American Oil and Gas Reporter - February 2021 - 71

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SpecialReport: Permian Resource Solutions
two sand mines in West Texas. He predicts
40/70 proppant will be especially tight.
" Even when they were brand new,
most in-basin sand plants had downtime
or other issues that caused them to miss
deliveries, " he recalls. " Now that they
are three or four years old, those issues
may be worse, especially since many of
their owners had to defer maintenance
and lay off employees during 2020. "
Atlas is the only company with two
sand plants that managed to keep both
open throughout 2020, reports John Turner,
the company's chief financial officer.
" We have lower operating expenses and
a better capital structure than most of
our peers, so although the volumes we
sold dropped significantly, we were able
to keep our plants open and our shifts active, " he explains.
With less need to produce sand, Wallace
says the company's employees spent four
months focusing on making its plants near
Kermit and Monahans, more efficient. " We
built the plants with automation in mind,
so we had a pool of data to look at on
almost every piece of equipment, " he reports.
" However, we did not have the time to
fully leverage that data until last year. "
To illustrate how valuable the data
can be, Wallace offers a sand dryer. " From
the data, we know exactly when and how
long that dryer was down. By looking at
data points around those failures, such as
moisture readings or the amount of sand
in the surge bins, we can identify each
failure's root cause. By doing that over a
month, we can spot the most common
problems and find ways to address them. "
One of the most impactful changes
Atlas made during 2020 was converting
from traditional yellow iron mining to
dredge mining. Yellow iron mining requires
as many as a dozen men running dieselpowered heavy equipment, such as excavators, dozers and haul trucks, to mine,
transport, stockpile and feed sand from
the mine to the plant for processing. In
contrast, Wallace describes, the new
process only requires one person to run
an electric-powered dredge that sucks up
the sand and water and transports it
straight into the plant.
Each plant's dredge floats peacefully
in a pond that formed naturally in the depression created by their sand mine, Wallace
says. He reports that upgrading to dredging

cut mining costs at both plants 75%.
" We are uniquely capable of implementing the dredging process because
our deposits are the only ones in the Permian Basin with water naturally available, "
he says. " Instead of ending 20-50 feet
below the surface, our deposits extend as
far as 145 feet. These large underground
depressions filled with extremely porous
sand act like giant tanks, collecting water
from the area. "
Atlas uncovered water only a few feet
below the surface while constructing its
two plants but needed to verify the water
supply would be stable before upgrading
to dredging, Wallace relates.
Centralizing Loading
Another major improvement Atlas
made last year was moving its on-site
loading teams to a command center in
Austin, Tx. Wallace notes that costs much
less than housing people in man camps
in West Texas and paying for their transportation home when their shifts end. It
also means workers can spend more time
with their friends and families.
" Moving both plants teams' to the
same facility gives us several efficiencies, "
he adds. " Before, if Monahans had an
hour of heavy traffic while Kermit was
slow, the loaders at Kermit would be
idle. Now they can help the Monahans
team keep trucks moving in and out as
efficiently as possible. "
The command center makes it easier

to pair truckers with loaders who have
the knowledge to help them, Wallace
mentions. For example, if a driver who
struggles with English has a complex
issue, his initial contact can transfer him
to a Spanish-speaking colleague so they
can resolve that issue more quickly.
According to Wallace, the command
center has allowed Atlas to maintain an
average total time on the mine site of 10
minutes while reducing its operating costs
and improving truckers' experience.
Reliability
Wallace admits, " Every sand plant has
its issues. After all, sand is one of the
most destructive things you can put into
a machine, and it is all our equipment
deals with 24/7/365. " However, he also
expresses pride in Atlas's performance,
proclaiming, " Since we fired up our plants
in 2018, we have yet to cancel or miss an
order that was placed with us, and I don't
think many or any of the other Permian
sand plants can say that. "
That is partly because the company's
plants include enough redundancy to compensate for equipment downtime, but it
also reflects a disciplined approach to
sales, Wallace says. " Because of unexpected
delays or other issues on the well site,
customers often end up pulling less sand
than they ask plants to allocate to them, "
he relates. " To ensure all their sand gets
sold and maximize their profits, it is tempting for plants to overbook their capacity.

As part of a broader effort to minimize costs, Atlas Sand has upgraded both of its sand
mines from yellow iron mining to dredge mining, a process that requires less equipment.
According to the company, this change has cut mining costs 75%.

FEBRUARY 2021 71

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