Monday -- March 23, 2015

Active rigs:

	3/23/2015	03/23/2014	03/23/2013	03/23/2012	03/23/2011
Active Rigs	107	198	187	206	171

RBN Energy: update on the fracking sand industry.

Last year was a banner year for the sand mining companies that cater to the U.S. shale drilling services industry. That’s because in 2014 well operators significantly increased the amount of sand used to complete fracturing operations in shale plays – from an average of about 5 MMlb for a single well to 15 MMlb (7,500 tons) or more. In 2015 however, the stock prices of frac sand producers has plunged in response to lower oil prices, producer drilling budget cutbacks and falling rig counts – signaling the industry is on the ropes. Today we describe how sand producers may be in better shape than expected.

Hydraulic fracturing (fracking) and horizontal drilling are the two technologies most responsible for the boom in extracting oil, natural gas and natural gas liquids from hydrocarbon bearing shale deposits over the past 8 years.

These techniques involve high pressure stimulation using water and proppant (usually sand) to create small cracks in tight shale rock that allow oil and gas trapped in the formation to flow more easily into the well and up to the surface. When the water pressure is released, the fractures attempt to close but the proppant contained in the fluid keeps them open, making a ready path for oil and gas to flow into the well. Once a well is drilled vertically into the shale, horizontal laterals are drilled out in different directions and fracking is carried out in multiple stages along the laterals. We have previously discussed the scale of activity surrounding getting supplies and equipment  (water, sand, pumps, machinery etc.) to well sites that are often remote – a process that has become a complex transport and logistics challenge.

We also described the sources and use of different frac sand proppants back in August 2013. In short, three primary types of proppant are used in fracking; raw frac sand – generally mined at the surface, resin coated sand that has been treated to increase it’s strength and ceramic beads that are manufactured (usually from clay) to withstand greater pressure. The most popular proppant (85% of the market) is raw sand and the best grade of sand preferred by well operators is Northern White - found predominantly in Wisconsin. Sand quality for fracking is very important and is measured by particle size, shape (roundness) and crush resistance using standards set by the American Petroleum Industry (API).

Much more at the link. There are some important data points in that article.