Black Mountain Sand, a Texas-based in-basin frac sand provider, announced its expansion into the Eagle Ford Shale with the acquisition of 2,300 acres in Atascosa County. The company will begin immediate construction on its third Texas operation with anticipated delivery of its first commercial tons by year-end 2018.
Once fully commissioned, the Eagle Ford mine will employ 75 people and produce 2.2 million tons of sand annually. The mine’s total annual capacity is already sold out under long-term contracts.
The Eagle Ford mine will serve as Black Mountain Sand’s first expansion beyond the Permian Basin and is the direct result of its customers’ requests to service their activity in and around Atascosa County.
“We’re excited to bring our proven in-basin product and operating model into the Eagle Ford Shale. Producers here are eager to gain cost savings and reduce lead time with in-basin frac sand delivery. With the region currently producing approximately 12 percent of the U.S. total oil production and growing, the need for local sand has become paramount for our customers,” said Rhett Bennett, founder and CEO of Black Mountain Sand.
Until recently, most frac sand consumed by Texas operators was shipped by rail from out-of-state mines in the Midwest, approximately 1,200 miles away, adding substantial logistics costs and inefficiency to the supply chain. The adoption of in-basin sand delivers cost savings by significantly reducing these shipping expenses, which can account for 50 percent of frac sand costs.
Current estimates indicate using in-basin sand will reduce the total cost of drilling and completing a well up to 10 percent – which can amount to more than $500,000 in savings per well. With drilling activity projected to grow in the Eagle Ford Shale, the aggregate potential cost savings are significant. In 2017, 2,123 total drilling permits were issued, and 2018 numbers are anticipated higher, with 582 permits issued in Q1 2018.
Black Mountain Sand operates two mines in the Permian Basin that are quickly approaching nameplate capacity of 10 million tons annually, the largest in the basin by a significant margin. To help meet growing demand for its Winkler White, the company is in the last stage of evaluating the addition of a fifth dryer at each location, which will enable it to increase production to a combined total of 12 million annual tons, or the equivalent of over 520,000 truckloads of sand per year.
“We’re honored to expand our footprint and grow with our customers in Texas – both by exploring expansion possibilities in the Permian Basin and by adding a new mine in the Eagle Ford,” noted Bennett. “Our commitment is to provide the most dependable, cost-effective, and timely access to in-basin sand wherever our customers operate.”