HI-CRUSH PARTNERS LP (HCLP) IPO

 
Wisconsin and limited portions of the upper Midwest region of the United 
States, which is highly valued as a preferred proppant because it exceeds all 
American Petroleum Institute (“API”) specifications. We own, operate and 
develop sand reserves and related excavation and processing facilities and 
will seek to acquire or develop additional facilities. Our 561-acre facility 
with integrated rail infrastructure, located near Wyeville, Wisconsin, enables 
us to process and cost-effectively deliver approximately 1,600,000 tons of 
frac sand per year. Substantially all of our frac sand production is sold to 
leading investment grade-rated pressure pumping service providers under 
long-term, take-or-pay contracts that require our customers to pay a specified 
price for a specified volume of frac sand each month. 

Over the past decade, exploration and production companies have increasingly 
focused on exploiting the vast hydrocarbon reserves contained in North 
America’s unconventional oil and natural gas reservoirs through advanced 
techniques, such as horizontal drilling and hydraulic fracturing. In recent 
years, this focus has resulted in exploration and production companies 
drilling more and longer horizontal wells, completing more hydraulic 
fracturing stages per well and utilizing more proppant per stage in an attempt 
to efficiently maximize the volume of hydrocarbon recoveries per wellbore. 
As a result, North American demand for proppant has increased rapidly, growing 
at an average annual rate of 28.0% from 2006 to 2011, with total annual sales 
of $3.7 billion in 2011, according to The Freedonia Group, a leading 
international business research company. We believe that the market for raw 
frac sand will continue to grow based on the expected long-term development 
of North America’s unconventional oil and natural gas reservoirs. 

We intend to utilize the significant oil and natural gas industry experience 
of our management team to take advantage of what we believe are favorable, 
long-term market dynamics as we execute our growth strategy, which includes 
both the acquisition of additional frac sand reserves and the development of 
new excavation and processing facilities. We expect to have the opportunity 
to acquire significant additional acreage and reserves currently owned or 
under an agreement to be acquired by our sponsor, Hi-Crush Proppants LLC, 
including approximately 1,700 acres of additional land and associated reserves 
in western Wisconsin to which we have a right of first offer, in addition to 
potential acquisitions from third parties. Our sponsor will not, however, be 
required to accept any offer we make, and may, following good faith 
negotiations with us, sell the assets subject to our right of first offer to 
third parties that may compete with us. Our sponsor may also elect to develop, 
retain and operate properties in competition with us or develop new assets 
that are not subject to our right of first offer. 

We intend to remain solely focused on the frac sand market as we believe it 
offers attractive long-term growth fundamentals.

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We are a Delaware limited partnership formed in May 2012. Our principal 
executive offices are located at Three Riverway, Suite 1550, Houston, Texas 
77056, and our telephone number is (713) 963-0099. Our website address will be 
www.hicrushpartners.com.