June 11, 2014

DUG East - Strong Demand Reaffirmed

BHGE, EMES, HAL, SLB, SLCA, WFT
By Kellen Ferris
Last week’s 2014 DUG East Conference in Pittsburgh, attended by more than 3,000 people, highlighted increasing demand for frac sand and services in northeastern shale oil and gas plays.

Comments from the floor:

  • Pressure pumping equipment: One source with a pressure pumping service group said as frac sand and proppant tonnage increases, it’s taking a toll on all of their equipment. The source said the group is hitting its maintenance schedules faster. The increased frac intensity does not appear to be shortening the life of the equipment, just causing it to be serviced at shorter intervals.
  • 100 mesh: Another source from a pressure pumping service group who was recently relocated from Eagle Ford to Marcellus/Utica commented he was seeing a few jobs in the Eagle Ford being completed with 100% 100 mesh.

Comments from the podium:

  • One panel discussion, which was focused on drilling and completion optimization, highlighted the importance of more effective stimulations. Panelists agreed on average only 60% of stages perform.
  • One panelist stated the rate of sand usage was growing at roughly 32.5%, while another said proppant usage was up 50% so far in 2014. Not only is volume per foot increasing, but stage counts are also increasing, creating the doubling effect and emphasizing common themes in OTR Global’s 2014 research.
  • Panelists were quick to point out there is not a shortage of sand, just a logistically constrained market at the moment.
  • One panelist stressed the importance of finding better ways to store sand onsite. He said logistics are having a big impact on operations now, and he expects continued logistics hurdles as more gravel and limestone move north to south on the tracks just as summer crops begin to hit the rails.