Source Energy Services Ltd. has entered into agreements with Canadian Silica Industries Inc. and Contractor’s Leasing Corp. (CSI), which will result in Source assuming all operations, distribution and sale of domestic frac sand from CSI’s Peace River facility.
The transaction:
- Adds 400,000 metric tonnes of domestic frac sand production capability to Source’s existing portfolio of Northern White frac sand and other products, broadening its offering to its customer base.
- Consolidates CSI’s production facility with Source’s adjacent 3,600 acres of mineral resource explorations rights in Peace River resulting in production efficiencies and extending the life of the contiguous resource.
- Provides Source access to domestic sand production that is both geographically closest to the Montney and not rail dependent.
- Integrates Peace River frac sand into Source’s leading distribution network resulting in low-cost production with significant logistical advantages.
- Generates significant financial upside with minimal capital costs and balance sheet impacts while incorporating a flexible lease structure.
“This transaction with CSI adds critical domestic sand supply for Source,” said Scott Melbourn, chief executive officer of Source. “It ensures that we have the most reliable supply of both Northern White and domestic sand, enhancing our ability to effectively and efficiently service our clients.”