Source Energy Services Ltd. said that its sand sales volumes for the third quarter of 2018 were 726,000 metric tons. Approximately 94 percent of these sales were made through Source’s Canadian distribution network and the majority utilized Source’s last mile logistics services where Source delivered sand directly to customers’ well sites. This brings Source’s 2018 nine-month sales volumes to 2,182,000 metric tons.
While Source’s quarter-over-quarter Canadian sand sales volumes were largely unchanged from the second to the third quarter, the 11 percent decline in sales volumes was primarily due to a reduction in Source’s U.S.-based mine gate sales.
Looking ahead to the fourth quarter of 2018, Source expects that exploration and production (E&P) companies will conservatively manage their remaining 2018 capital spending programs. This has led Source to lower its fourth quarter sales volume expectations.
As we move into 2019, Source expects that activity levels will substantially improve from the fourth quarter of 2018. The addition of Montney and Duvernay customer contracts, refreshed capital budgets from E&P companies and continued positive economics for Montney and Duvernay production provide Source with confidence that its 2019 sales volumes will exceed those seen in 2018.