HCLP’s recent performance

Emerge Energy Services (EMES) and Hi-Crush Partners (HCLP) both reported strong 3Q17 results. Hi-Crush Partners sold 2.5 million tons of sand in the third quarter of 2017, representing 16% growth over the last quarter. Moreover, Hi-Crush Partners expects strong results in 4Q17 with an 8%–16% sequential growth in volumes.

Hi-Crush Partners’ and Emerge Energy’s Frac Sand Volume Growth

The above graph shows Hi-Crush Partners’ volumes sold over the last four years. As the graph shows, Hi-Crush Partners’ sand volumes sold have been on an uptrend since 3Q16. Volumes fell to a low of ~0.8 million tons in 2Q16. Also, the 3Q17 volumes are the highest quarterly volumes in HCLP’s history.

“The stabilization of market conditions, combined with strong demand for frac sand and logistics services has benefited our business,” said Laura Fulton, Hi-Crush CFO, in the company’s 3Q17 earnings release.

EMES expects high volume growth

Emerge Energy Services’ frac sand volumes rose 6% from 1,392,000 tons in 2Q17 to 1,480,000 tons in 3Q17. “As we look out to the rest of 2017 and into 2018, we believe that the business will continue to post strong results based on sustained high demand for frac sand and continued execution of our strategic initiatives,” said Ted W. Beneski, chairman of the general partner of Emerge Energy.

Strong volume growth contributed to strong DCF (distributable cash flows) growth for the two MLPs in 3Q17. Let’s analyze the DCF and capital expenditures trends for Emerge Energy Services and Hi-Crush Partners in the next part of this series.

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