Frackers are expected to use nearly 95B pounds of sand this year, up nearly 30% from 2013 and up 50% from forecasts made just a year ago; as demand for the fracking sand takes off, sand prices are surging and the stock prices of sand producers are on the rise.
It can take 4M pounds of sand to frack a single well, but several companies are experimenting with using more after finding that the output of wells is up to 30% higher when they're blasted with more sand; ~20% of all onshore wells are now being fracked with extra sand, but the technique could expand to 80% of all shale wells, according to RBC analysts.
U.S. Silica (NYSE:SLCA) expects demand for sand will be at least 25% higher than supply for the rest of this year; it already has raised prices for some frack sand and plans to start charging 10%-20% more for the top-of-the-line Northern White sand.
Hi-Crush Partners (NYSE:HCLP) is predicting another 5%-10% increase in sand prices before year's end; the company recently signed seven new long-term contracts at higher prices and for greater volumes with oilfield service firms.
Frack sand producer Emerge Energy (NYSE:EMES) was last year's most successful public offering, with a share price that has shot up 558% since its debut.