Select Sands Corp. announced operational and financial results for the first quarter of 2020. The company is reporting:
• Sold 59,089 tons of frac and industrial sand during the first quarter of 2020, compared to 10,017 tons in the fourth quarter of 2019.
• Generated revenue of $3.6 million and a gross loss of $0.8 million in the first quarter of 2020, versus $0.3 million of revenue and a gross loss of $1.2 million in fourth quarter of 2019.
• A first quarter of 2020 net loss of $1.5 million, or $0.02 loss per diluted share, in first quarter of 2020, compared to a net loss of $3.4 million, or $0.04 loss per diluted share, in the fourth quarter of 2019.
Announced on Jan. 15, 2020, the start of a plant reconfiguration project to optimize and consolidate processing assets to improve costs. In addition, the company announced completion of the purchase of the Diaz Rail Loading Facility in Diaz, Ark.
Zig Vitols, president and chief executive officer, commented, “The first quarter was highlighted by success on multiple fronts and a direct result of our focused efforts in 2019 to strategically expand our footprint of operations and drive continued further enhancements in our production processes and cost structure. Leveraging our close proximity to the Eagle Ford Basin and the industry’s clear need for premium 100-mesh Northern White Sand given the lower quality of in-basin offerings, we began transload operations at an established facility in George West, Texas, in December and started delivering in January under a long-term agreement to a large E&P operating in the basin. The result was a significant increase in both sales volumes and pricing from the fourth quarter of 2019, and we were poised for even higher sales volumes for the second quarter until the current pandemic environment curtailed activity.
“During the first quarter, we also started and made significant progress on our Plant Reconfiguration Project in Arkansas. While our first quarter cost of goods sold per ton was impacted by expected temporary production inefficiencies as a result of the construction process, the opportunity to significantly improve our long-term cost profile clearly outweighed the short-term impact. We look forward to completing the full project in the next few months, which will place the company in a stronger position for improved margins and long-term success once industry conditions improve.
“While we have been pleased to see a trend of improved crude oil pricing over the past weeks, we anticipate the remainder of 2020 to be highlighted by continued volatility given the uncertainty associated with the ongoing COVID-19 situation. In this environment, we remain focused on what we can control and ensuring we best leverage opportunities as they present themselves. First and foremost, we will promote the health and safety of our employees. We are fortunate to have an outstanding team of highly dedicated professionals working for the company, and we will continue to provide a safe operating environment not only for employees, but also our customers, business partners and contractors.
“We also look forward to completion of our Plant Reconfiguration Project in this year’s third quarter. The operational efficiencies and related cost reductions will prove invaluable as shipments restart once industry conditions improve. While the near-term disruptions to the market from COVID-19 are undeniable, the underlying long-term fundamentals for Select Sands remain the same – we can provide customers a premium Northern White Sand product that is strategically located much closer to key oil and gas basins in the Southern U.S. as compared to traditional sources in the Upper Midwest. As such, we believe we are in a good position for long-term success once onshore well completions activity ramps up again,” he concluded.