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Rail News Home Rail Industry Trends

5/25/2011



Rail News: Rail Industry Trends

Hunt Global Resources to produce more frac sand for shale drilling operations


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Today, specialty sands supplier Hunt Global Resources Inc. announced it entered into an agreement to acquire the mining rights to more than 400 acres containing an estimated 100 million tons of “Northern White” frac sand, which is used in the horizontal drilling process to produce oil and gas.

The transaction will be finalized pending approvals by regulatory agencies, further testing of sand deposits and final negotiations of lease terms, according to the company. Hunt Global Resources projects the company can begin mining frac sand in the undisclosed region as early as the third quarter.

“Northern White frac sand is considered the premier sand in the industry; it is also becoming extremely scarce, especially in large quantities such as contained on this property,” said Hunt Global Resources Chief Executive Officer George Sharp in a prepared statement. “Currently the demand for high-quality frac sand far exceeds the supplies that are available.”

A working mine in the area has access to all necessary infrastructure, including roads, rail and electric-power gas, so it can start producing high-grade frac sand faster and at a lower cost than a development property, Hunt Global Resources officials said.

The increased number of oil and gas wells that are projected to be drilled in several North American shale formations — including the Bakken Shale — during the next five years should continue to widen the gap between supply and demand, causing frac sand prices to continue escalating, said Sharp.

To learn how the Bakken Shale’s rapid growth is impacting the rail industry, follow this link to read “Crude intentions," an article published in Progressive Railroading’s May issue.