back those shares at a better price, making it more accretive in the long run, freeing up more of the DCF to be paid to the remaining shares... we should have a little epg contest to guess how many shares they announce they bought back in the next Q release. I’m guessing >2M, so I’ll lay my guess at 2.3M shares...

[dan_s]

I agree and I hope they are buying back a lot of units because the unit price won't stay this low for long if they raise distributions by 10% each quarter for the next eight quarters, which I believe is their game plan.

[ddlopata084]

Dan - totally agree. When they announce disty increases, price will go up. They need to buy now...

[dan_s]

Note this morning (3/23) from TPH about frac sand demand:

Late 2017 / early 2018 completions disruptions will prove ephemeral as speedbumps in the road thin and US onshore well completions ramp Q2'18+, although some early Q2 pain may persist (rail issues, in-basin sand delays). These delays led to some slack in the frac (supply/demand) system as spot crews were suddenly in search of work at the same time as new hhp entered the market. Drilling activity has increased quite nicely to start 2018 (wells spud likely well > wells completed YTD) and we don't believe the wells are being spud for practice thus we expect completions to ramp during the remainder of the year and supply/demand to tighten Q2 and Q3 2018. We also note that our 2018 frac hhp addition estimates (reactivations and newbuilds) continue to move higher (from 4.6mm hhp to 5.1 mm hhp) based on our bottom-up, pumper-by-pumper deep dive.