Sand

A fall off in Lower 48 exploration activity has slammed the sand mining sector, but some stability should return this year, according to Moody’s Investors Service.

A fall off in Lower 48 exploration activity has slammed the sand mining sector, but some stability should return this year, according to Moody’s Investors Service.

Proppant oilfield service operators are preparing for a likely decline in U.S. land operations through the second half of this year and into 2020, with a “rationalization of supply” said already underway.

Emerge Energy Services LP, which provides silica sand proppant for U.S. onshore operators, has filed for Chapter 11 protection, the second provider to seek bankruptcy protection in less than a week.

Proppant sand providers, which faced headwinds during the first quarter from low prices and conservative spending by their customers, will have to deal with a supply and demand imbalance that could pressure prices into the foreseeable future.

Permian Basin in-basin sand production by one count has reached more than 60 million tons/year, and in-basin operations are growing in other areas, reducing demand for the ever-popular northern white as companies work to reduce costs and improve efficiencies.

Houston-based Hi-Crush Partners LP, which provides proppant sand for North America onshore operators, on Monday reported a sharp downturn in sales for the fourth quarter and it has subsequently suspended quarterly distributions because of current market conditions.

U.S. Silica Holdings Inc., one of the largest sand providers in the onshore, reported double-digit growth for oil and gas volumes as more mining facilities opened in its largest service area, the Permian Basin.

The U.S. natural gas rig count climbed three units to 189 for the week ended Friday (Sept. 28) as a decline in oil drilling kept the overall domestic count steady, according to data from Baker Hughes, a GE Company (BHGE).