Source Energy Services assumes operation of Peace River domestic frac sand mining facility

Source Energy Services Canada LP assumed all operations, distribution and sale of domestic frac sand at the Peace River mining facility from Canadian Silica Industries Inc. and Contractor’s Leasing Corp. (CSI).

Frac sand gets its name from its use in hydraulic fracturing, a method used to produce natural gas, natural gas liquids, and oil from unconventional sources such as shale.

Source entered into an operating lease, mining services agreement and silica sand purchase agreement with CSI which, among other things includes:

i. Adding 400,000 metric tonnes of domestic frac sand production capability to Source’s existing portfolio of Northern White frac sand and other products.

ii. Consolidating CSI’s existing Peace River mining facility with Source’s adjacent mineral resource exploration rights, enabling production efficiencies coupled with a long-life resource.

iii. Facilitating the integration of Peace River frac sand into Source’s leading distribution network to enable production efficiencies, resulting in low-cost domestic production with significant logistical advantages.

iv. Providing a supply of frac sand that is not rail dependent, reducing the risk of disruptions due to rail outages.

The transaction adds important domestic frac sand supply to Source, which, along with Source’s supply of Northern White frac sand, enhances the company’s ability to serve its clients effectively and efficiently.

Norton Rose Fulbright (Calgary) acted as legal advisor to Source, with a team led by Kirk Litvenenko (Business Law) and supported by Michael Bolitho (Real Estate), Marlow Gereluk (Banking), Tom Collopy (Business Law), Alan Harvie (Business Law), Darren Hueppelsheuser (Tax), Christina Winger (Banking), and Tom Savery (Business Law).

Fasken Martineau DuMoulin LLP served as legal advisors to CSI, with a team led by Scott Whitby (Business Law), with support from Larissa Svekla (Real Estate), Allison Sears (Regulatory), Andrew Dixon (Employment), Clarke Barnes (Tax) and Andrew Burt (Banking).