Companies

A demand for sand

Well operators using more and more to boost productivity



The white sand beaches in Pennsylvania are a mile underground, where salt water and fine mesh sand luxuriate in the fracks of the Marcellus Shale.

The volume of frack sand used at each well to prop open newly created fissures and allow gas to flow to the wellbore has been on the rise over the past year. By some estimates, the increase has been dramatic.

“Most customers are pumping as much as they can,” said Iain McIntosh, vice president at Baker Hughes, a Texas-based oil and gas service firm that’s contracted to hydraulically fracture wells for operators in shale plays, including the Marcellus that underlies much of Pennsylvania.

Baker Hughes has seen the use of sand, or proppant, double over the past eight to 10 months, Mr. McIntosh said at Hart Energy’s DUG East conference this month.

Weatherford, another service firm operating in the area, has seen proppant volumes shoot up 50 percent in the first quarter of 2014, according to Robert Fulks, its director of strategic marketing for pressure pumping.

“Some people refer to that as brute force,” Mr. Fulks said during the Hart event. “You’re seeing wells pumped now with seven, nine, 11 billion pounds of sand.”

Whether the stepped-up sand blasting means better wells in the long run remains to be seen, he said.

In the meantime, demand for sand has put heavy burdens on railroads that transport the commodity from mines in the Midwest and on trucks that deliver it to well sites. The real conundrum is in the logistics. “It’s something that keeps us awake every single day,” Mr. Fulks said.

According to PacWest Consulting Partners, a Texas-based market intelligence firm, the Marcellus will require more than 13 billion pounds of frack sand this year, up from 9.6 billion pounds last year. In 2015, that’s expected to increase to nearly 15.8 billion pounds.

Part of that increase parallels the gradual return to aggressive drilling in the Marcellus, as gas prices continue to rebound from their valley in 2012. Partly, the rise is a function of companies fracking more stages per well.

The rest stems from operators’ belief that the more sand you get into the cracks, the more gas will flow out of them.

Canonsburg-based Rice Energy Inc. pumped 28 million pounds of sand into a Utica Shale well in Ohio last month, more than five times what companies were pumping a few years ago. The well debuted with an initial production of 41 million cubic feet per day, a record for the shale play.

It’s not all about the sand volume, said CEO Dan Rice, but compared with wells that have less sand, those with more do better.

Rice Energy claims it uses more sand per foot than any other operator in the Marcellus, averaging about 2,019 pounds. Mr. Rice said the company always has pumped more than the rest of the industry and has consistently reported some of the most prolific wells in the Marcellus, according to state data.

“But more sand means higher costs to complete these wells,” he said, “and at the end of the day, oil and gas development is an economic decision that each operator makes. Some guys may be able to justify it, while others cannot.”

Texas-based Range Resources and Canadian firm Talisman Energy also have increased sand volumes per well over the past year or two to increase productivity.

Range reported no logistical problems getting the sand on site, with the exception of a period several months ago when it switched from using so-called SandKings, which are giant flatbed containers for sand, to sand silos.

But, as Mr. McIntosh and Mr. Fulks noted, it falls to the fracking contractors to worry about logistics.

And one of the things stressing them out is the shortage of trucks on the road.

“There’s just a general consensus there’s not enough trucks out there,” said Mike Fisher, who manages oil and gas trucking operations at Sewickley-based trucking firm Modern Transportation. “We’ve been saying for two years that it’s coming.”

The shortage is nationwide, he said, but it’s more acute in areas with robust oil and gas drilling.

Anya Litvak: alitvak@post-gazette.com or 412-263-1455

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