Hi-Crush Partners LP and ARB Midstream, LLC Partner to Develop State-of-the-Art Energy Rail Hubs in the Permian and DJ Basins
Houston, Texas & Denver, Colorado - May 6, 2015 - Hi-Crush Partners LP ("Hi-Crush") and ARB Midstream, LLC ("ARB") announced today that the companies have entered into definitive agreements to jointly develop and operate two energy rail hubs, one in the DJ Basin and one in the Permian Basin. Both facilities will be served by the Union Pacific Railroad, and will provide unit and manifest train capabilities for proppant (frac sand) and crude oil. Hi-Crush will operate the frac sand terminals at these facilities, with the frac sand sourced from its production facilities in Wisconsin, and ARB will operate the crude-by-rail terminals.
"By establishing a presence in the DJ Basin and significantly expanding our presence in the Permian Basin, we are excited to further expand our extensive distribution network to better serve our customers' in-basin needs," said Robert E. Rasmus, co-Chief Executive Officer of Hi-Crush. "We remain focused on delivering a low-cost solution to our customers and look forward to a successful partnership with ARB."
"ARB is excited to partner with Hi-Crush on these projects," said Adam Bedard, Chief Executive Officer of ARB. "Entering a long-term relationship with one of the leading providers of frac sand is complementary to our vision of growth providing integrated terminals to the oil and gas industry in North America."
Hi-Crush and ARB are jointly developing Nicon, a 225-acre site in Weld County, Colorado in the heart of the DJ Basin. The frac sand infrastructure will include silo storage capacity, allowing Hi-Crush to accommodate unit trains. The crude oil infrastructure will accommodate multiple grades of crude oil and have initial storage capacity of 200,000 barrels, expandable to over 400,000 barrels. Rail-loading capacity will be approximately 79,000 barrels per day of crude oil, with initial truck unload capacity of 35,000 barrels per day. Hi-Crush and ARB expect the Nicon facility to be commercially operational in the fourth quarter of 2015.
The Permian Gateway energy rail hub is proposed on 300 acres in Howard County near Big Spring, TX. ARB has entered into a definitive agreement to purchase the acreage with the closing expected to occur in May, subject to customary closing conditions. The frac sand infrastructure will include silo storage capacity, allowing Hi-Crush to accommodate unit trains. Hi-Crush and ARB expect the Permian Gateway energy rail hub to be commercially operational by early 2016.
"There is a lack of terminal capacity for proppant and crude oil in the Big Spring region," said Adam Bedard. "Our terminal will provide the critical infrastructure to serve our customers' in-basin needs, with the crude oil terminal being pipe connected to a large, regional gathering system."
About Hi-Crush Partners LP
Hi-Crush Partners LP, a publicly traded partnership (NYSE: HCLP), is an integrated producer, transporter, marketer and distributor of high-quality monocrystalline sand, a specialized mineral that is used as a "proppant" (frac sand) to enhance the recovery rates of hydrocarbons from oil and natural gas wells. Hi-Crush Partners LP's reserves, which are located in Wyeville, Wisconsin and Augusta, Wisconsin, consist of "Northern White" sand, a resource that exists predominately in Wisconsin and limited portions of the upper Midwest region of the United States. Hi-Crush Partners owns and operates the largest distribution network in the Marcellus and Utica shales, and has distribution capabilities throughout North America. For more information, visit www.hicrushpartners.com.
About ARB Midstream, LLC
ARB Midstream, LLC, based in Denver, CO, is a privately held midstream energy company that provides logistics and infrastructure solutions for the North American energy markets. Focused on constructing, developing, and optimizing crude oil related assets, ARB Midstream utilizes a deep understanding of North American oil markets through in-depth fundamental analysis to identify early stage opportunities and the value propositions to a rapidly evolving crude oil market. ARB Midstream, LLC's private equity investor is BV Natural Resources, LLC, a subsidiary of Ball Ventures, LLC. For more information about ARB Midstream, please visit our website at www.arbmidstream.com.
Some of the information in this news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements give our current expectations, and contain projections of results of operations or of financial condition, or forecasts of future events. Words such as "may," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "plan," "estimate," "anticipate," "could," "believe," "project," "budget," "potential," or "continue," and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Hi-Crush Partner's reports filed with the Securities and Exchange Commission ("SEC"), including those described under 1A of Hi-Crush Partner's Form 10-K for the year ended December 31, 2014 and any subsequently filed 10-Q. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the risk factors in our reports filed with the SEC or the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include: the volume of frac sand we are able to sell; the price at which we are able to sell frac sand; the outcome of any pending litigation; changes in the price and availability of natural gas or electricity; changes in prevailing economic conditions; and difficulty collecting receivables. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. Hi-Crush Partner's forward-looking statements speak only as of the date made and Hi-Crush Partners undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Hi-Crush investor and media contact:
ARB investor and media contact:
Adam Bedard, CEO
(720) 600-7500 ext 102