Select Sands Corp. announced operational and financial results for the full year and fourth quarter of 2017 and the filing of its 2017 full-year financial statements. The company reported full-year revenues of $15.1 million and gross profit of $2.9 million, resulting in a 19.2 percent gross profit margin for 2017.
The company posted a net loss for the full year of $1.6 million as compared to a net loss of $2.5 million for 2016 – a 36 percent improvement year-over-year, while Increasing revenue by 28 percent to $6.5 million in the fourth quarter of 2017 as compared to $5.1 million in the third quarter 2017. Driving the increase was higher transportation revenue, which is substantially passed through to cost of goods sold, and higher plant gate pricing, according to the company.
The company said it:
• Sold frac sand volumes of more than 300,000 tons during 2017 – a major accomplishment given Select Sands’ Sandtown operations in Arkansas, and related brownfield upgrade initiatives only began in the first quarter of the year.
• Made significant and steady improvements at Sandtown to bring the facilities up to operating at the 600,000 tpy capability, including optimizing processes to reduce waste and upgrading pumps and piping to increase throughput.
• Entered into a multi-year frac sand supply agreement with an industry-leading oilfield services provider with commitments through 2019. Initial rail shipments began in the first quarter of 2017.
• Began barging frac sand in November and expect this will remain an important mode of delivery moving forward.
• Started construction during the fourth quarter of a private road direct from the Sandtown mining operations to the main highway that was subsequently completed in the first quarter of 2018, reducing transportation costs due to lower mileage to the company’s processing facilities.
• Initiated sales of a new 30/50 mesh product in the fourth quarter and continue to evaluate additional opportunities to broaden Select Sands’ product mix to satisfy incremental customer demand.
Zig Vitols, president and chief executive officer, commented, “Given that we only began commercial production at the start of last year, I am very pleased with the progress we made throughout 2017 both operationally and financially. Significant accomplishments were made on several fronts to get us to where we can now produce at the facilities’ current design run rate of 600,000 tpy, and I want to thank all our employees for their continued tireless efforts. While our fourth quarter financial results included certain items that impacted comparisons to the third quarter, during the period we materially improved our delivery flexibility through the addition of barging and began construction of a direct access road to reduce the number of miles driven to reach the recently rebuilt multi-lane highway. I am happy to report that the construction of our road was recently completed, and we are already seeing the benefits in our cost structure.
“While our primary focus throughout much of 2017 centered on incrementally increasing our production levels to take advantage of our available capacity, we have now turned our attention to further improving plant processes that drive additional cost efficiencies, capacity expansion, as well as continued enhancement of our product offerings and delivery capabilities,” concluded Vitols. “Given the outlook for increasing sand intensity in well completions and the strategic location of our operations relatively close to the some of the most prolific producing oil and gas basins in the United States, including the Permian, Eagle Ford, SCOOP/STACK/Woodford, Haynesville, Utica, Marcellus and DJ, we anticipate growing demand for our premium quality Northern White frac sand product. We are well-positioned to further capitalize on this strong industry backdrop and look forward to further development opportunities.”