HCLP just amended another supply agreement to jack up the amount of sand one of their customers is obligated to buy every month. This is the third one this year.

Per MarketWatch:

Houston, Texas – April 8, 2014 – Hi-Crush Partners LP (NYSE: HCLP), or Hi-Crush, today announced the entry into of an amendment to the supply agreement between Hi-Crush Operating LLC, a subsidiary of Hi-Crush, and FTS International, LLC, or FTSI, a leading provider of well completion services. The amendment significantly increases the number of committed volumes under the agreement, extends the term of the supply agreement and requires FTSI to pay a specified price for a specified minimum volume of frac sand each month. “Hi-Crush is excited to further extend and strengthen our relationship with FTSI by entering into this amendment,” said James M. Whipkey, Co-Chief Executive Officer of Hi-Crush. “We consider FTSI a valuable partner as we continue to expand our market presence, and fulfilling our customers’ needs is a top priority for Hi-Crush.”

And when they say “requires FTSI to pay a specified price for a specified minimum volume of frac sand each month.”…question? Do you suppose that would mean a higher “specified price”?

I would suppose it would.

This follows the news yesterday that HCLP was going to have themselves an offering to completely buy out any competing interests in their Augusta facility.

Read here:

Houston, Texas – April 8, 2014 – Hi-Crush Partners LP HCLP +2.31% (“Hi-Crush” or the “Partnership”) announced today that it has entered into a contribution agreement with Hi-Crush Proppants LLC (the “Sponsor”) to acquire certain equity interests in Hi-Crush Augusta LLC (“Augusta”), the entity that owns the Sponsor’s raw frac sand processing facility located in Augusta, Wisconsin. As previously announced, Hi-Crush acquired a preferred interest in Augusta on January 31, 2013.

“We are delighted to announce this acquisition, which we expect to be immediately accretive,” said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. “With this transaction, we will double the Partnership’s production capacity to 3.2 million tons per year. The Augusta plant has a current capacity of 1.6 million tons of coarse Northern White frac sand per year. Beyond that, we have the capability to expand the Augusta plant by an additional 800,000 tons per year and have started the process to obtain the permits required for this expansion. The expansion will bring total rated capacity at the Partnership to 4 million tons per year. We expect the expanded capacity to come on-line in the second half of 2014.”

Under the terms of the transaction, the Partnership will pay cash consideration of $224.25 million. At the closing of the acquisition, the Partnership’s preferred equity interest in Augusta (currently providing $3.75 million in distributions per quarter) will be converted into common equity interests in Augusta, and the Partnership will own 98% of Augusta’s common equity interests. “We expect that the acquisition of common equity interests in Augusta will contribute more than $30 million of incremental annual EBITDA to the Partnership, before any expansion to the Augusta plant,” said Mr. Rasmus. The acquisition is expected to close by mid-May 2014, subject to regulatory approvals and other closing conditions. In connection with the acquisition, Hi-Crush expects to refinance its existing revolving credit facility.

We need to follow the sand. Where the sand goes, the profits will go also. No buyouts – if these guys enter into a cash offer for my units on my behalf, I’m going to blow a gasket.

These moves are going to double HCLP’s revenue immediately. That will play into the hand of existing investors as bigger operations allow the executives of HCLP to leverage their logistics operations and gain market share.

I’m not even going to look to see if HCLP is paying top dollar premium on this deal – I’ll spare you the time, the answer is “I don’t care.”

This trend in the economy is only growing. These guys survived Aubrey McClendon blowing up the natural gas sector, and together with targeted well services like BAS, they’re going to dominate.

The shares aren’t even phased at the announced dilution yesterday to pay for the acquisition. Have a look.

Here’s the tagline:

HCLP – This Shit Is Going Higher

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HCLP announced another 3 year supply agreement after the close yesterday; this time with US Well Services. Like the other, this agreement locks in US Well Services to purchase a minimum amount of frac sand from HCLP each month.

Per the CEO of HCLP:

“We believe that U.S. Well`s commitment underscores the strength of our extensive logistics network of rail-served terminals in the northeast,” said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. “Certainty of supply is critical in today`s market. Our customers need to have access to high-quality frac sand, when and where they need it, and Hi-Crush provides this certainty.”

I spoke with a gentleman in the comments section of another post on this subject just the very day – he had asked why I don’t love SLCA.

Both HCLP and SLCA are laudable enterprises worthy of a look (and probably a buy). But HCLP’s strategy resonates with me. Their insistence on building their business with logistics in mind – as much as supply deposits – is a distinguishing strength which I respond to.

HCLP is up more than 3% today on the news. This is exactly the kind of activity that will lead HCLP to continue to grow revenues at 100% annually. It’s difficult to put a price on this sort of activity – I’m a believer and think a business like HCLP is still advantageously priced for this growth as opposed to, say, a TSLA.

But I’m also sitting on a mid to high- $20’s cost basis, so take that for what it’s worth.

Next stop, $50.00.

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I’ve been a busy, busy bee this week, and will be offering you no apologies for my absence. To the contrary, you’re welcome that I’m bothering to throw you table scraps at all right now. For my time is precious.

Here’s the big takeaway; I still have a slightly oversized cash position, but don’t really seem to be hurting at all from it.

BAS is up 16.40% right now at the time of this writing. This lift is being driven by guidance from the company suggesting that natural gas drilling budgets are coming back strong. BAS was very undervalued when I started buying around $12 and I made that very clear – the firm was poised for outperformance. There ability to generate cash guaranteed them a winner.

Now we’re just collecting my winnings. My position is up 95% from initial entry, and my total realized and unrealized gains together stand well over 100% from trading activities. I have a full sized position of about 10% my net worth in BAS, and accordingly am free not to care that I am sitting on so much cash. It doesn’t matter.

I am not selling my BAS shares. As the natural gas sector thaws, BAS will be the recipient of an immense payoff.

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Look this is quite straightforward. This partnership is trading at a paltry 14X income and just tripled in size inside of one year.

And a cursory glance immediately revealed another 15% growth just sitting in the pipeline; unaccounted for as of yet. As in, without trying – whammy – have another 15% growth guy.

“Why yes, I believe I will, thank you.”

Just having this trade like the high growth play it is, for 20X income or more, sends it to $50. Add in the 15% growth I’m seeing (and will detail later) and you’re at $59. And that’s before the company even does anything.

This thing is easily going above $60 for a partnership unit. That’s 66% higher from where it’s at right now.

My cash positions rests above 30%.

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Here’s the brief take away from AEC’s earnings report.

The company still beat expectations across all lines, despite taking most of 2013 and a good part of 2012 off (they were scared of being short of cash and rebalanced). The stock dilutions did mildly impair performance per share, yet the stock is right where it started and year over year FFO still grew value. Besides, the company has hardly tried to drive ahead yet.

Towards the end of 2013, the company suddenly roared to life, acquiring three new properties and creating a joint venture with AIG Global Real Estate to develop the San Francisco market. The San Francisco note should be especially depressing to the string of analysts who have continually gone on the record that there is no way AEC makes it on the West Coast.

They are going to make it, you schmucks, and your reputation goes down in tatters.

Somewhere at Citi, Michael Bilerman is cowering in fear. His ‘doomshittery’ (trademark) leveled at Associated Estates Realty has crashed against the walls and come away with nothing. His obnoxious “questions” (most dubiously labeled) now ring hollow and foolish.

Shortly, Jeffrey I. Friedman, President, CEO and Hero (in the Greek sense) will emerge from behind his walls, give these serpents battle, and put whatever survives of their forces to flight, like the cheap cowards they are; as his last act of leadership.

But Michael Bilerman can be sure he will be struck down; not of the latter sort privileged to flee. He will get no respite to run, as Friedman has marked him for his asinine chicanery during certain quarterly performance calls.

Upon which Jeffrey I. Friedman will ride off into the sunset, going down as a man of legend amongst AEC shareholders.

In the meantime, dividends are up 7% from last year and I am bidding my time.

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My NRP coal partnership got blasted to the tune of 17% after announcing the coal market continued to weaken in 2013, against their expectation. In response to the weak sales of power production and metallurgical coal, NRP’s board announced a 36% reduction in distributions.

This hurts, as I guessed that $20 would average the low mark in the name. Clearly, I was wrong.

I am not selling NRP, though (not yet, at least). My primary reason for buying into NRP was more predicated on coal being a very inexpensive sector to get exposure to and the medium term unlikelihood that the US or global economies will be able to pivot away from coal quickly.

I’ll ride this out for a little bit and see where it goes. There’s been long speculation that NRP may have to cut its distribution, because their debt level is high and their board has ambitious goals to diversify their royalty stream into a variety of commodities, such as raw materials for glass or gas and oil.

The board has reaffirmed they don’t think the partnership is at risk of violating bond covenants, and I think the five year forecast distribution is more likely to contain upside surprises.

NRP is sinking me ~1.5%, which is actually being generously offset by gains elsewhere. NRP was a smaller position than, say, CCJ or BAS. For the day, I am down just ~.5% so far. But we’ll see if NRP doesn’t bleed out hard into the close

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