Sand/Proppant

Hi-Crush Inc., a frac sand company headquartered in Houston, TX, has filed for Chapter 11 bankruptcy protection. Hi-Crush provides frac sand/proppants to a number of shale plays across the country, including the Marcellus/Utica. In its filing, the company seeks to convert $450 million of its $699 million of debt into equity (shares of stock), diluting existing shares for existing stockholders. As is typical, existing shareholders get the short end of the stick.
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Some of the best frac sand to be found–the finest particles–come from Wisconsin sand mines. Once upon a time Wisconsin was the primary frac sand producing state, for both the northeast and the southwest. But then Texas oil frackers began experimenting with Texas sand and found they could use it. No, the Texas sand is not quite as fine (or good) as Wisconsin sand, but it works. And it’s cheap, because transportation costs are low. Shipping sand from Wisconsin to Texas by rail costs big bucks. The northeast is not blessed with its own sand mines for fracking, so we still depend on places like Wisconsin. And now, increasingly, Wisconsin depends on us.
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Earlier this week CrowdOut Capital announced they have arranged a private, non-bank loan for frack sand company Shale Support to fund “the acquisition of two sand mines, spanning over 1,000 acres that contain more than 100 million tons of recoverable high-grade frac sand, which are located near the prolific shale plays in the southeastern U.S.” No details on the amount of the loan nor the names/location of the sand mines were released. However, as we reported in early July, Shale Support announced a deal to buy two sand mines in Louisiana (see Shale Support Buys 2 Frac Sand Mines in La. to Help Service M-U). Last September MDN told you that Shale Support, headquartered in Texas with an operations center in Mississippi, was stepping up its presence in the Marcellus/Utica region with a partnership with Tidewater Logistics (see Shale Support Holdings Expands M-U Frac Sand Business via Partnership). The partnership increases Shale Support’s operations in Ohio, Pennsylvania and West Virginia. Because Shale Support can ship sand direct from Mississippi, which is much closer than most other alternatives, the price for frac sand is cheaper for customers. Shale Support announced another important deal in May of this year, to become the exclusive supplier for a major regional frac sand facility in Bradford County, PA (see Shale Support Exclusive Frac Sand Supplier for NEPA Facility). While the CrowdOut announcement doesn’t say it, we believe the this loan will fund the two new Louisiana sand mines previously announced. Yes, some (most?) of the sand will go for drilling in the Haynesville and other plays in the region. But some of that sand will no doubt find its way to the Marcellus/Utica, hence our interest in Shale Support and how they finance their operations…
Read More “Shale Support Gets Loan to Buy 2 Frac Sand Mines to Service M-U”

Last September MDN told you that Shale Support Holdings, “a leading provider of frac sand and logistical solutions to the oil and gas proppant market” (headquartered in Texas, with an operations center in Mississippi), was stepping up its presence in the Marcellus/Utica region with a partnership with Tidewater Logistics (see Shale Support Holdings Expands M-U Frac Sand Business via Partnership). The partnership increases Shale Support’s operations in Ohio, Pennsylvania and West Virginia. Because Shale Support can ship sand direct from Mississippi, which is much closer than most other alternatives, the price for frac sand is cheaper for customers. Shale Support announced another important deal in May, to become the exclusive supplier for a major regional frac sand facility in Wysox (Bradford County), PA (see Shale Support Exclusive Frac Sand Supplier for NEPA Facility). Two weeks ago, in June, Shale Support made yet another announcement–they’ve just closed on a deal to buy two natural sand mines in Louisiana. The mines add another 2 million tons per year of frac sand (now totaling 5 million tons) that Shale Support will provide to plays like the Haynesville, Austin Chalk, Eagle Ford and (yes), to the Marcellus/Utica…
Read More “Shale Support Buys 2 Frac Sand Mines in La. to Help Service M-U”