Emerge Energy Services announced fourth quarter and full-year 2015 financial and operating results. The company reported a net loss of $9.9 million for the three months ended Dec. 31, 2015. This includes full-quarter sales of 581,000 tons of sand. For the year ended Dec. 31, 2015, Emerge Energy reported net loss of $9.4 million.
“We are proud of how our entire team has responded to such a challenging market, as declining oil prices and rig counts continued to drive down frac sand demand throughout 2015,” said Ted W. Beneski, chairman of the board of directors of the general partner of Emerge Energy. “We are still confident that the general oil and gas market and the frac sand market will recover, and we now believe that recovery may occur in 2017.”
“The Sand segment generated adjusted EBITDA of $2.5 million for the fourth quarter and $46.9 million for the year,” said Rick Shearer, CEO of Emerge Energy. “Our fourth quarter volumes were down approximately 27 percent from the third quarter of 2015, and market pricing, as well as the prices we have negotiated with our customers, have continued to decline. While our team has been very successful in lowering our production costs, and believe we will continue to do so in the near future, our fixed rail expense remains significant. We are taking a number of steps to reduce that cost, such as cancelling or pushing out in-service dates for future railcars, seeking rate relief, and aggressively pursuing opportunities to sublease a portion of our idle railcars.
“2016 is expected to be another challenging year for our industry, but the Emerge Energy team sees this time as an opportunity to build further our position as one of the elite frac sand companies in the industry through our excellent customer service, product quality, and the introduction of exciting, industry-leading new technology,” Shearer said. “When this market ultimately recovers, we expect to be one of the top sand companies positioned to quickly respond to our customers’ needs and enjoy rapid growth yet again.”