Solaris Oilfield Infrastructure Announces Kingfisher Contract Amendment
December 20 2018 - 5:21PM
Business Wire
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) (“Solaris”
or the “Company”) announced today an amendment to the contract with
its primary customer at the Company’s transloading facility in
Kingfisher, Oklahoma (the “Kingfisher Facility”). The amended
contract (1) reduces the minimum contracted annual revenue to
approximately $3.6 million beginning in March 2019, (2) shortens
the initial term to December 31, 2020, (3) triggers a partial
termination payment to Solaris of approximately $26.0 million,
which was paid in cash during December 2018, and (4) allows the use
of a portion of the previously dedicated storage and rail track for
additional third-party customers’ use.
In addition, Solaris has secured a two-year commitment from this
customer to be its exclusive provider of well site proppant storage
in Oklahoma, Texas and New Mexico.
Management Commentary
Solaris Chairman and Chief Executive Officer Bill Zartler
commented, “We are pleased to reach a mutually-beneficial agreement
to accommodate the shifting needs of both our customer and the
industry.”
Zartler continued, “While the industry shift to in-basin sand
has lowered potential demand for many transload facilities,
including Kingfisher, it has the opposite effect on our mobile
proppant systems. In-basin sand logistics removes a storage buffer
from the supply chain and relies heavily on trucking, which
introduces increased volatility to the total supply chain. We help
our customers manage that volatility through our market leading
mobile proppant management systems which provide a highly reliable
and large inventory buffer at the blender in a relatively small
footprint. In addition, our integrated software solutions provide
complete last mile supply chain visibility which facilitates
enhanced logistics management.”
About Solaris’ Kingfisher Facility
The Kingfisher Facility is a 300-acre, unit-train capable
facility located on the Union Pacific Railroad in Central Oklahoma.
The facility consists of over 45,000 feet of rail track and 30,000
tons of high efficiency silo storage. The facility was completed in
August 2018 and capital expenditures related to completion totaled
approximately $40 million. In the quarter ended September 30, 2018,
Kingfisher revenues accounted for less than 5% of total company
revenue.
About Solaris Oilfield Infrastructure, Inc.
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) manufactures
and rents mobile equipment that drives supply chain and execution
efficiencies in the completion of oil and natural gas wells.
Solaris’ patented mobile proppant systems are deployed in many of
the most active oil and natural gas basins in the United States,
including the Permian Basin, the Eagle Ford Shale, the STACK/SCOOP
formation, the Marcellus and Utica Shales, the Haynesville Shale,
the Rockies, the Bakken and the Barnett Shale. Additional
information is available on our website,
www.solarisoilfield.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Examples of
forward-looking statements include, but are not limited to,
statements we make regarding the outlook for the operation of
our Kingfisher Facility, current long-term contracts and
our future business and financial performance. Forward-looking
statements are based on our current expectations and assumptions
regarding our business, the economy and other future conditions.
Because forward-looking statements relate to the future, by their
nature, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. As a
result, our actual results may differ materially from those
contemplated by the forward-looking statements. Factors that could
cause our actual results to differ materially from the results
contemplated by such forward-looking statements include, but are
not limited to the factors discussed or referenced in our filings
made from time to time with the SEC. 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/20181220005949/en/
Yvonne FletcherSenior Vice President, Finance and Investor
Relations(281) 501-3070IR@solarisoilfield.comSolaris Oilfield
Infrastructure, Inc.
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