Select Sands Provides Operations Update
— Expects Second Quarter 2017 Total Frac/Industrial Sand Sales Volumes to Be More Than Double First Quarter 2017 Levels —
Second Quarter 2017 Sales Volumes and Pricing
- The Company now anticipates second quarter 2017 total Frac/Industrial sand sales volumes to be at least twice the 22,427 tons sold and shipped during the first quarter.
- Select Sands had previously expected Frac/Industrial sales volumes to increase 40% to 60% over the first quarter, after accounting for the impact on production and related shipments from flooding during an approximate two-week period earlier in the second quarter (see press release dated May 5, 2017).
- For the 2017 second quarter, the Company currently anticipates the blended average selling price for Frac/Industrial sand will be approximately 13% higher than the 2017 first quarter.
Facility Capacity and Logistics
- Reconfiguration of operations processes has been completed and the processing facility now has the capability to produce at a rate of 600,000 tons per year. However, to ensure optimal inventory management, the Company is producing at levels consistent with its ability to deliver product, which is primarily by rail. A typical rail car can hold approximately 110 tons of product.
- While accumulation of committed rail cars from customers has occurred at a slower pace than originally anticipated, the number of cars and the rate at which the cars are being received continues to increase. A total of 300 in-service rail cars are expected by the end of this month, which is significantly higher than the 67 rail cars in-service at the end of the first quarter.
- Select Sands is also pursuing opportunities for securing additional rail cars for product shipments through new and broadened customer relationships.
- Certain long lead time equipment has been purchased and is anticipated to be installed along with other components later this year once enhanced logistics capabilities are in place to support the Company’s plans for further capacity expansion of the processing facility.
Zig Vitols, President and Chief Executive Officer, commented, “I have been extremely pleased with the progress we have made since starting commercial production early this year. During the second quarter, our dedicated management team and operational personnel have continued to do an outstanding job of ensuring that we safely produce premium quality sand. We are currently focused on enhancing our logistics by working closely with customers to secure additional rail cars. The build-out of our delivery capability is expected to allow us to utilize our maximum production rate late in the second half of 2017.”
The Company advises that the production decision on the Sandtown deposit was not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that production will occur as anticipated or that anticipated production costs will be achieved.
About Select Sands Corp.
Select Sands Corp. is an industrial Silica Product company developing its 100% owned, 520-acre Northern White, Tier-1, silica sands project located in Arkansas, U.S.A. Select Sands’ Arkansas property has a logistical advantage of being significantly closer to oil and gas markets located in Oklahoma, Texas, New Mexico, and Louisiana than Wisconsin sources. The Tier-1 reference above is a classification of frac sand developed by PropTester, Inc., an independent laboratory specializing in the research and testing of products utilized in hydraulic fracturing & cement operations, following ISO 13503-2:2006/API RP19C:2008 standards.
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This news release includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. The forward-looking statements in this press release relate to the continued escalation of rail car count, second quarter 2017 frac and industrial sand sales volumes, the blended average selling price for frac/industrial sand in the second quarter of 2017 and the intention to expand the capacity expansion. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.