Double Crown Resources Inc. (fka DDCC)

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Texas-company strikes it rich mining frac sand in small Wisconsin town

News Link: http://host.madison.com/news/local/writers/jessica_vanegeren/texas-company-strikes-it-rich-mining-frac-sand-in-small/article_bb22b1d0-3dae-11e4-9d81-0b4b832f9ecb.html#ixzz3DapO3D2x

The coarse silica sand found in the hills of Wisconsin has made for a rags-to-riches story for one Texas-based private equity firm that went from dealing Texas sand to golf courses to selling Wisconsin sand for the booming fracking industry.

A Wall Street Journal story, “Small firm strikes it rich with fracking sand” lays out the financial nuts and bolts that have catapulted Insight Equity Holdings LLC, based in Southlake, Texas, onto Wall Street’s radar.

The story posted Monday after Emerge Energy Solutions closed at $122.78 a share. That’s up from $17 a share on its first day on the market in May of 2013, according to the article. Insight owns about 30 percent of Emerge.

“It’s exciting,” Ted Beneski, Insight’s chief executive, told the Wall Street Journal.

Beneski owns shares worth $80 million and told the Wall Street Journal he checks Emerge Energy’s stock price “about 10 times a day.”

Emerge switched its business model from supplying Texas-mined sand to golf courses to Wisconsin’s rich supply of silica sand to oil companies in 2011.

That year, Insight built a $25 million facility to mine sand in Wisconsin through its company, Superior Silica Sand, located in New Auburn. The small village of just over 500 people is located on the border of Chippewa and Barron counties.

Beneski told the Wall Street Journal “hundreds of acres of hills were flattened to extract the sand.”

Insight merged Superior Silica Sand and two other energy holdings to create Emerge Energy, according to the article.

The sand is ideal for the hydraulic fracturing — or fracking — process in which the sand is mixed with water and other chemicals. The mix is then pumped down a hole to create fractures that allow oil and natural gas to be extracted from the rock.

Wisconsin is the top exporter of silica frac sand, with the number of frac sand mines and processing centers more than doubling in the past two years to more than 140 either operating or in the planning stages, according to data from the Wisconsin Center on Investigative Journalism.

The industry shows no signs of slowing down, either. According to the latest report from the energy-consulting firm PacWest Consulting Partners, frackers are expected to use nearly 95 billion pounds of sand this year.