Frac Sand Industry

[petrohawk]

Excellent article on the history of the Frac Sand industry and where it stands today:
https://www.worldoil.com/magazine/2019/ ... t-industry

[dan_s]

That is an outstanding article. Just remember that "they call them cycles for a reason". When oil prices "cycle back up" and they will, we are going to need a heck of a lot of frac sand to meet demand for oil.

I see the frac sand companies as being like the onshore drilling rig companies (HP, PTEN, NBR). During the boom times they kick ass and lots of smaller drilling companies start up. In the bust times the smaller companies all go away and the established companies pick up market share.

Take a look at SOI and HCR. They are focusing now on the last mild delivery and systems to manage all that sand at the wellsite. That is all SOI does and it they are extremely profitable. HCR has struggled, but they will survive. Their business model is evolving and they have established good relationships with big upstream companies.

[mkarpoff]

To say they will survive isn't much of an investment endorsement. I don't know why you bother with the company.

[dan_s]

Note that HCR is not in any of our model portfolios. I just get a lot of questions about it. Again: "They call them cycles for a reason". To meet global demand for oil & gas we are going to need A LOT MORE FRAC sand in the future.

[cviller]

You get a lot of questions about it because you were extremely positive about it. At one time you said it was your largest position. People who otherwise wouldn't have heard of it invested in it.