Frac sand set to surge. "Oil and gas companies using hydraulic fracturing are expected to continue to ramp up their use of frac sand in their drilling operations. According to Tudor Pickering Holt, drillers have stepped up sand use in order to make wells more productive, rising from 3 million pounds per well in 2013 to 5 million pounds per well in 2014, to 8 million pounds per well this year. That should continue to rise to about 11 million pounds per well in the near future as drilling picks up pace. On the high end, some producers are even using 15 to 20 million pounds per well in the Permian, and 30 to 50 million pounds per well in the Haynesville. Tudor Pickering Holt says that frac sand miners, many of which are found in Wisconsin, should benefit from the trend."
Top Picks in this space:
Hi-Crush Partners LP (HCLP), the low-cost producer of Northern White frac sand which should be in position to start making quarterly distributions to unit holders within a year.
Fairmount Santrol Holdings Inc. (FMSA) < This is TPH's top pick
Emerge Energy Services LP (EMES)
U.S. Silica Holdings, Inc. (SLCA)
Select Sands Corp. (SNS.V) < This start-up is HIGH RISK, but may have perfect timing as they ramp up production in 2017
Frac Sand Demand
Frac Sand Demand
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group