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SNS.v Select Sands C$1.47

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By Bobwins

Posted: Thursday May 4 8:28:36AM 2017

SNS.v  -.11 to C$1.16   sold out of SNS yesterday at C$1.30.  Oil is falling on rising US production.  Even if OPEC extends, US producers can overcome any cuts by increasing rig counts and drilling activity in the Permian Basin.  Production continues to increase in the Permian and the new well completion techniques that they use in the Permian can also reduce costs and increase production in other US shale plays so other basins could increase production, too.  I still think SNS.v has an advantage but market is running from oil plays and the sand producers.  Will live to fight another day and hopefully find a good stock with good industry fundamentals next time instead of a good stock with weak sector support.  

By Bobwins

Posted: Thursday Apr 13 2:50:37PM 2017

SNS.v  +.22 to C$1.77

Select Sand got an initial resource estimate for their new sand property.  Market liked it.  

By Bobwins

Posted: Tuesday Mar 28 4:51:16PM 2017

Here is a Seeking Alpha article about Select Sands, a fracking sand startup that announced a significant supply agreement recently.  The author is on the board and bought shares very cheaply so isn't objective but makes a good case for SSN.v.

By Bobwins

Posted: Monday Mar 20 8:37:29AM 2017

I re read the supply agreement PR.  PR doesn't give pricing and they probably had to give a discount for the early commitment but potentially this agreement is for a significant amount of the plant volume.  As configured, the plant had an annual output of 600K tonnes of sand per year.  This agreement calls for up to 1 million tonnes per year by 2019.  There was a plan to expand output to 1.5 million tonnes by the end of 2017 so that must have been put in place.  Quarterly report for Q2 should be interesting.  Plant will be in rampup stage and costs will probably be high but we should get an indication of whether they can show ebidta at this early stage of production.  Frack sand has become more and more important to completion technology, with total sand used per completion/well doubling and tripling in the last several years.  

SNS plant is 650 miles closer than Wisconsin competitors, giving them a transport cost advantage of $5-10/tonne.  As drilling increases in US, frack sand will likely go up in price, improving the business case for SNS.  

I nibbled on a few more shares at C$1.65.  Should have waited as price is now fading but my avg cost is still 1.56 so only raised by a couple of pennies.  If SNS becomes profitable and gets priced like their US competitors, this could still grow by up to 6X.  May take a few years but the founder's plans appear to be coming true.  

By Bobwins

Posted: Friday Mar 17 6:50:53AM 2017

Select Sands is a Keith Schaefer pick.  This is a US based new startup in Arkansas providing fracking sand to drillers and oil field services companies.  Today they announced their first supply contract.

Their business case is that they have the type of sand that the industry wants, smaller fine mesh sand that withstands high pressures.  They are closer to the Texas, Oklahoma areas that contain all the high return shale areas like the Permian and SCOOP and STACK.  Transport costs are a big part of the cost of sand.  Arkansas is many hundreds of miles closer than the current source of most frack sand in Wisconsin.  

Approximately 94 million shares outstanding fully diluted.  Current market cap around C$139million.  Quite high for a startup but competitors are valued in the billions.  

I have a small positiion at C$1.53.

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