Source Energy Services Announces Changes to its Board of Directors, Fourth Quarter Operational Update and Other Matters

TSX: SHLE

CALGARYFeb. 20, 2019 /CNW/ – Source Energy Services Ltd. (“Source” or the “Company”) announces changes to its Board of Directors. Mr. A.S. (Stew) Hanlon has been appointed as Chairman of the Board of Directors, while Mr. Cody Church has resigned from the Board of Directors and will be replaced by Mr. Michael (Mick) MacBean, under the terms of the TriWest Capital Partners (“TriWest”) Nomination Agreement with Source. Mr. MacBean will hold office until the earlier of the close of the next annual meeting of the shareholders of the Corporation or until his successor is elected or appointed.

Mr. Hanlon has been a Director and Chair of the Compensation and Corporate Governance Committee since Source’s initial public offering in April 2017. Mr. Hanlon was CEO (retired) of Gibson Energy (“Gibson”). In his 26-year tenure with Gibson he filled senior roles in finance, business development and operations, culminating in him serving as President and CEO from April 2009 until 2017. Mr. Hanlon is a Chartered Accountant, serves on the board of directors of Hammerhead Resources Inc., and Questor Technologies, and is on the Dean’s Advisory Council of the Edwards School of Business, University of Saskatchewan.

Mr. MacBean is a Senior Managing Director of TriWest and brings a wealth of operations, governance and financial experience to Source’s Board of Directors. Prior to joining TriWest in 2010, Mr. MacBean was founder and CEO of Diamond Energy Services LP, a Saskatchewan-based energy services firm. Mr. MacBean is a Chartered Accountant and currently serves on the board of directors of a number of private and public companies.

Source wishes to thank Mr. Church for his dedication, guidance and support over the last five years. Mr. Church joined the Board of Directors of Source when TriWest Capital invested in Source in the fall of 2013 and was an important part of the Board of Directors as Source went from a private company to a public company. Source wishes Mr. Church well in his future endeavors.

FOURTH QUARTER OPERATIONAL UPDATE

Source’s sand sales volumes for the fourth quarter of 2018 were 373,000 metric tonnes (“MT”). Approximately 85% of these sales were made through Source’s Canadian distribution network and the majority utilized Source’s last mile logistics services where Source delivered sand directly to customers’ wellsites. This brings Source’s 2018 sand sales volumes to 2,561,000 MT.

Sand sales volumes for the fourth quarter of 2018 were significantly impacted by a reduction in exploration and production (E&P) activity in Western Canada. This was primarily driven by budget exhaustion of E&P companies witnessed in Q4.

Sand sales volumes as reported in this announcement consist of a combination of sales made through Source’s Canadian distribution chain, at customers’ wellsites and at Source’s mines. Source cautions that in addition to the location of sand sales, numerous other factors can impact Source’s operating results and that a particular trend in total sales volumes may, or may not, indicate a trend in, or be indicative of, Source’s financial performance.

Turning to 2019, Source’s activity levels picked up significantly from the fourth quarter of 2018. As a result, Source expects first quarter 2019 activity levels to be in line with activity levels seen in the first quarter of 2018. While some of Source’s customers have provided guidance on their planned activities beyond the first quarter, Source recognizes capital programs and activity levels could be impacted by commodity price fluctuations, and uncertainty of near-term condensate demand. Accordingly, Source is discontinuing the practice of providing updates on sales volumes shortly after the end of each quarter.

As E&P companies continue to shift into manufacturing mode, the trend towards direct-sourcing continues and Source is pleased to now be working directly with five E&P customers under contracts. These contracted sales are in addition to sales to other E&P companies that wish to direct-source sand on a less formal basis, as well as traditional sales to pressure pumping customers. Beyond 2019, we are excited by the industry prospects that will arise from improved egress and the longer-term impacts of LNG export facilities on WCSB activity levels.

As we enter 2019, Source has cash on hand and significant unutilized borrowing capacity that will provide us flexibility to succeed during all stages of the cycle. We remain committed to ensuring that our capital expenditures in 2019 are funded from operating cashflows.

FOURTH QUARTER RESULTS RELEASE AND CONFERENCE CALL

Source is also pleased to announce that its fourth quarter financial results for the period ending December 31, 2018, will be released following the Toronto Stock Exchange market close on March 14, 2019.

A conference call to discuss Source’s fourth quarter financial results has been scheduled for 7:30 am MT (9:30 am ET) on March 15, 2019, for interested analysts, investors and media representatives.

The conference call dial-in details are:

Dial-In Number

Participant Passcode

Toll-Free: 1-888-390-0605

78666821

 

The call will be recorded and available for playback approximately 2 hours after the meeting end time, until April 15, 2019, using the following dial-in:

Playback Number

Playback Passcode

Toll-Free: 1-888-390-0541

666821#

 

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to future events, which include statements regarding results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: its outlook for operations and sales volumes; and industry activity levels. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements. With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: proppant market prices; future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers; the maintenance of Source’s significant contracts or their replacement with new contracts on substantially similar terms and that contractual counterparties will comply with current contractual terms; operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business and any other jurisdictions in which Source may conduct its business in the future; future capital expenditures to be made by Source; future sources of funding for Source’s capital program; Source’s future debt levels; the impact of competition on Source; and Source’s ability to obtain financing on acceptable terms. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in railcar availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Announces Corporate Update

TSX: SHLE

CALGARYJan. 8, 2019 /CNW/ – Source Energy Services Ltd. (“Source”) is pleased to announce its most current Corporate Update is now available on its website under ‘Investors – Events and Presentations’. Highlights of the Corporate Update include: Operations Overview including 2019 Capital Budget, Industry Trends, and Financial Overview.

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Announces TSX Approval of Amended Normal Course Issuer Bid

TSX: SHLE

CALGARYNov. 2, 2018 /CNW/ – Source Energy Services Ltd. (“Source” or the “Company”) is pleased to announce that the Toronto Stock Exchange (the “TSX”) has accepted Source’s application to amend its previously approved Normal Course Issuer Bid (“NCIB”) to purchase approximately 1% of its outstanding common shares for cancellation through the facilities of the TSX. Under the amended NCIB, Source is permitted to purchase up to $1.6 million worth of its common shares, which, based on current market prices, would represent a purchase of an aggregate of approximately 615,000 common shares including the 315,000 common shares purchase previously approved. The amended NCIB will commence on November 6, 2018 and allows for a further 300,000 common shares to be purchased for cancellation.

Under Source’s previously approved NCIB, as of October 31, 2018, Source’s broker, Scotia Capital Inc. (“Scotia”), had purchased 251,640 common shares at an average price of $2.87.

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to future events, which include statements regarding Source’s intentions or expectations with respect to the NCIB and any Common Share repurchases thereunder as well as results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: its NCIB, its outlook for operations and sales volumes; and industry activity levels. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements. With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: proppant market prices; future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers; the maintenance of Source’s significant contracts or their replacement with new contracts on substantially similar terms and that contractual counterparties will comply with current contractual terms; operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business and any other jurisdictions in which Source may conduct its business in the future; future capital expenditures to be made by Source; future sources of funding for Source’s capital program; Source’s future debt levels; the impact of competition on Source; and Source’s ability to obtain financing on acceptable terms. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in railcar availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

 

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Reports Q3 Results and Amendment to Normal Course Issuer Bid

TSX: SHLE

CALGARY, Oct. 31, 2018 /CNW/ – Source Energy Services Ltd. (“Source”) is pleased to announce its 2018 third quarter results.

HIGHLIGHTS

Source achieved the following results in the third quarter of 2018:

  • Sand sales volumes of 730,915 MT, up 43% compared to the same period in 2017;
  • Net Loss of $1.0 million or $(0.02) per share;
  • Gross Margin of $16.7 million and Adjusted Gross Margin(1) of $23.9 million;
  • Adjusted EBITDA(1) of $16.9 million;
  • Adjusted Gross Margin(1) per MT of $32.64 which includes a mine gate sales impact of $2.30 per MT;
  • Delivered 94% of sand sales volumes into the Western Canadian Sedimentary Basin (the “WCSB”);
  • Entered into a three-year agreement with Shell Canada Energy to provide Northern White proppant for Shell’s Duvernay wells;
  • Entered into a three-year agreement with Strath Resources Ltd. to provide Northern White proppant for Strath’s Montney wells; and
  • Deployed a fifth Sahara unit in August 2018.

Notes:

(1)

Adjusted EBITDA and Adjusted Gross Margin (including on a per MT basis) are not defined under IFRS, see “Non-IFRS Measures” below.

BUSINESS OUTLOOK

While commodity prices remain favorable, WCSB exploration and production (“E&P”) companies have been impacted by very wide differentials and an unpredictable operating environment. These factors have led to a significant slowdown in completion activity in the fourth quarter of 2018.

Source also expects that E&P companies will conservatively manage their remaining 2018 capital spending programs given these conditions. This has led Source to lower its fourth quarter sales volume expectations.

For 2019, Source has confidence that its 2019 sales volumes should improve from those seen in 2018 due to the addition of Montney and Duvernay customer contracts, as previously announced, that help provide a broader customer base and more balanced sales portfolio, refreshed capital budgets from E&P companies and continued positive economics for Montney and Duvernay production.

RESULTS OVERVIEW

Three months ended September 30

Nine months ended September 30

($000’s, except MT and per unit amounts)

2018

2017

2018

2017

Sand Volumes (MT)(1)

730,915

510,446

2,187,683

1,344,743

Sand Revenue

99,804

62,232

296,970

164,417

Wellsite Solutions

21,937

17,439

59,965

44,603

Terminal Services

1,633

1,547

4,028

5,289

Sales

123,374

81,218

360,963

214,309

Cost of Sales

99,518

59,779

278,629

168,354

Cost of Sales – Depreciation and Depletion

7,189

2,582

16,899

7,950

Cost of Sales

106,707

62,361

295,528

176,304

Gross Margin

16,667

18,857

65,435

38,005

Operating and General and Administrative Expenses

7,219

6,680

22,868

16,282

Depreciation

3,356

1,671

8,927

4,479

Income from operations

6,092

10,506

33,640

17,244

Other expense(income):

Loss (gain) on asset disposal

2,598

4,986

(3)

Finance expense

5,320

3,879

15,127

22,767

Loss (gain) on derivative liability

(460)

1,267

(1,871)

(2,897)

Share based compensation expense

567

984

2,775

4,854

Other income

(142)

(158)

(390)

(1,122)

Management fees

417

Foreign exchange loss (gain)(2)

(134)

583

(464)

1,107

Total other expense

7,749

6,555

20,163

25,123

Income (loss) before income taxes

(1,657)

3,951

13,477

(7,879)

Current income tax expense (recovery)

3,578

5,268

Deferred income tax expense (recovery)

(687)

(2,636)

1,535

(5,315)

Net Income (Loss)

(970)

3,009

11,942

(7,832)

Net Income (Loss) per share ($/share)

(0.02)

0.08

0.19

(0.18)

Diluted Net Income (Loss) per share ($/share)

(0.02)

0.06

0.18

(0.18)

Adjusted EBITDA(3)

16,913

14,334

62,204

30,537

Sand Revenue Sales/MT

136.55

121.92

135.75

122.27

Gross Margin/MT

22.80

36.94

29.91

28.26

Adjusted Gross Margin(3)

23,856

21,439

82,334

45,955

Adjusted Gross Margin/MT(3)

32.64

42.00

37.64

34.17

Notes:

(1)

One metric tonne (“MT”) is approximately equal to 1.102 short tons.

(2)

The average Canadian to US dollar exchange rate for the three and nine months ended September 30, 2018 was $0.7651 and $0.7766, respectively, (2017 – $0.7982 and $0.7652, respectively).

(3)

Adjusted EBITDA and Adjusted Gross Margin, including per MT, are not defined under IFRS. See “Non-IFRS Measures” below.

For the third quarter of 2018, Adjusted EBITDA was $16.9 million, which was $2.6 million higher than the $14.3 million of Adjusted EBITDA generated in the same period in 2017. The Net Loss for the third quarter of 2018 was $1.0 million, which was $4.0 million lower than the $3.0 million of Net Income earned in the same period in 2017.

Sand volumes in the third quarter of 2018 increased by 220,469 MT, or 43%, compared to the volume of sand sold in the third quarter of 2017. Source’s sand revenue increased in the third quarter of 2018 by $37.6 million, or 60%, compared to the third quarter of 2017. This increase in revenue was attributable to the increase in sand sales volumes as well as a 12% increase ($14.63 per MT) in average realized sand price. In the third quarter of 2018, Source’s sand revenue decreased by $10.5 million, or 10%, when compared to the second quarter of 2018, primarily due to a 10% decrease in sand volumes (83,080 MT), partially offset by an increase ($1.07 per MT) in the average sales price. The increase in the average price and decrease in sales volumes were primarily due to the decrease in the quantity of mine gate sales in the third quarter of 2018. Sales volumes were also negatively impacted by lower than anticipated activity levels in the WCSB in the third quarter of 2018

During the third quarter of 2018, revenue from wellsite solutions increased by $4.5 million, compared with the third quarter of 2017 primarily due to increased trucking activity associated with the increased sand sales volumes. Wellsite solutions revenue also increased by $1.2 millionin the third quarter of 2018, compared with the second quarter of 2018, primarily due to the deployment of the fourth Sahara unit in April 2018and the fifth Sahara unit in August 2018 while trucking revenue was virtually unchanged despite the decrease in sand sales volumes.

In the third quarter of 2018, Gross Margin decreased by $2.2 million and Adjusted Gross Margin increased by $2.4 million, when compared to the third quarter of 2017. However, during the same period, Gross Margin per MT decreased by $14.14 per MT and Adjusted Gross Margin per MT decreased by $9.36 per MT, primarily due to increased production costs per MT associated with targeted production of sales of specific mesh sizes needed to meet required product sales mix during the quarter. In the third quarter of 2018, sand sales volumes of 40/70 mesh sand increased 4%, or over 148,000 MT, as compared to the third quarter of 2017 which led to higher production costs. Adjusted Gross Margin was $32.64 per MT in the third quarter of 2018 including a $2.30 per MT impact from mine gate sales.

In the nine months ended September 30, 2018 Gross Margin and Adjusted Gross Margin increased by $27.4 million and $36.4 million, or $1.65per MT and $3.47 per MT, respectively, when compared to the nine months ended September 30, 2017 primarily due to a 63% increase in sand volumes and a $13.48 per MT increase in average realized sand prices which more than offset increased production costs. Adjusted Gross Margin was $37.64 per MT for nine months ended September 30, 2018 which includes a $2.07 per MT impact from mine gate sales and a $0.87 per MT impact from the purchase of inventory in the Preferred Acquisition that was acquired at fair value. Adjusted Gross Margin decreased in the third quarter of 2018 from the second quarter of 2018 by $8.2 million, primarily due to the impact of fixed rail car lease costs and increased costs of production combined with a 10% decrease in sand volumes sold.

Three months ended September 30

Nine months ended September 30

($000’s, except MT and per unit amounts)

2018

2017

2018

2017

Gross Margin

$16,667

$18,857

$65,435

$38,005

Cost of Sales – depreciation and depletion

7,189

2,582

16,899

7,950

Adjusted Gross Margin(1)

23,856

21,439

82,334

45,955

Gross Margin/MT

$22.80

$36.94

$29.91

$28.26

Adjusted Gross Margin/MT(1)

$32.64

$42.00

$37.64

$34.17

Percentage of Mine Gate Sand Volumes

6%

10%

9%

8%

Percentage of Sand Volumes Sold in the WCSB

94%

90%

91%

92%

Sales Mix Impact of Mine Gate Sales/MT

$2.30

$0.53

$2.07

$1.36

Impact of Preferred Acquisition Inventory Acquired at Fair Value/MT

$—

$—

$0.87

$—

Notes:

(1)

Adjusted Gross Margin (including on a per MT basis) is not defined under IFRS, see “Non-IFRS Measures” below.

AMENDMENT TO NORMAL COURSE ISSUER BID

Source has applied to the Toronto Stock Exchange (the “TSX”) to amend its previously approved normal issuer bid (“NCIB”) to purchase approximately 1% of its outstanding common shares for cancellation through the facilities of the TSX. Previously, Source was approved to purchase approximately 315,000 common shares; Source has applied to the TSX to have the NCIB amended to permit Source to purchase up to $1.6 million worth of its common shares, which, based on current market prices, would represent a purchase of an aggregate of approximately 615,000 common shares including the 315,000 previously approved. The amendment of the NCIB, the date on which the amended NCIB will commence and the number of common shares that Source will be permitted to purchase for cancellation under the amended NCIB remains subject to TSX review and approval.

THIRD QUARTER CONFERENCE CALL

A conference call to discuss Source’s third quarter financial results has been scheduled for 7:30 am MT (9:30 am ET) on November 1, 2018, for interested analysts, investors and media representatives.

The conference call dial-in details are:

Dial-In Numbers

Participant Passcode

Toll-Free:

1-888-231-8191                

7684349

International:

1-647-427-7450                

7684349

The call will be recorded and available for playback approximately 2 hours after the meeting end time, until December 1, 2018, using the following dial-in:

Playback Number

Passcode

Toll-Free

1-855-859-2056                

7684349

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

IMPORTANT INFORMATION

These results should be read in conjunction with each of Source’s unaudited condensed interim financial statements for the three and nine months ended September 30, 2018, and Source’s audited consolidated financial statements for the year ended December 31, 2017, together with the accompanying notes (the “Financial Statements”) and its corresponding management’s discussion and analysis for such period (the “MD&A”). The Financial Statements and MD&A and other information relating to Source, including the Annual Information Form (“AIF”), is available under the Company’s SEDAR profile at www.sedar.com. The Financial Statements and comparative statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Unless otherwise stated, all amounts are expressed in Canadian dollars.

NON-IFRS MEASURES

In this press release Source has used the terms Adjusted Gross Margin and Adjusted EBITDA, including per MT, which do not have standardized meanings prescribed by IFRS and Source’s method of calculating these measures may differ from the method used by other entities and, accordingly, they may not be comparable to similar measures presented by other companies. These financial measures should not be considered as an alternative to, or more meaningful than, net income (loss), Gross Margin and other measures of financial performance as determined in accordance with IFRS. For additional information regarding Non-IFRS measures, including their use to management and investors and reconciliations to measures recognized by IFRS, please refer to the MD&A, which is available online at www.sedar.com and through Source’s website at www.sourceenergyservices.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may”, “should” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: outlook for operations and sales volumes (including relating to orders and spot sales); industry activity levels (including in the WCSB and particularly with respect to the Montney and Duvernay); rail service; the impact of weather; expectations regarding increased demand for sales volumes of sand in 2018; the continued increase of sand sales volumes and sand spot pricing in 2018; increased sand intensities for Canadian well completions; and the amendment to Source’s NCIB.

By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements

With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: proppant market prices; future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers; the maintenance of Source’s significant contracts or their replacement with new contracts on substantially similar terms and that contractual counterparties will comply with current contractual terms; operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business and any other jurisdictions in which Source may conduct its business in the future; future capital expenditures to be made by Source; future sources of funding for Source’s capital program; Source’s future debt levels; the impact of competition on Source; and Source’s ability to obtain financing on acceptable terms.

A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in rail car availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments.

Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Announces Agreement with Strath Resources Ltd.

TSX: SHLE

CALGARYOct. 24, 2018 /CNW/ – Source Energy Services Ltd. (“Source”) announced today it has entered into a three-year agreement with Strath Resources Ltd. (“Strath”) to provide Strath with Northern White proppant and related logistics services, for its Kakwa area Montneywells. This agreement supports Strath’s development of its liquid rich Kakwa acreage with an efficient and reliable supply of northern white proppant from Source’s Wembley, Alberta terminal.

Brad Thomson, Chief Executive Officer of Source said, “Source is pleased to enter into an agreement with Strath to support its Montneyactivity. By working together, our companies are able to ensure the most efficient delivery of northern white proppant to the wellsite.”

Steve Fagan, President & CEO of Strath said, “Strath’s rapid expansion within the last 18 months has bolstered the company’s commitment to developing our high netback Kakwa asset. By partnering with Source, in support of our continued development, Strath is ensuring it has optimized another key element in the supply chain.”

Source’s Wembley terminal was recently expanded through the addition of a second unit train track. The terminal can now transload over 200,000 metric tonnes of proppant per month, making it Canada’s highest capacity frac sand terminal.

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

ABOUT STRATH RESOURCES LTD.

Strath is a Calgary-based private company focused on the development of its core oil and natural gas asset in the Kakwa area of Alberta’sDeep Basin. It’s positioned for substantial growth of its proven, multi-zone resource in the Montney, Wilrich and Dunvegan zones. Strath’s growth is supported by high working interest and operatorship of more than 400 sections of land, ownership of gas plant and gathering infrastructure, and midstream arrangements that provide for processing, transportation and fractionation of its oil and gas reserves.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: outlook for operations and sales volumes; activity levels and conditions pertaining to the frac sand industry; rail service; expectations regarding increased demand for and sales volumes of sand in 2019 and beyond; and Source’s objectives, strategies and competitive strengths. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements. With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers’ operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business; future capital expenditures to be made by Source; and future sources of funding for Source’s capital program. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in rail car availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Announces Normal Course Issuer Bid

TSX: SHLE

CALGARYOct. 5, 2018 /CNW/ – Source Energy Services Ltd. (“Source” or the “Company”) is pleased to announce that the Toronto Stock Exchange (the “TSX”) has accepted Source’s notice of intention to implement a Normal Course Issuer Bid (the “NCIB”). Source’s Board believes that the purchase of common shares of the Company (the “Common Shares”) at recent market prices is a worthwhile investment since, in its view, recent market prices of Source’s Common Shares do not properly reflect the underlying value of Source’s assets and business.

As of September 30, 2018, there were 61,551,712 Common Shares outstanding; however, pursuant to the indenture for Source’s 10.5% senior secured first lien notes due December 15, 2021 (the “Notes”), the number of Common Shares that can be acquired under the NCIB at this time is approximately 315,000 Common Shares. The average daily trading volume of Source’s Common Shares from April 1, 2018 to September 30, 2018 was 66,378 Common Shares (“ADTV”). Accordingly, pursuant to the rules of the TSX, the maximum number of Common Shares that the Company may repurchase in any one day is 25% of the ADTV, which totals 16,594 Common Shares. Source may also make one block purchase per calendar week which exceeds the daily repurchase restriction.

The NCIB will commence on October 10, 2018 and will terminate on the earlier of: (i) October 9, 2019; and (ii) the date on which the maximum number of Common Shares are purchased pursuant to the NCIB. Purchases of Common Shares under the NCIB will be effected through the facilities of the TSX, other alternative trading platforms or any other exchange recognized or designated by the securities regulatory authorities as a “designated exchange” as such term is defined in Multilateral Instrument 62-104 – Take Over Bids and Issuer Bids, at the market price at the time of purchase. Common Shares purchased pursuant to the NCIB will thereafter be cancelled.

Scotia Capital Inc. (“Scotia”) will be the broker firm responsible for making purchases of Common Shares under the NCIB on behalf of Source pursuant to an automatic share repurchase plan agreement dated as of October 4, 2018 between Source and Scotia (the “Agreement”). Concurrent with entering into the Agreement, Source provided Scotia with a certificate, executed by an officer of Source, confirming that Source is aware of the Agreement and that to the best knowledge of such officer, there is no material undisclosed information regarding Source. Pursuant to the Agreement, the timing for the purchase of Common Shares, the number of Common Shares purchased and the price payable for the Common Shares will be determined by Scotia in its sole discretion, without consultation with Source, having regard to the price limitations and other terms of the Agreement and the rules of the TSX.

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to future events, which include statements regarding Source’s intentions or expectations with respect to the NCIB and any Common Share repurchases thereunder as well as results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: its NCIB, its outlook for operations and sales volumes; and industry activity levels. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements. With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: proppant market prices; future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers; the maintenance of Source’s significant contracts or their replacement with new contracts on substantially similar terms and that contractual counterparties will comply with current contractual terms; operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business and any other jurisdictions in which Source may conduct its business in the future; future capital expenditures to be made by Source; future sources of funding for Source’s capital program; Source’s future debt levels; the impact of competition on Source; and Source’s ability to obtain financing on acceptable terms. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in railcar availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Announces Sand Sales Volumes for its Third Quarter and Upcoming Earnings Release Date

TSX: SHLE

CALGARYOct. 4, 2018 /CNW/ – Source Energy Services Ltd. (“Source”) announced that its sand sales volumes for the third quarter of 2018 were 726,000 metric tonnes (“MT”). Approximately 94% of these sales were made through Source’s Canadian distribution network and the majority utilized Source’s last mile logistics services where Source delivered sand directly to customers’ wellsites. This brings Source’s 2018 nine-month sales volumes to 2,182,000 MT.

While Source’s quarter over quarter Canadian sand sales volumes were largely unchanged from Q2 to Q3, the 11% decline in sales volumes was primarily due to a reduction in Source’s US based mine gate sales.

Looking ahead to the fourth quarter of 2018, Source expects that exploration and production (E&P) companies will conservatively manage their remaining 2018 capital spending programs. This has led Source to lower its fourth quarter sales volume expectations.

As we move into 2019, Source expects that WCSB activity levels will substantially improve from Q4 of 2018. The addition of Montney and Duvernay customer contracts, refreshed capital budgets from E&P companies and continued positive economics for Montney and Duvernayproduction provide Source with confidence that its 2019 sales volumes will exceed those seen in 2018. Once Source’s E&P customers’ capital budgets are finalized, Source will have better certainty as to the amount of growth that might be expected. Source will also have a better view of the impact of the recent LNG Canada announcement on 2019 WCSB completion activities.

Sand sales volumes as reported in this announcement consists of a combination of sales made through Source’s Canadian distribution chain, at customers’ wellsites and at Source’s mines. Source cautions that in addition to the location of sand sales, numerous other factors can impact Source’s operating results and that a particular trend in total sales volumes may, or may not, indicate a trend in, or be indicative of, Source’s financial performance. Source intends to continue to provide updates on sales volumes shortly after the end of each quarter.

Source is also pleased to announce that its third quarter financial results for the period ending September 30, 2018, will be released following the Toronto Stock Exchange market close on October 31, 2018. A conference call has been scheduled for 7:30 am MST (9:30 am EST) on November 1, 2018 for interested analysts, investors and media representatives.

The third quarter financial results conference call dial-in details are:

Dial-In Numbers  

Participant Passcode

Toll-Free:

1-888-231-8191

7684349

International:

1-647-427-7450

7684349

 

The call will be recorded and available for playback approximately 2 hours after the meeting end time, until December 1, 2018, using the following dial-in:

Playback Number   

Passcode

Toll-Free:  

1-855-859-2056

7684349

 

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: outlook for operations and sales volumes; industry activity levels; rail service; the impact of weather; expectations regarding increased demand for and sales volumes of sand in 2018 and 2019; a decrease of sand sales volumes and sand spot pricing in the remainder of 2018; and continued use of increased sand intensities for Canadian well completions in 2019. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements. With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: proppant market prices; future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers; the maintenance of Source’s significant contracts or their replacement with new contracts on substantially similar terms and that contractual counterparties will comply with current contractual terms; operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business and any other jurisdictions in which Source may conduct its business in the future; future capital expenditures to be made by Source; future sources of funding for Source’s capital program; Source’s future debt levels; the impact of competition on Source; and Source’s ability to obtain financing on acceptable terms. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in rail car availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications, Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Updates Previously Announced Duvernay Agreement to Name Shell Canada Energy as the Customer

TSX: SHLE

CALGARYSept. 18, 2018 /CNW/ – Source Energy Services Ltd. (“Source”) is updating its September 11, 2018 announcement that it had entered into an agreement with a multinational exploration and production company to name Shell Canada Energy (“Shell”) as the customer. Under the three-year agreement Source will provide Shell with Northern White frac sand for its Duvernay wells. The committed service agreement will commence January 1, 2019 and can be extended beyond the initial term of the contract to support Shell’s growing Canadian operations.

The contract will be served from Source’s Fox Creek, Alberta terminal, which currently features approximately 35,0000 tonnes of storage capacity and an annual through-put capacity of over 1 million tonnes per year. As part of the contract with Shell, Source will be expanding its storage capacity at Fox Creek in early 2019.

Brad Thomson, Chief Executive Officer of Source said, “As a leading supplier of high quality Northern White frac sand to operators in the WCSB, Source is excited to support Shell’s operations in the Duvernay. With this agreement, Shell will be able to move into manufacturing mode with a reliable supply of high quality proppant.”

He went on to say, “Source’s Fox Creek terminal provides supply certainty which is essential for operators interested in transitioning their activity from delineation to development. The scale of the terminal also allows us to economically deliver Northern White frac sand at a price that competes with other less reliable frac sand supply alternatives.”

James Goodall, CP Manager Unconventional Wells at Shell said, “Shell is looking forward to embarking on a multi-year strategic relationship with Source. We believe that by working directly with mining companies, such as Source, this can provide Shell with a more competitive well completion cost and security of supply.”

The Shell contract is Source’s third long term frac sand supply contract with a major operator with accelerating activity in the Duvernay

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: outlook for operations and sales volumes; industry activity levels; rail service; the impact of weather; expectations regarding increased demand for and sales volumes of sand in 2019 and beyond; and the continued increase of sand sales volumes. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements. With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business; future capital expenditures to be made by Source; and future sources of funding for Source’s capital program. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in railcar availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)

Source Energy Services Announces New Duvernay Agreement That Will Support Expansion of Fox Creek Terminal

TSX: SHLE

CALGARYSept. 11, 2018 /CNW/ – Source Energy Services Ltd. (“Source”) announced today it has entered into a three-year agreement with a multinational exploration and production company to provide Northern White frac sand for its Duvernay program. The take or pay agreement will commence January 1, 2019 and allows for the customer and Source to expand volumes to further support the customer’s growing Canadian operations.

The contract will be serviced from Source’s Fox Creek, Alberta terminal. Featuring a current storage capacity of approximately 35,000 tonnes and an annual through-put capacity of over 1 million tonnes, Source’s Fox Creek terminal is ideally located to service the customer in the Duvernay. As part of the contract, Source will be expanding its storage capacity at Fox Creek in early 2019.

Brad Thomson, Chief Executive Officer of Source said, “As a leading supplier of high quality Northern White frac sand to operators in the WCSB, Source is excited to support another company’s operations in the Duvernay. With this agreement, the customer will be able to move from delineation to development with a reliable supply of high quality proppant.”

He went on to say, “We’re thrilled that another significant operator has chosen Source’s Northern White sand for its program for the next 3-5 years. Source’s scale and industry leading logistics allows us to economically deliver the highest quality frac sand to operators throughout the WCSB.”

The contract is Source’s third long term frac sand supply contract with a major operator accelerating completion activities in the Duvernay.

ABOUT SOURCE ENERGY SERVICES

Source is a fully integrated producer, supplier and distributer of high quality Northern White frac sand primarily to the WCSB. Source provides its customers with a full end-to-end solution through its mines, processing facilities, rail assets, strategically located terminal network and “last mile” logistics operations. In addition, Source provides storage and logistics services for other bulk oil and gas well completion materials that are not produced by Source. Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their growing requirements for frac sand and other bulk completion materials.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements relating to, without limitation, expectations, intentions, plans and beliefs, including information as to the future events, results of operations and Source’s future performance (both operational and financial) and business prospects. In certain cases, forward-looking statements can be identified by the use of words such as “expects”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “plans”, “seeks”, “projects” or variations of such words and phrases, or state that certain actions, events or results “may” or “will” be taken, occur or be achieved. Such forward-looking statements reflect Source’s beliefs, estimates and opinions regarding its future growth, results of operations, future performance (both operational and financial), and business prospects and opportunities at the time such statements are made, and, except as may be required by law, Source undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or circumstances should change. Forward-looking statements are necessarily based upon a number of estimates and assumptions made by Source that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Forward-looking statements are not guarantees of future performance. In particular, this press release contains forward-looking statements pertaining, but not limited, to: outlook for operations and sales volumes; industry activity levels; rail service; the impact of weather; expectations regarding increased demand for and sales volumes of sand in 2019 and beyond; the continued increase of sand sales volumes. By their nature, forward-looking statements involve numerous current assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Source to differ materially from those anticipated by Source and described in the forward-looking statements With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: future oil, natural gas and natural gas liquids prices; future global economic and financial conditions; future commodity prices, demand for oil and gas and the product mix of such demand; levels of activity in the oil and gas industry in the areas in which Source operates; the continued availability of timely and safe transportation for Source’s products, including without limitation, rail accessibility; the maintenance of Source’s key customers and the financial strength of its key customers operating costs; that the regulatory environment in which Source operates will be maintained in the manner currently anticipated by Source; future exchange and interest rates; geological and engineering estimates in respect of Source’s resources; the recoverability of Source’s resources; the accuracy and veracity of information and projections sourced from third parties respecting, among other things, future industry conditions and product demand; demand for horizontal drilling and hydraulic fracturing and the maintenance of current techniques and procedures, particularly with respect to the use of proppants; Source’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which Source conducts its business; future capital expenditures to be made by Source; future sources of funding for Source’s capital program;. A number of factors, risks and uncertainties could cause results to differ materially from those anticipated and described herein including, among others: the effects of competition and pricing pressures; risks inherent in key customer dependence; effects of fluctuations in the price of proppants; risks related to indebtedness and liquidity, including Source’s leverage, restrictive covenants in Source’s debt instruments and Source’s capital requirements; risks related to interest rate fluctuations and foreign exchange rate fluctuations; changes in general economic, financial, market and business conditions in the markets in which Source operates; changes in the technologies used to drill for and produce oil and natural gas; Source’s ability to obtain, maintain and renew required permits, licenses and approvals from regulatory authorities; the stringent requirements of and potential changes to applicable legislation, regulations and standards; the ability of Source to comply with unexpected costs of government regulations; liabilities resulting from Source’s operations; the results of litigation or regulatory proceedings that may be brought against Source; the ability of Source to successfully bid on new contracts and the loss of significant contracts; uninsured and underinsured losses; risks related to the transportation of Source’s products, including potential rail line interruptions or a reduction in rail car availability or the impact of weather; the geographic and customer concentration of Source; the ability of Source to retain and attract qualified management and staff in the markets in which Source operates; labour disputes and work stoppages and risks related to employee health and safety; general risks associated with the oil and natural gas industry, loss of markets, consumer and business spending and borrowing trends; limited, unfavourable, or a lack of access to capital markets; uncertainties inherent in estimating quantities of mineral resources; sand processing problems; and the use and suitability of Source’s accounting estimates and judgments. Although Source has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in its forward-looking statements, there may be other factors, including those described under the heading “Risk Factors” in the AIF, that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will materialize or prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers should not place undue reliance on forward-looking statements. These statements speak only as of the date of this press release. Except as may be required by law, Source expressly disclaims any intention or obligation to revise or update any forward-looking statements or information whether as a result of new information, future events or otherwise.

SOURCE Source Energy Services

For further information: Media inquiries: Annie Dormuth, Communications Advisor, (403) 262-1312 (ext. 295), adormuth@sourceenergyservices.com; Investor relations inquiries: Brad Thomson, Chief Executive Officer, (403) 262-1312 (ext. 225)