frac sand

[par_putt]

from oilprice.com


Shale drillers using less frac sand. After a steep rise in the use of frac sand, shale drillers are cutting back. More sand has been used to drill longer laterals and extract more gas per well. However, Reuters says that the industry is on track to see frac sand use decline in the second and third quarters. Part of the reason is the spike in frac sand prices, which has pushed up costs for oil producers. As a result, drillers are tweaking their well designs to use less sand. Halliburton (NYSE: HAL), for example, reported in July its first decline in the average sand use per well. Frac sand accounts for about 12 percent of the cost of a drilling and fracturing, Reuters says. For sand miners, this development is not good – if drillers cutback at a time when sand mines are expanding, prices could crash.

[dan_s]

Frac sand demand did not decline in the second quarter. I follow a lot of upstream companies and I have not noticed a decline in the frac sand they are using to complete wells. Completions may decline a bit in Q3, but I doubt that the sand per well will decline.

A few upstream companies might try using less sand.