Fracking Sand Company Sees Its Stock Almost Halve On Big Customer Loss
The oil patch has become so depressed that a company that supplies frac sand saw its stock drop almost in half Nov. 11, after it said it may not be able to continue as a "going concern." Carbo Ceramics (NYSE: CRR ), a Houston-based manufacturer of proppants, the industry name for frac sand, said in its third-quarter earnings that its largest frac sand client "intends to discontinue purchase of frac sand under our current contract," Carbo President and CEO Gary Kolstad said in a conference call with investors. The identity of the buyer was not revealed. "We are in discussions with this client to determine if there's an agreeable alternative to this matter," Kolstad said, according to a transcript of the earnings call supplied by Seeking Alpha. The problem for the company is not only the loss of the revenue stream from the client, Kolstad said. It is also that the contract with the buyer "covered significant fixed costs associated with our distribution facility and railcar leases." It was in the company's press release about the earnings that the issue of Carbo remaining a "going concern" was raised.
Fracking Sand Company Sees Its Stock Almost Halve On Big Customer Loss
The oil patch has become so depressed that a company that supplies frac sand saw its stock drop almost in half Nov. 11, after it said it may not be able to continue as a "going concern." Carbo Ceramics (NYSE: CRR ), a Houston-based manufacturer of proppants, the industry name for frac sand, said in its third-quarter earnings that its largest frac sand client "intends to discontinue purchase of frac sand under our current contract," Carbo President and CEO Gary Kolstad said in a conference call with investors. The identity of the buyer was not revealed. "We are in discussions with this client to determine if there's an agreeable alternative to this matter," Kolstad said, according to a transcript of the earnings call supplied by Seeking Alpha. The problem for the company is not only the loss of the revenue stream from the client, Kolstad said. It is also that the contract with the buyer "covered significant fixed costs associated with our distribution facility and railcar leases." It was in the company's press release about the earnings that the issue of Carbo remaining a "going concern" was raised.