Source Energy Services

Source Energy Services

June 02, 2014 12:03 ET

Source Energy Services Opens Weyerhaeuser Frac Sand Facility

CALGARY, ALBERTA--(Marketwired - June 2, 2014) - Source Energy Services (US) LP ("Source"), celebrated the opening of its frac sand production, storage, and rail car loading facility located in Weyerhaeuser, Wisconsin on May 30th, 2014. Several local officials attended the ribbon cutting and community appreciation event, including those from Barron County, the Village of Weyerhaeuser, and the Town of Sumner. The Weyerhaeuser facility complements the frac sand mine and processing facility operated by Source in the town of Sumner.

The Weyerhaeuser facility now enables Source to load unit trains of frac sand destined for regions with active oil and natural gas exploration and development. The unit trains will utilize CN's North American rail network allowing sand to be shipped across America or to the Western Canadian Sedimentary Basin ("WCSB"). The first unit train consisting of over 90 rail cars departed Weyerhaeuser after the ceremony and is headed to the oil fields in Western Canada.

The facility hosts over 50,000 tons of storage and has the ability to load more than 100 rail cars in a 24 hour period of time. The new Weyerhaeuser facility will receive sand from Source's mine and sand processing facility located nearby in the town of Sumner. Together, the plants are designed to produce and ship over 2.0 million tons per year of the highest quality northern white frac sand.

Scott Melbourne, VP Operations, for Source Energy Services, explained that with the assistance of the Village of Weyerhaeuser and local contractors and suppliers, the state-of-the- art sand processing, storage, and railcar loading facility was completed in record time. "Construction on the Weyerhaeuser project started in the fall of 2013, and by December the first load of sand had already been shipped. It was impressive to complete a facility of this magnitude during one of the coldest winters on record, "says Melbourn. The facility is now one of the largest frac sand processing and frac sand storage and rail loading operations in North America.

"We've been fortunate to have the support from the residents of the Village of Weyerhaeuser, the town of Sumner as well as the Rusk and Barron counties. We couldn't have built our facilities without the cooperation we've experienced and we look forward to running a business that will bring good things to the region for years to come." Specifically, Source's Weyerhaeuser and Sumner facilities contribute to the local economy by employing more than 75 local residents. "Unlike other frac sand plants in the region," says Melbourn, "we'll endeavor to operate 12 months a year while providing a safe and stable work environment to our employees."

Brad Thomson, President and CEO of Source Energy Services, added that the Weyerhaeuser and Sumner operations are a part of an integrated service offering being provided to Source's customers. "Today's oil and gas industry requires that the supplier distribute huge volumes of frac sand to some of the most remote regions of the continent," says Thomson. "With our Wisconsin facility, we have the ability to produce the highest quality frac sand and by partnering with CN, we're able to transport frac sand into our high volume frac sand distribution network. In this way, we can ensure that our customers will always have frac sand…where they need it...when they need it."

A key component of the transportation of Source's frac sand is the partnership with CN. CN will transport over 100 rail cars of sand at a time from the Weyerhaeuser facility to destinations such Wembley, Alberta, over 1700 miles away.

JJ Ruest, CN Executive Vice President and Chief Marketing Officer said, "We are pleased to be working with Source Energy Services on the efficient movement of frac sand across North America. We are focused on operation and service excellence by balancing the right mix of efficiency, safety, and customer service. As a result, we are confident that we will be able to allow customers such as Source to become more competitive in their end markets. Our origin- to-destination service mindset is consistent with the objectives of Source Energy Services."

About Source Energy Services

Source Energy Services is a private limited partnership that is an integrated supplier and distributor of high quality proppants in the United States and Canada. Source produces a high- quality monocrystalline silica sand, Source White, from its Sumner and Weyerhaeuser facilities in Wisconsin. The Source Energy Services distribution network is one of the most extensive frac sand distribution networks in North America, with a number of terminals in the WCSB and the Eagle Ford.

About CN

CN (TOR:CA:CNR) (NYSE;CNI) transports approximately $250 billion worth of goods annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network spanning Canada and mid-America. CN - Canadian National Railway Company, along with its operating railway subsidiaries serves the ports of Vancouver, Prince Rupert, Montreal, Halifax, New Orleans and Mobile Alabama. CN also serves the cities of Toronto, Edmonton, Winnipeg, Calgary, Grande Prairie, Chicago, Memphis, Detroit, Duluth Minnesota, Superior Wisconsin and Jackson Mississippi.

Forward-Looking Statements

Some of the information in this news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements give our current expectations, and contain projections of results of operations or of financial condition, or forecasts of future events. Words such as "may," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "plan," "estimate," "anticipate," "could," "believe," "project," "budget," "potential," or "continue," and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. You are cautioned not to place undue reliance on any forward-looking statements.

Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include: the volume of frac sand we are able to sell; changes in the demand for frac sand; changes in prevailing economic conditions, or, changes in CN's ability to transport frac sand. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. Source Energy Services forward-looking statements speak only as of the date made and Source Energy Services undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

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