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MLP Top Gainers: Hi-Crush Partners Led the Rally Last Week

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Hi-Crush Partners

Hi-Crush Partners (HCLP), a frac sand producer, was the top MLP gainer last week, which ended on July 27. It saw a massive 40.6% rally, driven by some positive announcements, including the acquisition of FB Industries, a new agreement with an E&P (exploration and production) customer, and a distribution increase. Let’s look briefly at each of these positive updates, starting with the acquisition announcement.

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H-Crush announced the acquisition of FB Industries, a company involved in frac sand storage and handling. The transaction is valued at $60 million. The acquisition is expected to augment the partnership’s PropStream platform. According to the related press release, “The acquisition of FB Industries enhances Hi-Crush’s capabilities in the last mile transportation and management of frac sand, and furthers the company’s position as a leader in North American proppant logistics.”

The partnership also announced the amendment of a supply agreement with one of its major E&P customers operating in the Permian region. The new supply agreement is expected to require capacity expansion. That includes expansion of the Wyeville facility, construction of a second Kermit (or Kermit 2) facility, and the expansion of its PropStream services. The Wyeville expansion and the Kermit 2 facility are expected to add 850,000 tons and 3 million tons capacity, respectively, per year. As a result, HCLP announced an increase in its total capital expenditure to $180 million–$210 million compared to the previous guidance of $35 million–$45 million.

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HCLP also announced its distribution for the second quarter of 2018. It declared a distribution of $0.75 per unit, which represents a massive 233% increase compared to the previous quarter. The huge distribution increase is in line with the company’s capital return program announced in the fourth quarter of 2017.

Hess Midstream Partners

Hess Midstream Partners (HESM), a midstream MLP owned by Hess (HES) and Global Infrastructure Partners, was the second-highest MLP gainer last week, ending 5.5% higher. HESM, which has a strong presence in the Bakken region, has been among the top MLP gainers for two weeks. Year-to-date, it has risen 10.4%.

Other MLP best performers

Consol Coal Resources (CCR), Global Partners (GLP), Viper Energy Partners (VNOM), Emerge Energy Services (EMES), MPLX (MPLX), Summit Midstream Partners (SMLP), and Noble Midstream Partners (NBLX) were among the top ten MLP gainers last week.

In the next part, we’ll look at last week’s lowest-performing MLPs.

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