I was perusing Murray Roth’s recent presentation “Unconventional Oil and Gas: Implications for Global Field Development” and it made a pretty bold statement that I figured was worthy of discussion all on its own.
What is the greatest driver of oilfield innovation and value in the 21st Century?
Sand.
Without sand, or more generally proppant, there is no hydraulic fracturing, without hydraulic fracturing there is no opening of tight oil and gas plays, there is no economic advantage to horizontal drilling, there is no rise of pad drilling.
Proppant is “sand or similar particulate material suspended in water or other fluid and used in hydraulic fracturing (fracking) to keep fissures open.” (from Wiktionary)
Although hydraulic fracturing was first performed in 1947 (in Kansas, using sand from the Arkansas river), wide-spread experimentation didn’t occur until the Barnett Shale play in the 80s, and usage has exploded in the first decade of this century.
Initially, proppant was simply sand, but over time other materials have been incorporated. There are resin-coated sands, ceramic-coated sands, and now we have proppant composed of sintered (powdered) bauxite – tiny manufactured rocks!
Source: https://images.sdsmt.edu/learn/speakerpresentations/Kullman.pdf
By integrating these other materials into the proppant we are able to vary some key properties:
By adjusting these properties we can create the optimum pathways for the extraction of hydrocarbons. Some important measured qualities of proppant are:
Downholetrader.com has a variety of fracking sands up for trade; all pretty much at least a couple of pennies per pound. This week, 20/40 Mesh Finished Black Gold Sand with a 7k crush in North Dakota is going for $.13/lb.!
Source: https://downholetrader.com/#2040
A lot. The first experiments in the 1940s used around 150 pounds of sand, but now it’s around 5 million pounds per well.
So, if you are in the Eagle Ford and are looking for a 20/40 mesh and your buddies are all speaking highly of “Antioch Sand” you can expect to spend $.056 * 5,000,000 = $280,000 on sand! And that means the proppant industry is definitely up and to the right – 57 billion lbs in 2012 = $BIG!
Source: https://www.cadreproppants.com/files/shaletech_cadreproppants_new.pdf
Also, notice the market is 80% sand with the other 20 percent split between resin coating and ceramics.
I am not really qualified to tell you that, but I will say that I have been learning a lot about how proppants are being used in the field by looking at fracfocus.org.
Source: FracFocus.org
Logistics. These are huge quantities of sand that need to be shipped to your well site when you’re ready for them – you don’t have room to store them, and can’t risk contamination. And even if it’s just across Texas, distances can be quite long.
If you’re thinking about proppant business, you need to know where the rigs are, because as the rigs move, so will the proppant trucks soon thereafter.
If you decide to go on a field trip and visit one of your favorite operators to see how they are using proppant, you can save valuable windshield time with the brand new Rigs Mobile app for the iPhone.
What do you think? What types of proppant are you seeing in your operations? Leave a comment below.