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This Week’s Market Buzz

• As much as 10 percent of U.S. fracking work could be delayed after Hurricane Harvey ripped through south Texas, Raymond James analysts said. More than half of the rigs running in the Eagle Ford shale – the only major U.S. shale formation affected by Harvey – suspended drilling because of the storm, according to the firm. “Given that much of oil and gas activity occurs in areas only accessible via dirt roads, the heavy rainfall usually makes the movement of trucks and supplies much more difficult,” Raymond James' Marshall Adkins wrote. “The trucking and rail of sand, chemicals and personnel to the well site will all take more time given the likely nasty condition of many Eagle Ford access roads."

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This Week’s Market Buzz

• Demand for raw frac sand is forecast to increase more than 4 percent per year to nearly 100 billion lb. in 2021, according to “Proppants Market in North America,” a new study from The Freedonia Group, a Cleveland-based industry research firm. In value terms, raw frac sand is expected to grow 10 percent per year to more than $3 billion in 2021, reflecting substantial gains in average prices as well as volume growth. Healthy growth is forecast for all types of raw frac sand, although both Northern White and Brady sand will see competition from new mines coming online in West Texas. Growth will be driven by robust gains for this other raw sand, which is expected to show increases of 12 percent per year through 2021. While both Canada and the United States will see demand gains through 2021, the United States is by far the larger user of the material. According to analyst Dan Debelius, "In 2016, the United States accounted for 88 percent of raw frac sand demand."

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U.S. Silica Acquires Mississippi Sand

U.S. Silica Holdings Inc. has acquired Mississippi Sand LLC, a frac sand mining and logistics company based in St. Louis, for $95.4 million in cash. The plant, located in Festus, Mo., is capable of producing 1.2 million tons annually of mostly fine grade sand. Nearly two-thirds of its total production is 40/70 mesh that is in the highest demand today from customers. The plant can be expanded to 1.6 million tons of production per year with a modest capital investment.

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Select Sands Doubles Revenue in Second Quarter

Select Sands Corp announced financial and operational results for the second quarter of 2017. Revenue more than doubled to $3.1 million CAD from $1.5 million in the first quarter 2017. Second quarter revenue would have been greater, except for lost sales volumes of 8,000 to 12,000 tons due to a pause in shipping during the May flood in Arkansas, and the installation of a vertical shaft impact crusher at the Freeze Farm Wet Processing Facility.

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Black Mountain Honored by Texas Conservation Plan

Black Mountain Sand LLC announced that the Texas Comptroller of Public Accounts, in conjunction with U.S. Fish and Wildlife Service (USFWS), has granted its Vest and El Dorado frac sand mines together a Certificate of Inclusion into the Texas Conservation Plan (TCP) for the Dunes Sagebrush Lizard (DSL).

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