Update On Fracking Sand -- August 21, 2017

For newbies, the trends regarding fracking tight oil wells:

• over the past two years, there was increased excitement and talk about huge fracks -- tens of millions of pounds of proppant (sand plus ceramic [man-made "sand"])
• early in the Bakken boom, one million lbs of sand in a typical frack
• BEXP broke the mold; moved early on to 4 million lbs of sand
• concerns about "stability" of sand under all that underground pressure, led to ceramics
• ceramics: very, very expensive
• sand: availability somewhat constrained; EOG took the lead, buying its own sand mines (upper midwest)
• in the Bakken, EOG pushed the envelope with huge fracks using 10 million lbs of sand; sometimes as much as 20 million lbs; it's my impression that EOG uses sand (almost?) exclusively, no ceramics
• then in the past couple of years, particularly in the Permian, operators talked about using huge amounts of sand
• I did not see that much increase in sand usage per well in the Bakken during same time period (there were exceptions -- again, mostly EOG)
• about two years ago, there was increased talk about the price of sand going parabolic due to shortages (early analyst to note this: Mike Filloon; that happened to some extent but I never considered it a "big" deal
• lately, it seems interest in ever-larger uses of sand has peaked
• all that talk about high price for sand may be tempered by all the sand mines being opened in the Permian, west Texas
• it appears that operators are backing away from ceramic; too expensive (relative to sand) and the argument that ceramic is better than sand may not be holding up 

That's how I see it. Others will differ in their overview.

A week or so ago, a reader sent me a link with regard to "sand mines in Texas." For various reasons I did not post the article at that time. Today, a link to a story on Texas sand from The Emergent Group. Data points:

• 1H17: 15 sand mines permitted or approved by Texas regulators
• in the heart of the Permian: in and around Winkler County, TX
• large public companies involved: US Silica, Hi-Crush, Fairmount Santrol
• Hi-Crush: 3 million tons -- nameplate capacity
• Fairmount Santrol: 3 million tons annually of primarily 100 mesh sand
• private companies include Unimin (not to be confused with Eminem), Preferred Sands
• Preferred Sands: to open three mines in Texas; will bring total capacity to 9.6 million tons
• where will the growth be? Trucks; rail will NOT be involved
• Permian Basin: approaching 2,000 lbs of proppant per lateral foot (9,000 feet x 2,000 lbs = 18 million lbs per frack)

A couple of other notes for newbies: older wells will be re-fracked, and going forward, there will be a new progression of fracking --

• initial huge frack
• re-fracks of wells drilled using older completion strategies; in the Bakken, the majority of wells drilling before 2010 probably candidates for a full re-frack
• mini-re-fracks during work-over of existing wells drilled after 2012 that were originally fracked with newer strategies; these mini-fracks could occur on a regular basis every five years or so
• major re-fracks: every five to ten years
• completion strategies to include evaluation of neighboring wells

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Katie Ledecky visiting the grandfather Hagan farm near Williston.