If you missed it, the Wall Street Journal came out today with a centerpiece on fracking sand. This is great exposure to the space.
If you’ve been paying attention, I took a position in the partnership HCLP this summer for $24-26, with some adds and trading around the position since then. They sell exactly this sand to well services companies.
A few recent big developments with HCLP include a settlement with Baker Hughes and inclusive six year supply agreement that helped send it to the $32 price it’s at today. Other developments include an almost million share issuance from a parent/sibling company (non-dilutive).
The share price has come under downward pressure (from the million share issuance); however, this exposure is exactly what’s needed to get more money flowing into the position. The partnership is expensive and small, but I love the positioning and think it’s in exactly the right place for major growth over the next decade.
Another position similar to HCLP (and Chuck Bennett honorable mention) is SLCA. They specialize in a similar alternative to the fracking sand HCLP offers.Comments »