Frac Sand Glut

9 hours ago, Marina Schwarz said:

Texas-size glut of frac sand accumulating as demand weakens

That part of the industry just can't catch a break, can it? First there's a shortage, now a glut.

I can honestly say that story is very misleading. There is still a lot of DUC wells that will last 2 years to keep the rate of flow up. They fail to mention that frac sand now is so cheap because a lot of ranchers here in west Texas are selling mineral rights of the surface to make roads, frac'ing sands, and to make holding ponds. So what some analyst in Houston sitting behind a desk doesn't realize is there is more and more sands for sale. Thus the drop in tonnage price. In my ventures out and about I have seen no less than 8 big aggregate operations. 

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I think that's the best thing about this community. We get more than one perspective and that's always and invariably a good thing. Thanks!

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On 2/7/2019 at 1:02 PM, Old-Ruffneck said:

I can honestly say that story is very misleading. There is still a lot of DUC wells that will last 2 years to keep the rate of flow up. They fail to mention that frac sand now is so cheap because a lot of ranchers here in west Texas are selling mineral rights of the surface to make roads, frac'ing sands, and to make holding ponds. So what some analyst in Houston sitting behind a desk doesn't realize is there is more and more sands for sale. Thus the drop in tonnage price. In my ventures out and about I have seen no less than 8 big aggregate operations. 

 In many cases the surface owner and mineral owner are separate people in places where the minerals are privately owned.  The industry will pay for roads, pads, and any other surface needs to the surface owner.  Oil companies will pay a up to $25,000 per mineral acre in the Permian but most pay "a lot" in bonuses to obtain an oil and gas lease.  In the Permian a company will pay around $3,000 to $5,000 for the first year of the lease.

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