Hi-Crush Partners LP reported fourth quarter and full-year 2015 results. The limited partners' interest in net income was $11.2 million for the fourth quarter of 2015, resulting in basic and diluted earnings of $0.30 per limited partner unit.
In the fourth quarter of 2015, the Partnership received a settlement payment of $22.5 million for past and future obligations under a customer contract. The settlement payment is non-recurring income and $10.2 million was recognized as other revenue related to make-whole payments and the remainder as other operating income.
Revenues for the quarter ended Dec. 31, 2015, totaled $72.1 million, including other revenues and payments of make-whole penalties, on sales of 1.2 million tons of frac sand. This compares to $81.5 million of revenues on sales of 1.4 million tons of frac sand in the third quarter of 2015.
Approximately 52 percent of the volumes were sold in-basin for the fourth quarter of 2015, an increase from 49 percent in the third quarter of 2015. Average sales price-per-ton-sold decreased to $52 per ton in the fourth quarter of 2015 from $57 per ton in the third quarter of 2015 and $67 per ton in the second quarter of 2015, reflecting continued pricing pressure as a result of the general slowdown in market activity, particularly for well completions.
Of the 1.2 million tons of frac sand sold during the fourth quarter of 2015, approximately 66 percent were produced and delivered from the partnership's facilities, with the remainder being purchased from the sponsor's Whitehall facility.
Contribution margin was $9.66 per ton in the fourth quarter of 2015, a decrease from the third quarter contribution margin of $14.00 per ton, or 31 percent, due primarily to the decrease in sales prices, particularly for sand sold FOB mine, as well as the impact of empty railcar storage costs.
"We benefited in the quarter from the contract settlement payment, but the fourth quarter was very challenging," said Robert E. Rasmus, chief executive officer of Hi-Crush. "These difficult conditions have extended into the first quarter of 2016, and while pricing has not deteriorated further, it has not improved. We anticipate that the lower levels of activity we experienced late in the fourth quarter will continue at least through the first half of the year. Although, the trend forward into 2016 reflects the impact of further oil price declines with fewer wells being completed, we remain confident that the long-term fundamentals of the industry remain strong."
Revenues for the year ended Dec. 31, 2015, totaled $339.6 million on sales of 5.0 million tons of frac sand, compared to revenues of $386.5 million on sales of 4.6 million tons of frac sand for the year ended Dec. 31, 2014. Contribution margin averaged $18.28 per ton for the full year 2015, a decrease from the full year 2014 contribution margin of $37.34 per ton, or 51 percent, due primarily to the decrease in sales prices experienced throughout the year.