American Oil and Gas Reporter - February 2018 - 56

SpecialReport: Advancing Shale Science
sand will drive up well performance by
enabling operators to further ratchet up
sand concentrations placed per lateral foot.
Quality And Proximity
Brigham notes that Atlas Pure Permian
sand is closer in color and quality to
northern white mined in the Upper Midwest
than the traditional Brady brown sand
sourced in Texas. By nature, Pure Permian
sands have good sphericity and low impurities, providing higher yield and lower
cost, he adds, noting that the combination
of quality and proximity can shave 5 percent or more off total well costs.
Overall, Brigham says the sand's quality matches what operators are accustomed
to using in the basin. Roughly 80 percent
of the deposit is 100-mesh, and considered
by the Atlas team to be comparable to
northern white. The rest is 40/70-mesh
and graded above Brady-quality brown.
The 40/70-mesh is 1-2 K values lower in
crush resistance than northern white, according to Brigham, which he says is a
level sufficient for virtually 100 percent
of West Texas wells.
Testing on sands sourced from the
Kermit area is yielding positive reports
on well performance from operators. Wallace also notes that production can be
switched to 100 percent 100-mesh, depending on market demand.
The company plans to provide transportation to well sites for any operators

requesting it. "We find that many operators
want to buy directly, but may not have
the logistics team to move the sand from
the mine to well sites," Wallace relates.
"Operators or service companies also can
pick up sand at the mine sites."
Either way, the cost advantage over
out-of-basin sands is substantial, Wallace
continues. "It can cost $50-$60 more per
ton just to get the sand into the basin."
"We see a lot of growth potential for
in-basin sand," adds Brigham. "And because we are a Permian pure play with
100 percent of our sand sold into West
Texas, every dollar we spend benefits
Permian operators."
First In-Basin Mine
Hi-Crush has opened the industry's
first in-basin mine in the Permian, producing 100-mesh sand at its new facility
near Kermit. Laura Fulton, the company's
chief financial officer, says the mine has
an annual production capacity of 3 million
tons with 15,000 tons of silo storage.
The sand is coarser than Hi-Crush's northern white sands, but meets all API specifications, she says.
"Customers tells us they like the Kermit
sand and that it is performing really well,"
Fulton comments. "Most operators also
want high volumes of 40/70, some 30/50
and even some 20/40-mesh sand for their
completions, which means sand will be
sourced from different locations."

Hi-Crush has opened the industry's first in-basin mine in the Permian with its new facility
near Kermit, which has annual production capacity of 3 million tons and 15,000 tons of
on-site storage. The company also operates multiple transload terminals in both the
Delaware and Midland basins. Hi-Crush's PropStream™ integrated supply chain solution
uses proprietary containers and an on-site conveyor system called PropBeast™ to optimize logistics from the mine site or transload terminal to the blender hopper.

56 THE AMERICAN OIL & GAS REPORTER

The company operates multiple
transload terminals for northern white
sand from its Upper Midwest mines, with
a site near Pecos in the southern Delaware
Basin and terminals at Odessa and Big
Spring in the Midland Basin. Generally,
Fulton says, Hi-Crush can supply 80 percent of the wells within a 50-mile radius
from the three terminals and the new
Kermit plant.
Given soaring proppant demand across
the Permian with no letup in sight, Fulton
says Hi-Crush sees plenty of room for
both in-basin and northern white sand.
"We expect that demand will continue
to grow and that the new West Texas
sands will add to, rather than displace,
current supplies," she states. "Operators
will be able to complete their wells using
even more sand per lateral foot, and do
so at a potentially lower cost with more
supply options."
Meanwhile, demand for northern white
remains very strong outside the Permian.
"We have a very strong footprint in the
Marcellus and Utica," notes Fulton. "Now
that we are able to source 100-mesh in
the Permian, we can free up some of our
northern white sands to Appalachia and
other areas."
Fulton says Hi-Crush is taking the
concept of "last-mile logistics" one step
farther to alleviate costs, personnel workloads and logistical headaches for operators. "We are focused on logistics to the
last foot," she explains. "We sell directly
to operators and deliver the sand all the
way to the blender at the well site,
handling all the logistics along the way,"
she states.
The company's PropStream™ integrated supply chain solution uses a containerized system to transfer proppant to
well locations. "In the Permian, for example, sand is transferred from the
transload terminals or the Kermit mine
into two containers on a truck chassis. At
the well site, the containers are off-loaded,
and an internal conveyor system called
PropBeast™ moves the sand directly into
the blender hopper," she explains. "Meanwhile, empty containers are loaded back
onto the truck to minimize idle time. The
container and conveyor system speeds
loading/unloading and dramatically reduces dust exposure."
The goal is to provide end-to-end supply to give operators the surety of quality



American Oil and Gas Reporter - February 2018

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Contents
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American Oil and Gas Reporter - February 2018 - 1
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