uploads/2017/06/proppant-consumption-is-recovering-1.jpg

Increased Proppant Use per Well Drives Demand

By

Updated

Increased proppant use

Total proppant consumption across key US basins is recovering slowly. In addition to rising rig counts, increased proppant used per horizontal well is another contributor to increased proppant demand.

As the right chart in the above figure shows, proppant consumption per horizontal well has been increasing significantly, which drives its demand.

Frac sand producer Emerge Energy Services (EMES) expects the backlog of DUC (drilled but uncompleted) wells to drive proppant demand as the wells are completed. The backlog of DUCs remains at a high level. “Re-fracking” of older wells is also expected to drive frac sand demand growth.

Higher proppant demand should benefit Emerge Energy Services and Hi-Crush Partners (HCLP).

Article continues below advertisement
Advertisement

More From Market Realist