As previously reported, on Sunday, April 14th, a mechanical fire
occurred at the Atlas Energy Solutions Inc. (NYSE: AESI) (“Atlas”
or the “Company”) mine in Kermit, Texas. Atlas remains grateful
that all personnel at the site, including Company employees and
contractors, are safe, that no injuries occurred or environmental
impacts have been reported, and for the exceptional work of the
first responders.
John Turner, President, CEO and CFO of Atlas, said: “We are very
proud of the quick action from our integrated teams, both Atlas and
Hi-Crush, who are working to deliver collaborative, timely and
customer-focused solutions. While we work hard to ensure events
like this do not occur, we are focused on safely returning the
facility to operation as soon as possible. In addition, benefitting
from our differentiated scale and associated geographically
distributed proppant production operations, we are continuing to
support our customers’ ongoing needs.”
The company has conducted a preliminary assessment of the
facility, which is ongoing, and can provide the following
information.
- The fire primarily impacted the “feed system,” which transports
sand from the dryers and separators to storage silos. The full
“feed system” rebuild is expected to be completed by the end of the
second quarter.
- The team began moving temporary loadout equipment to the Kermit
facility within 48 hours of the incident. The facility remains
closed and initial restart of operations is expected at the
beginning of next week.
- Once the facility is restarted and the temporary loadout
equipment is fully operational, we expect to fulfill all Kermit
facility customer commitments with sand produced and loaded from
that facility.
- We are assessing the cost to repair the feed system and
reviewing the financial impact of the incident. In addition, we
have filed an insurance claim and expect coverage to be available
to reimburse us for the cost of the repairs.
- The temporary closing of the Kermit facility will have no
impact on the timing or cost of the Dune Express construction.
Atlas will provide additional updates to our second quarter
operations on our first quarter earnings call scheduled for Monday,
May 6th.
About Atlas Energy Solutions
Atlas Energy Solutions Inc. is a leading proppant producer and
proppant logistics provider, serving primarily the Permian Basin of
West Texas and New Mexico. We operate 12 proppant production
facilities across the Permian Basin with a combined annual
production capacity of 28 million tons, including both large-scale
in-basin facilities and smaller distributed mining units. We manage
a portfolio of leading-edge logistics assets, which includes our
42-mile Dune Express conveyor system, which is currently under
construction and is scheduled to come online in the fourth quarter
of 2024. In addition to our conveyor infrastructure, we manage a
fleet of 120 trucks, which are capable of delivering expanded
payloads due to our custom-manufactured trailers and patented
drop-depot process. Our approach to managing both our proppant
production and proppant logistics operations is intently focused on
leveraging technology, automation and remote operations to drive
efficiencies.
We are a low-cost producer of various high-quality, locally
sourced proppants used during the well completion process. We offer
both dry and damp sand, and carry various mesh sizes including 100
mesh and 40/70 mesh. Proppant is a key component necessary to
facilitate the recovery of hydrocarbons from oil and natural gas
wells.
Our logistics platform is designed to increase the efficiency,
safety and sustainability of the oil and natural gas industry
within the Permian Basin. Proppant logistics is increasingly a
differentiating factor affecting customer choice among proppant
producers. The cost of delivering sand, even short distances, can
be a significant component of customer spending on their well
completions given the substantial volumes that are utilized in
modern well designs.
We continue to invest in and pursue leading-edge technologies,
including autonomous trucking, digital infrastructure, and
artificial intelligence, to support opportunities to gain
efficiencies in our operations. To this end, we have recently taken
delivery of next-generation dredge mining assets to drive
efficiencies in our proppant production operations. These
technology-focused investments aim to improve our cost structure
and also combine to produce beneficial environmental and community
impacts While our core business is fundamentally aligned with a
lower emissions economy, our core obligation has been, and will
always be, to our stockholders. We recognize that maximizing value
for our stockholders requires that we optimize the outcomes for our
broader stakeholders, including our employees and the communities
in which we operate. We are proud of the fact that our approach to
innovation in the hydrocarbon industry while operating in an
environmentally responsible manner creates immense value. Since our
founding in 2017, our core mission has been to improve human
beings’ access to the hydrocarbons that power our lives while also
delivering differentiated social and environmental progress. Our
Atlas team has driven innovation and has produced industry-leading
environmental benefits by reducing energy consumption, emissions,
and our aerial footprint. We call this Sustainable Environmental
and Social Progress.
We were founded in 2017 by Ben M. “Bud” Brigham, our Executive
Chairman, and are led by an entrepreneurial team with a history of
constructive disruption bringing significant and complementary
experience to this enterprise, including the perspective of
longtime E&P operators, which provides for an elevated
understanding of the end users of our products and services. Our
executive management team has a proven track record with a history
of generating positive returns and value creation. Our experience
as E&P operators was instrumental to our understanding of the
opportunity created by in-basin sand production and supply in the
Permian Basin, which we view as North America’s premier shale
resource and which we believe will remain its most active through
economic cycles.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). Statements
that are predictive or prospective in nature, that depend upon or
refer to future events or conditions or that include the words
“may,” “assume,” “forecast,” “position,” “strategy,” “potential,”
“continue,” “could,” “will,” “plan,” “project,” “budget,”
“predict,” “pursue,” “target,” “seek,” “objective,” “believe,”
“expect,” “anticipate,” “intend,” “estimate” and other expressions
that are predictions of or indicate future events and trends and
that do not relate to historical matters identify forward-looking
statements. Examples of forward-looking statements include, but are
not limited to, statements regarding the extent of the damage to
the Kermit facility, the required repairs and the cost and timeline
of such repairs; Atlas’s expectations regarding the timing of the
Kermit facility’s return to service and its utilization; Atlas’s
expectations relating to continuing operations during the pendency
of repairs; statements about the availability and extent of
insurance coverage; statements about the ultimate impact of the
incident on Atlas’s future performance; expected production
volumes; our business strategy, our industry, our future operations
and profitability, expected capital expenditures and the impact of
such expenditures on our performance, statements about our
financial position, production, revenues and losses, our capital
programs, management changes, current and potential future
long-term contracts and our future business and financial
performance.
Although forward-looking statements reflect our good faith
beliefs at the time they are made, we caution you that these
forward-looking statements are subject to a number of risks and
uncertainties, most of which are difficult to predict and many of
which are beyond our control. These risks include but are not
limited to: uncertainties as to whether we will be able to
effectuate the repairs to the Kermit facility in the expected time
period or at all; uncertainty regarding the ultimate cost to repair
the facility and bring it back online and the availability of
insurance proceeds to offset the cost of such repairs; risks
relating to the impact of this incident on our ability to service
our customers; unforeseen or unknown liabilities; unexpected future
capital expenditures; potential litigation relating to the
transaction; potential negative effects of the incident on the
market price of Atlas’s common stock or operating results;
commodity price volatility, including volatility stemming from the
ongoing armed conflicts between Russia and Ukraine and Israel and
Hamas; increasing hostilities and instability in the Middle East;
adverse developments affecting the financial services industry; our
ability to complete growth projects, including the Dune Express, on
time and on budget; the risk that stockholder litigation in
connection with our recent corporate reorganization may result in
significant costs of defense, indemnification and liability;
changes in general economic, business and political conditions,
including changes in the financial markets; transaction costs;
actions of OPEC+ to set and maintain oil production levels; the
level of production of crude oil, natural gas and other
hydrocarbons and the resultant market prices of crude oil;
inflation; environmental risks; operating risks; regulatory
changes; lack of demand; market share growth; the uncertainty
inherent in projecting future rates of reserves; production; cash
flow; access to capital; the timing of development expenditures;
the ability of our customers to meet their obligations to us; our
ability to maintain effective internal controls; and other factors
discussed or referenced in our filings made from time to time with
the U.S. Securities and Exchange Commission (“SEC”), including
those discussed under the heading “Risk Factors” in Annual Report
on Form 10-K, filed with the SEC on February 27, 2024, and any
subsequently filed Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the
date hereof. Factors or events that could cause our actual results
to differ may emerge from time to time, and it is not possible for
us to predict all of them. We undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240418618067/en/
Kyle Turlington T: 512-220-1200 IR@atlas.energy
New Atlas Holdco (NYSE:AESI)
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