brown sand

[bigtex]

Dan reading the couple of articles you have posted on sand, it appears that drillers are moving to brown sand found in the south which is cheaper and less transportations costs. that may not bode well for emes or hclp but instead benefit scla far more????

[setliff]

i got that, too.

[dan_s]

I'm sure that Laura Fulton will be asked that question at next week's luncheon.

If oil prices go where I think they are heading, demand for frac sand will be so high that it won't matter.

[dan_s]

I went back and looked at the presentation that TPH made on June 3. Here are their summary points.

> The power of collaboration: Following up on our two recent FMSA / frac sand demand reports, we caught up with our E&P brethren and began digging further into proppant intensity, drilling efficiencies, and rig count / well count by basin in the upcycle. We went basin by basin and analyzed lateral lengths, proppant loadings and days-to-drill.
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> Proppant per well biased materially higher: After digging into the data, we’re increasingly convinced that proppant loadings per well could grow substantially as operators increase lateral length and push proppant per lateral foot well above current levels…and dramatically higher vs. 2014 levels.
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> Basin activity thoughts: As activity begins to migrate higher, we believe the Permian, in particular the Delaware, soaks up much of the incremental rig activity. Proppant loadings in this play are well behind that of the Midland Basin. Other material step changes in per well sand demand are likely to occur in the Delaware, Midland, STACK/SCOOP, and Eagle Ford Basins.
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> Demand potential highlights: Our initial assumptions in our prior two reports that drove our sand demand model showed 2018 demand eclipsing 2014 levels, but should sand intensity climb towards the quantities we believe operators desire (and are headed towards), 2017 demand could be well above 2014 levels and 2018 sand demand could end up ~2x 2014 levels.
Fun fact: We could see 2017 demand from just the Delaware and Midland Basins approximate 50% of overall 2014 US frac sand demand.
Proppant per horizontal well: We believe average per horizontal well proppant loadings could conceivably climb from ~8mmlbs today to ~11mm lbs in 2017 with further upside 2018+.
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> Logistics issues on the come? This level of demand would almost certainly lead to deliverability / logistics issues across the oil & gas space as operators struggle to get their hands on enough sand to prosecute their high intensity frac driven field development plans. < This is where HCLP may have a big advantage. Go to their website and take a look at their extensive sand delivery network.