Rock Products

MAY 2015

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www.rockproducts.com Frac Sand Insider May 2015 | 65 Domestic Frac Sand for frac sand (see Figure 2). Some Great Lakes frac sand is also shipped to Canadian fracking sites since Canada produces only about 30 percent of its frac sand requirements (Seeking Alpha, 2014). In 2014, Canada imported about 1.5 Mt of sand from the United States. Most of the remaining frac sand production in the United States, approximately 13 Mt rounded to the nearest Mt, orig- inates from outside the Great Lakes Region. In descending order of production they are: Texas (8 Mt), Arkansas (2 Mt), Nebraska (2 Mt) and Arizona (1 Mt). A large percentage of the sand produced from the mines in these states is considered "brown sand" and sold as Brady, Brown, EF (economical frac), Hickory, and Texas Brown. These sands may contain minor amounts of impurities, have lower strength and sphericity, and have other properties that may con- tribute to lower conductivity and value than the "white sands" of the Great Lakes Region (Levson and others, 2012; Texas Frac Sands, 2014). Frac sands produced from these areas are also shipped to numerous states as they are suitable for use in some basins with relatively shallow wells. The production from these mines is consid- ered very important to consumers of frac sand at oil and gas plays located in relatively close proximity to the frac sand mines because of comparatively low transportation rates as shown in Figure 2 and Table 2. The top three frac sand consuming units or basins in the United States and the amount used are, in descending order of es- timated consumption, the Eagle Ford and Woodbine Formations in the East Texas Basin (9.5 Mt), Appalachia (6.8 Mt) and the Permian (5.3 Mt). Regional Frac Sand Consumption in Major U.S. Unconventional Oil and Gas Plays In 2013, untreated frac sand was used exclusively in almost 75 percent of horizontal wells, and comprised 90 to 95 percent of the total tonnage of proppant used in wells fracked in the United States. As shown in the map on Figure 2 and Table 2, during the last three quarters of 2013 through the frst quarter of 2014, a total of about 31 Mt of frac sand, about 66 percent of estimated 2013 U.S. frac sand production, was consumed in the identifed plays. These areas represent the basins where much of the exploration for and production from unconventional oil and gas reservoirs in shales occurs. Frac sand was also used in horizontal drill holes in other basins and some vertical holes in areas not shown on the map. Additional tonnages are: used for well development in other areas of the United States and shipped to Canada; in transit; and maintained in inventory and stocks at plant facilities and distribution sites (Rock Products, 2014a). Frac sand stockpiles at mining facil- ities and storage sites in proximity to fracking activities may exceed 100,000 t (Sierra Frac Sands, LLC, 2014). In 2014, roughly 3-4 Mt will be exported, primarily to Canada (Claim Post Resources, 2013; PacWest, 2014b). Fracking operations in the Eagle Ford and Woodbine Forma- tions, in the East Texas Basin in Texas, were the largest user of frac sand among the major plays shown in Figure 2 and Table 2 with consumption of about 9.5 Mt. The Basin has signifcant oil and gas production and high potential for long term future production. Most of the targets in the Basin are relatively shallow compared to the Bakken portion of the Williston Basin and some other producing shale basins, but there is also high potential for production from deep wells which are geologically attractive because of the potential for production from multiple stratigraphic zones, and less tight res- ervoir rock than some other basins (Schaefer, 2012). Interest in the Eagle Ford Formation in the Basin is demonstrated by the increase in the number of drilling permits issued. In 2010, about 1,000 per- mits were issued and in 2012 that number had increased to about 4,100 (King, 2014). At the end of September 2014 there were 244 rigs drilling horizontal wells and 15 drilling vertical wells in the Eagle Ford Formation, representing nearly 15 percent of all active drilling rigs in the United States (Eagle Ford Shale, 2014). From 2009 through 2012 there was a 100 percent drilling success rate for production of oil and gas in the core area of the Woodbine portion of the play (Woodbine Acquisition, Inc. 2012). Frac sand consumed in the Basin represented about 30 percent of Rock, Wis., circa 2012. Some frac sand facil- sands from the effects of weather. Train cars have a capacity of about 100 short tons, which form provided courtesy of Jim Tittle at www.thepriceofsand. com). 6b is an of frac sand mined and processed in Minnesota. Note the uniform size and spherical shape of lack of fnes and nearly

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