Replies to post #8644 on Double Crown Resources Inc. (fka DDCC)

[ProfitScout]

Frac sand boom here to stay
By Isaac Orr
July 19, 2015

Link: http://www.jsonline.com/news/opinion/frac-sand-boom-here-to-stay-b99539870z1-317009731.html

Sand from the upper Midwest is coveted for hydraulic fracturing. It is the right size, shape and cleanness (almost pure quartz). It is also highly resistant to crushing under immense pressure, acting as a network of pillars (think of the Parthenon) keeping open the tiny fissures made in the rock in the process of hydraulic fracturing, allowing the oil and natural gas to flow up from the rock deep underground.

The boom in oil and natural gas production has sparked a boom in mining of frac sand in Illinois, Minnesota and Wisconsin. Recently, however, plummeting oil prices have resulted in some sand-mining companies laying off workers or suspending operations, leaving people in these areas wondering if the boom was really a bubble.

It's still a boom. Although low oil prices have put a temporary damper on the demand for sand, the long-term demand is as crush-resistant as the sand grains themselves, because operators are using more sand per well and natural gas recovered from shale formations is the fuel of the future.

Over the past few years, oil and gas operators increased the amount of sand used in these operations by approximately 25% to 30% a year. Using more sand increases the amount of oil and gas (and ultimately, dollars) they can recover from the wells. This is a key reason why the demand for sand has declined only slightly even though the active U.S. drilling rig count is 60% lower than it was last October. Although double-digit year-over-year increases in demand for sand may not always occur, the trend has been promising so far.

Not long ago, former Federal Reserve Chairman Alan Greenspan urged the United States to build natural gas import terminals because he feared we would not have enough natural gas to meet the country's needs. Now the United States is the largest producer of natural gas in the world, and the first shipments of natural gas exports will leave the country later this year. This energy 180 was due entirely to horizontal fracking for natural gas in shale-rock formations, and these formations will be increasingly important in future energy production.

Shale gas already accounts for the largest share of U.S. natural gas production, providing 40% of all the natural gas produced in the United States, and this figure will grow in the coming years as demand for natural gas for electricity generation grows from 30% of the nation's electricity generation today to 35% by 2040, and as production from conventional natural gas wells gradually declines over time. The Energy Information Administration (EIA) estimates fracking and horizontal drilling will provide the nation with 53% of our natural gas by 2040, meaning frac sand will continue to be a highly coveted commodity for energy extraction regardless of the international price of oil.

In the short term, frac sand demand, and therefore prices, will fluctuate like other commodities such as milk and eggs. But the long-term demand for oil and natural gas will ensure these tiny sand grains will prop up our domestic energy production — and the economies of the states where the sand is mined — for decades to come.

Isaac Orr ([e-mail]) is a research fellow for energy and environmental policy at The Heartland Institute. Follow him on Twitter @thefrackingguy.

[ProfitScout]

Halliburton introduces new refracturing service
World Oil
7/29/2015

Link: http://www.worldoil.com/news/2015/7/29/halliburton-introduces-new-refracturing-service

Halliburton announced today the launch of ACTIVATE Refracturing Service, a collaborative workflow that leverages subsurface insight, expertise and breakthrough diversion technology to recover bypassed reserves from unconventional wells more predictably and repeatedly. Generating more predictable results from refraced wells is creating a paradigm shift on how Halliburton targets shale/tight formation field development. Operators can now increase their ability to build a balanced portfolio with production distributed across new wells, infills and refracs in order to drive down the cost per BOE break-even point of their specific assets. With ACTIVATE Service, Halliburton can help operators increase their ultimate recovery and bookable reserves. In basins where Halliburton has delivered ACTIVATE Service, operators are seeing on average an 80% increase in EUR per well, 66% reduction in cost per BOE from refractured wells compared to new wells, and a potential of up to a 25% increase in the oil recovery factor with a balanced portfolio.

The ACTIVATE Service leverages multiple Halliburton products, such as its AccessFrac Stimulation Service, FiberCoil Tubing Service, FracInsight Service, Pressure Sink Mitigation Solution (PSM) and Pinnacle’s Integrated Sensor Diagnostics (ISD) to obtain subsurface insight and bring together the needed expertise to make refracs more reliable and predictable. “Our customers can be confident that Halliburton’s ACTIVATE Service has shown that it can help deliver their projects at a lower cost per BOE, and that we are helping reduce the unpredictability that has surrounded refracturing projects in the past,” said Jim Brown, Halliburton’s president of the Western Hemisphere. “Given today’s commodity prices, adding more refracs to their unconventional portfolios just makes sense and can help increase the profitability of the operators’ assets.”