Source Energy Services announced key achievements for the quarter ended Sept. 30:
- Recorded sand sales volumes of 963,539 metric tonnes (Mt) and sand revenue of $142.2 million, an increase of $40.1 million from the third quarter of 2023, representing the highest quarterly sand volumes and revenue achieved to date.
- Generated total revenue of $183.1 million, a $58.4 million increase from the third quarter last year.
- Realized gross margin of $33.7 million and Adjusted Gross Margin of $43.3 million, increases of 34% and 41%, respectively, when compared to the same period of 2023.
- Reported net income of $10.2 million, an increase of $6.4 million compared to the third quarter last year.
- Announced a partnership with Trican Well Service Ltd. to construct a unit train capable terminal facility located in Taylor, British Columbia, Canada.
- Closed an acquisition of additional sand trucking assets, enhancing the existing trucking fleet and further strengthening Source’s well site solutions platform.
- Completed construction of Source’s 10th Sahara unit, now deployed and operating on the North Slope in Alaska.
- Delivered record sand volumes for the third consecutive quarter to our customer well sites through last mile logistics, and achieved utilization of 83% across the ten-unit Sahara fleet, compared to 79% utilization for the third quarter of 2023.
Strong customer activity levels in the Western Canadian Sedimentary Basin (WCSB), including new customers, contributed to the increase in sand sales volumes. The customer additions and strong activity levels also led to a third consecutive quarter of record volumes delivered for “last mile” logistics during the period.
Utilization for Sahara units in both Canada and the U.S. was strong, and included the commencement of operations for the newly constructed unit delivered to Alaska during the third quarter.
On July 25, 2024, Source announced the execution of a partnership arrangement with Trican to construct a new terminal facility located in Taylor, British Columbia, Canada. Construction of the facility has commenced, and will result in a unit train capable terminal which will accommodate approximately 55,000 Mt of sand storage and more than 12,000 Mt of daily sand throughput capacity. The first phase of the project is expected to be operational late this year, with completion of the Taylor Facility expected in early 2025.
Under the terms of the arrangement, Trican will advance funding for construction on a cost-to-complete basis in exchange for transloading and sand supply services, as well as a fee payable to Trican on each advance drawn, repayable through transloading credits at the Taylor Facility and optional cash payments over a three-year term.
On Aug. 19, 2024, Source completed the acquisition of the sand trucking assets of PVT Group Ltd., PVT Energy Group Inc. and PVT Transport Group Inc., a transportation and logistics company located in northwestern Alberta, for an aggregate purchase price of $2.2 million.
The purchase price consisted of $0.4 million paid in cash upon closing and a promissory note payable over a nine-month term. The acquisition complements the sand trucking acquisition completed earlier this year and further enhances Source’s mine to well site offering in the WCSB.
With construction of the Taylor Facility and the completion of the rail project at the Chetwynd terminal facility, Source is strategically positioned in northeastern British Columbia to accommodate increased demand for mine to well site services as LNG Canada comes online.
These Source projects, combined with the sand trucking asset acquisitions completed during the year, Source’s existing terminal network footprint and its Wisconsin and Peace River production facilities will create additional opportunities for Source to continue to grow its business and take advantage of activity levels in the WCSB, expected to remain strong to the end of the year and through 2025.