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Hi-Crush Partners’ Higher Frac Sand Volumes in 4Q16

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Higher 4Q16 volumes

Hi-Crush Partners (HCLP) reported its 4Q16 results on February 21, 2017. The company reported 4Q16 EBITDA (earnings before interest, tax, depreciation, and amortization) of $0.1 million. This is higher than the -$2.9 million reported in 3Q16 but lower than its EBITDA of $17.4 million in 4Q15.

HCLP’s frac sand volumes sold rose to 1.4 million tons in 4Q16 from 1.2 million tons in 4Q15. The frac sand volumes rose 25% from 1.1 million tons in 3Q16.

The above graph compares the frac sand volumes for HCLP, Emerge Energy Services (EMES), Fairmount Santrol Holdings (FMSA), U.S. Silica Holdings (SLCA), and Smart Sand (SND). EMES is scheduled to report its 4Q16 results on February 27, 2017.

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Improving dynamics

Robert E. Rasmus, Chief Executive Officer of Hi-Crush, stated: “In addition to an increase in volumes, our profitability continues to improve, as we achieved positive quarterly EBITDA for the first time since the fourth quarter of 2015.”

Rasmus added the following: “We have a significantly improved Hi-Crush platform—one with lower costs, greater efficiencies, and an expanded service offering, including our PropStream last-mile integrated logistics solution. This benefits us as proppant intensity increases continue, well completion activity picks up momentum and customer focus remains on surety of supply.”

Hi-Crush Partners is a pure play producer of monocrystalline sand—a specialized mineral used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells. As such, the demand for its product depends on the levels of active rigs.

Now let’s discuss how the levels of active rings have changed recently.

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