Hi-Crush Inc., together with its subsidiaries, operates as an integrated provider of proppant and logistics services for hydraulic fracturing operations.
The company offers frac sand production, wellsite storage systems, last mile services and software for real-time visibility and management across the entire supply chain. It offers a strategic suite of solutions to operators and service companies in all major U.S. oil and gas basins.
Assets and Operations
Production Facilities
The company o...
Hi-Crush Inc., together with its subsidiaries, operates as an integrated provider of proppant and logistics services for hydraulic fracturing operations.
The company offers frac sand production, wellsite storage systems, last mile services and software for real-time visibility and management across the entire supply chain. It offers a strategic suite of solutions to operators and service companies in all major U.S. oil and gas basins.
Assets and Operations
Production Facilities
The company owns six production facilities located in Wisconsin and Texas. Its four Wisconsin production facilities are equipped with on-site transportation infrastructure capable of accommodating unit trains connected to the Union Pacific Railroad mainline or the Canadian National Railway mainline. Its two Texas production facilities have on-site silo storage capacity and infrastructure capable of direct loading into trucks.
As of December 31, 2019, the company had an implied average reserve life of 24 years, assuming production capacity of 17,280,000 tons of frac sand per year.
Wyeville Facility: The Wyeville facility has an annual processing capacity of approximately 2,700,000 tons of frac sand per year. During the year ended December 31, 2019, the Wyeville facility produced and delivered 2,472,529 tons of frac sand.
Augusta Facility: The Augusta facility has an annual processing capacity of approximately 2,860,000 tons of frac sand per year. During the year ended December 31, 2019, the Augusta facility produced and delivered 56,121 tons of frac sand. The Augusta facility was idled in January 2019.
Whitehall Facility: The Whitehall facility has an annual processing capacity of approximately 2,860,000 tons of frac sand per year. During the year ended December 31, 2019, the Whitehall facility produced and delivered 594,128 tons of frac sand.
Blair Facility: The Blair facility has an annual processing capacity of approximately 2,860,000 tons of frac sand per year. During the year ended December 31, 2019, the Blair facility produced and delivered 2,025,313 tons of frac sand.
Kermit Facilities: The Kermit facilities have an annual processing capacity of approximately 6,000,000 tons of frac sand per year. During the year ended December 31, 2019, the Kermit facilities produced and delivered 4,519,452 tons of frac sand.
Terminal Facilities
As of December 31, 2019, the company owned or operated 11 terminal locations throughout Pennsylvania, Ohio, Texas, Colorado and New York, of which five are idled and seven are capable of accommodating unit trains. Its terminals include approximately 135,000 tons of rail storage capacity and approximately 140,000 tons of silo storage capacity.
The company’s terminals are strategically located to provide access to Class I railroads, which enables it to ship product from its production facilities in Wisconsin. As of December 31, 2019, the company leased or owned 4,800 railcars used to transport sand from origin to destination and managed a fleet of 596 additional railcars dedicated to its facilities by its customers or the Class I railroads.
Logistics and Wellsite Operations
The company’s logistics and wellsite operations, named Pronghorn Energy Services, utilize silo systems and/or containers, and maintain proppant quality control from the mine to the blender. It handles the full spectrum of logistics management with its fully-integrated solution, from railcar fleet management, truck dispatching and dedicated wellsite operations, which structurally reduces costs for customers by eliminating inefficiencies throughout the proppant delivery process.
As of December 31, 2019, the company owned or leased 50 PropBeast conveyors, leased 2,978 containers from Proppant Express Investments, LLC, owned 15 Atlas topfill conveyors and owned 35 silo systems, which consists of a 6-pack of silos, a conveyor for transporting sand from the silos to the blender hopper and trailers used to transport the silos.
Strategy
The key elements of the company’s strategy include providing frac sand as a service; focusing on long-term relationships with key customers; capitalizing on compelling industry fundamentals; building on its position as a low cost provider; and pursuing accretive acquisitions.
Customers
The company’s customer base includes major oil and natural gas exploration and production companies and pressure pumping service providers. For the year ended December 31, 2019, sales to Chevron USA Inc.; Chesapeake Operating, LLC; and Anadarko Petroleum Corporation each accounted for approximately 10% of its total revenues.
Regulations
The company’s frac sand mining operations are subject to the oversight of the U.S. Mine Safety and Health Administration (MSHA), which is the primary regulatory agency with jurisdiction over the commercial silica industry.
The company is also subject to the requirements of the federal Occupational Safety and Health Act and comparable state statutes that regulate the protection of the health and safety of workers with federal oversight provided primarily by the U.S. Occupational Safety and Health Administration (OSHA). Its safety program is designed to ensure compliance with MSHA and OSHA regulations.
The company is also subject to the requirements of the federal Resource Conservation and Recovery Act and comparable state statutes that regulate the generation, transportation, treatment, storage, disposal and clean-up of hazardous and non-hazardous wastes.
Competition
The company’s main public and private competitors, including logistics only providers, include Atlas Sand Company, LLC; Black Mountain Sand Holdings, LLC; Covia Holdings Corporation; Smart Sand, Inc.; Solaris Oilfield Infrastructure, Inc.; Total Sand Solutions; U.S. Silica Holdings, Inc.; and Vista Proppants and Logistics, LLC.
Acquisitions
In May 2019, the company completed the acquisition of Proppant Logistics LLC, which owns Pronghorn Logistics, LLC, a provider of proppant logistics services.
In January 2019, the company completed the acquisition of BulkTracer Holdings LLC, the owner of a logistics software system, PropDispatch.
History
The company was founded in 2012. It was incorporated in 2012. The company was formerly known as Hi-Crush Partners LP and changed its name to Hi-Crush Inc. in June 2019.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
