Atlas Energy Solutions Inc. (NYSE:AESI) Q1 2024 Earnings Call Transcript

Page 3 of 3

Neil Mehta: Thanks, John.

Operator: Our next question is from Saurabh Pant with Bank of America. Please proceed.

Saurabh Pant: Hi. Good morning, Bud and John. If I can just go back to the Hi-Crush integration. I know there were a couple of questions early on, but if we come back to that, and as you move through the integration process, as you’re going out and talking to the customers, looking at the assets, not just Kermit but the OnCore assets, can you share some feedback you have heard from the customers, from the ops teams out there, both positive, negative, just that you have owned those assets for, I think, just around two months right now?

Bud Brigham: Hi, maybe I’ll just make a real quick general comment and you guys may want to add to it. This is Bud. I mean, obviously, Atlas, prior to the Hi-Crush acquisition, we have a really strong customer base in the Delaware Basin and our giant open dunes and our high-capacity trucking and logistical business it’s been serving. And the excitement over the Dune Express has attracted a really strong customer base for Atlas in the Delaware Basin as the largest proppant producer in the basin even prior to Hi-Crush. And clearly, Hi-Crush did a great job with the OnCore mines. The proximity of those mines to the operators in the Midland Basin, it gave them a very strong customer base in the Midland Basin. So it’s obvious that the customers are really excited about that now we provide — we’re logistically advantaged to both the Midland and the Delaware basins, and they get the benefit of Atlas’ scale and reliability and quality.

And so it’s been very positive. I don’t know if you want to add to that.

John Turner: Yes, I mean, I think, if I just boil it down, I mean, it’s about locating our mines, our sand proximal to every well site out there. And a lot of concerns that customers had about going with a single sand provider, they couldn’t — they couldn’t. If they were in the Delaware Basin, then they needed sand in the Midland Basin. We weren’t going to be able to provide that. But today, you know, we’re delivering sands, obviously, to the back of the blender to all of our customers across, whether they’re in the mid — whether Midland Basin player, Delaware Basin player or both, and just adding to that scale to be a better partner for our customers soon.

Saurabh Pant: Okay. Awesome. Awesome. Just one more for me. Maybe just talk a little bit about your pricing strategy. I’m thinking pricing strategy more broadly from a Kermit versus OnCore perspective, right, because OnCore is a very different kind of asset. I’m assuming you would continue to have slightly lower price but longer duration contracts on those assets. But maybe you can talk to that a little bit and just maybe remind us that if the $26 to $28 per ton pricing guidance that you gave for the full year, is that still the right place to be?

John Turner: You know, we’re not really talking about what our pricing strategy is out there. Obviously, that’s something that we obviously internally work on here. What I will say is we have a low cost to produce sand and we’re going to bring those costs down. And so we are very competitive when it comes to, obviously, sand delivery — obviously, both sand price and delivery costs, it’s really into that lowest cost to the well site. And so that’s really kind of where we focus there.

Saurabh Pant: Okay, perfect. Okay, John, thanks for that. I’ll turn it back.

John Turner: Thanks.

Bud Brigham: Thank you.

Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Bud Brigham: All right. We’d like to thank everybody for joining us for our first quarter call. And we look forward to reporting our second quarter results on our next call. Thank you very much.

John Turner: Thank you. Thank you, everybody.

Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time, and thank you for your participation.

Follow Atlas Energy Solutions Inc.

Page 3 of 3