NEW YORK (AP) - Shares of Hi-Crush Partners LP rose nearly 16 percent Thursday after the producer of sand used in oil and gas drilling launched an initial public offering.
The shares were at $19.67 in afternoon trading after opening at the offering price of $17.
The offering raised about $191 million.
Hi-Crush planned to offer 11.25 million shares at between $19 and $21 each, according to a filing last week with the U.S. Securities and Exchange Commission. It granted underwriters a 30-day option to buy up to 1.69 million shares to cover over-allotments, which could increase the amount raised by the offering.
The company said in its prospectus that it expects to pay a quarterly distribution of at least 47.5 cents per share.
Houston-based Hi-Crush sells sand used in hydraulic fracturing, or fracking _ the process of pumping water, sand and chemicals deep underground to break rock formations and release oil and natural gas. The technique has helped boost U.S. production of gas.
Hi-Crush had 2011 net income of $9.3 million on revenue of $20.4 million. In the first six months of 2012, it earned $18 million on revenue of $34.2 million, according to regulatory filings.
The company produces about 1.6 million tons of sand per year from a 561-acre facility, complete with rail spurs, that it opened last year near Wyeville, Wis. The company says it has contracted 91 percent of its capacity through the middle of 2014 and 71 percent for two years after that. It has said it will look to buy or develop other facilities.
The sand is purchased by oilfield services companies including Baker Hughes Inc. and Halliburton Co. under long-term contracts, according to Hi-Crush.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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