A Shortage of Frac Sand Will Bring Supply Chain Challenges

Many oilfield service and supply companies, including Halliburton (NYSE: HAL), Hi-Crush (NYSE: HCLP), U.S. Silica (NYSE: SLCA), and Fairmount Santrol (NYSE:FMSA) have cited a shortage of frac sand for the U.S. shale plays, specifically 40/70 in the Permian Basin.

Advancements in the horizontal drilling and completion techniques of leading shale E&P’s are driving frac sand demand to new high points. The significance of multi-well pad drilling in the Permian increased each of last several years, even during the downturn. In 2016, 42% of the wells completed in the Permian were drilled on multi-well pads compared to only 22% of wells in 2015. Most notably, Encana Corporation (NYSE: ECA) initiated a 64-well pad program in 2016 that continues to headline pad drilling discussions in the Permian Basin. [read more]

Categories: News

Tagged as:

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.