Atlas Energy Solutions Inc. (AESI) Earnings Call Transcript & Summary

[Audio Gap] It's pretty remarkable that in just over a year, Atlas has gone public, finished our plant expansion at Kermit, completed the transformational acquisition of Hi-Crush and all while progressing on time and on budget, building out the Dune Express. I couldn't be any prouder of our employees and our leadership team. We are in the early stages of the integration process with Hi-Crush, already making great strides together. It's very exciting to see what the combination of these very talented and innovative workforces can accomplish. And we're already beginning to achieve some early synergies. For example, we will connect Hi-Crush to our electrical substation this summer, which helps to lower our cost structure. Also during this summer, we plan to experiment with dredge mining at Hi-Crush's adjacent Kermit facility. Importantly, our customers are providing very positive feedback on the acquisition. Our assets and people are so strategically complementary. Combining our Dune Express with the OnCore mines and our high-capacity trucking with the Hi-Crush last mile solutions makes Atlas the most formidable and compelling provider of sand and logistics in the Permian. Lastly, I want to congratulate John Turner on his well-deserved promotion to CEO. I've worked with John at our first public company, Brigham Exploration Company and at Atlas since inception. And I couldn't be any more excited about passing the baton not only to a great leader, but a very steady hand. John is the right person to lead Atlas.

Thank you, Bud, for the kind words. I share your enthusiasm for Atlas and all the exciting opportunities we have in front of us. Our acquisition of Hi-Crush is already off to a great start. In March, Hi-Crush's Kermit plant set a monthly volume record and Pronghorn set a monthly record for total loads. In February, we successfully floated our first new dredge, the Sandstorm. We then commissioned the Sandstorm in March, and it is currently performing as expected. Our second dredge, the Edlund, is currently in the commissioning process and we plan to begin running sand through it later this month. The site and civil work for our OnCore #8 mine was completed in April, and we expect the mine to be operational this month. Lastly, I want to provide a construction update on the Dune Express. As of the end of April, we have substantially completed our highway in overhead crossing, 16 of our 20 lease road crossings and 9 of our '19 cattle and wildlife crossings. The installation of the St. Pete system for the Dune Express, which as Ben described as the [ pant-like ] design, commenced in April and will run through June, while the installation of a concrete sleeper will be completed by the end of this month. By the end of April, over 60% of the conveyor modules were completed and we expect to be 95% complete by the end of this May. As of today, 95% of the belt has been flanked into stage for installation. There are over 200 employees on the ground working daily on the construction of the Dune Express. The Dune Express is currently on time and on budget and commencement is still planned for the fourth quarter of 2024. We are looking forward to reducing traffic on the public roads and making the communities we work in a safer place to live. Atlas continues to shift our business model from a sand producer selling at the mine gate to a fully integrated sand delivery company fixated on driving solutions for our customers. This business model shift is being enhanced with the addition of Pronghorn last mile and will be even further emphasized in Q4 of 2024 with the launch of the Dune Express, coupled with high-capacity multi-trailer operations. Not only is Atlas leading with fully integrated solutions, we are also leading with technology. Building on our digital platforms capability to monitor proppant inventory at our customers' well sites, we released our Opti Order feature, a ground-breaking advancement for seamless technology-assisted sand ordering based on live inventory and operational data centers. Our Opti Order feature provides the foresight to keep our sand production optimized, while also giving our customers confidence in meeting their production targets. On the heels of Opti Order, we also released Gen 1 of our Opti Dispatch feature, a first of its kind digital functionality that autonomously schedules, optimizes and dispatches sand delivery without human intervention. Combined, Opti Ordering and Opti Dispatch, set Atlas' digital platform well ahead of the competition. Our automation, efficiencies, scale and innovation continues to drive market differentiation, while advancing the digital transformation of the Permian Basin.