• Sand consumption to top 100 million tons in 2018.
  • 100 mesh sand is capturing market share.
  • New Permian mines will disrupt sand market.

Correlation is not always causation. That rings true for 100 mesh sand, a proppant that has moved to the forefront of downhole discussion.

Earnings calls are replete with E&P companies and sand mining operations alike discussing proppant varieties as though they were the finest of wines.

When it comes to completions, the tight formation revolution entails the reversal of previously held norms. E&P companies once used coarse grains and viscous fluid to place proppant in crude oil well stimulation. Later, the industry moved to light volumes of coarse sand in early slickwater treatments for fracturing tight formation gas. Over the last half decade, the industry flipped to massive proppant loading of finer sand grades using larger fluid volume and higher pump rates in a slickwater plug-and-perf (PNP) configuration, whether fracturing tight formation oil or gas.

The move to slick water occurred simultaneously with oilpatch price deflation following the 2014 peak. But correlation is not causation. E&P companies used the downturn to experiment with massive proppant loading of finer grades of sand in a slickwater PNP configuration in concert with longer laterals and closer stage spacing. Finer grade proppant use grew because it worked.

Consequently, interest in finer sand grades is rising as the industry recovers. And yet laboratory models fail to describe definitively how the proppant behaves in the field. E&P companies traditionally deployed 100 mesh and larger pellets as a diverter rather than a proppant. In the laboratory, 100 mesh at crush point tends to shatter, creating flow-blocking fines. In practice, 100 mesh sand often correlates with greater productivity. Performance may reflect formation scouring, as any fracturing service provider will attest when discussing wear and tear on pumping unit fluid ends. Or performance may reflect E&P companies’ high-grading wells to the best rock primarily during the downturn where finer mesh proppants exhibit beneficial influence.

Although the mystery remains, a rising chorus of E&P companies now sings the praises of finer mesh sand. Proppant consumption is projected to grow 25% to 100 million tons in 2018. Of that, 100 mesh sand could capture 30% of demand, up from 22% in 2017. A perusal of 6,000 horizontal wells in 2017 on the FracFocus website finds sand comprises 94% of proppant—half undifferentiated by grade—with resin-coated sand accounting for 5% and ceramics making up the remainder.

Most 100 mesh sand originates from surface mines in the upper Midwest. Now a sand rush is underway as newly discovered Permian Basin deposits threaten to alter sand market fundamentals. Nameplate capacity for Permian sand production is projected to top 60 million tons of mostly 100 mesh sand annually within a half decade.

Sand market dynamics are in open debate for 2018. Regional sand supplied 35% of oilpatch demand in 2017. The story will play out in the Permian Basin, which is projected to account for 45% of 2018 demand.

Unknowns remain. Laboratory tests indicate Permian sand exhibits lower performance characteristics versus premium Northern White. That won’t matter for Permian E&P companies in shallower regions of the southern Midland or northern Delaware basins. Other E&P companies will stick with traditional Northern White, particularly as providers offer flexible interregional transfer and last-mile delivery solutions.

If it were about performance only, field practice and laboratory tests show coiled-tubing-activated sliding sleeves and engineered proppants generate a bigger harvest. But the methodology and materials are more expensive by a factor of five. Like The Dude in “The Big Lebowski,” demand for finer grades of sand abides for 2018.

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