Posted on 11/25/2014 5:39:45 PM PST by bananaman22
When it takes up to four million pounds of sand to frack a single well, it’s no wonder that demand is outpacing supply and frack sand producers are becoming the biggest behind-the-scenes beneficiaries of the American oil and gas boom.
Demand is exploding for “frac sand”--a durable, high-purity quartz sand used to help produce petroleum fluids and prop up man-made fractures in shale rock formations through which oil and gas flows—turning this segment into the top driver of value in the shale revolution.
“One of the major players in Eagle Ford is saying they’re short 6 million tons of 100 mesh alone in 2014 and they don’t know where to get it. And that’s just one player,” Rasool Mohammad, President and CEO of Select Sands Corporation told Oilprice.com.
Frack sand exponentially increases the return on investment for a well, and oil and gas companies are expected to use some 95 billion pounds of frack sand this year, up nearly 30% from 2013 and up 50% from forecasts made just last year.
Pushing demand up is the trend for wider, shorter fracs, which require twice as much sand. The practice of downspacing—or decreasing the space between wells—means a dramatic increase in the amount of frac sand used. The industry has gone from drilling four wells per square mile to up to 16 using shorter, wider fracs. In the process, they have found that the more tightly spaced wells do not reduce production from surrounding wells.
(Excerpt) Read more at oilprice.com ...
I wonder if recycled glass might work at a feasible price?
The onsite tanks for oil and production water. The pipes to them. We’re talking about completion, not plug and abandon.
Toss in some alcohol from a business failure and the spigots may just be opened to the world and left to flow a few hundred bpd onto the ground, both production water and oil.
That would be a cleanup effort for NoDak.
I’ve seen a lot of wellheads shut down, never ever saw one where anyone ran anything out on the ground. Why would they?
The tanks and piping are sold off for reuse, or even for scrap. Why would anything be left laying around?
Because the LLC declared bankruptcy and fired everyone with no notice. Add some beers and the spigots may get opened.
What LLC? What company?
Where did this actually happen, and why didn’t they sell off the equipment to get the money out of it?
Has this really ever happened anywhere, or is this just dredged up from your fevered imagination?
I’ve worked from one end of the Eagle Ford to the other, seen a lot of shutdown wellheads, talked to a lot of people, and never heard anything like this.
Okay. Wellheads shut down and P&A when they go empty. That’s not the same thing as a small operator defaulting on a loan and going out of business.
The issue is “defaulting on a loan” is not discretionary and it’s not even schedule discretionary. The lender shows up and says Where The Hell Is My Money. Then he puts a lien on property and shuts it down. He can’t sell it off because it has to litigate (there are other creditors).
It all is outside the control of the LLC principal so the scenario is simple drunken anger.
As for precedent, lots outside oil, but not inside oil because there has never been a Too Big To Fail sub industry within oil before funded entirely by junk bonds.
It’s not going to happen, but not for the reasons you suppose. It’s not going to happen because shale is TBTF and the government is going to come in and intervene. Maybe even nationalize the effort. It’s too big to fail. They can’t allow it.
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