Frac sand miners Emerge Energy Services and Hi-Crush Partners
reported soaring profits in July-September 2017, as prices
for the proppant rallied.
Emerge Energy Services reported that total volumes sold were
up by 6.3% quarter-on-quarter, to 1.5 million short tons,
compared with just 493,000 tons in July-September 2016.
Emerge did not announce per-ton sand prices, but said that
prices were up from the previous quarter, with costs falling
and margins improving.
The increase in profitability came even before production
geared up at Emerge’s new facilities,
particularly the San Antonia site in Texas in the United
States, which saw its first shipments in the quarter,
totaling 16,000 tons.
This Texan sand is better placed to compete in the main
fracking heartland of the Permian basin.
Emerge reported net revenues of $103.22 million, compared
with $21.15 million a year ago, although profits were $5.01
million, due to the sale of discontinued operations in the
third quarter of 2016.
Hi-Crush Partners also reported rising sales, at 2.46 million
tons, compared with 1.08 million tons over the same period
The profitability of sand sales at Hi-Crush rose thanks to
higher prices averaging $68 per ton, up from $43 per ton a year
ago, with profit of $19.39 per ton, compared with $3.50 a year
And Hi-Crush expects sales to increase to to 2.7-2.9 million
tons in the fourth quarter of 2017, with pricing increasing
throughout the year.
Hi-Crush reported revenues at $167.6 million, compared with
$46.6 million in the third quarter of 2016, while profit was
reported at $29.8 million, compared with a net loss of $11.7
million a year ago.
The sand provider reports third-quarter revenues up by 150%,
thanks to "robust" demand from the oil and gas industry.
US Silica has forecast that demand for frac sand will go as
high as 100 million short tons in 2018, as proppant use per
|Mark A Wilson, 2015