Changes In The Shale Industry Mean Opportunities For Those Prepared

There continues to be a lot going on in the North American oil & gas sector, which dramatically impacts the frac sand market. While there is no denying there has been some bad news, those changes also mean there are some big opportunities for those who are prepared. While not all the companies will survive, experts say the industry is here to stay, and every forecast I have seen indicates strong demand growth for proppant over the next decade.

It is a matter of getting creative in the short term. Bear in mind that while some frac sand providers have shuttered plants, there are still a lot of opportunities. Customers of those shuttered plants or related service providers will be actively looking for new partners all along the supply chain. That may be part of the reason that Fairmount Santrol actually increased their proppant sales by 12% last quarter!

We all know about the trend of increased proppant usage per well and how creative shale drillers have become in reducing costs and gaining efficiency. That creativity is an opportunity for your company. Those drillers are more focused than ever on finding ways to reduce costs, so if you have a solution along those lines, make yourself heard! Advertise, speak at conferences, write blog posts and articles (feel free to submit articles to us for our blog and/or the Frac Sand Weekly News Digest).

This is not the time to disappear. Let your competitors do that, while you use this “quiet” time to reposition yourself, establish relationships, and take market share.

In addition, while we are in a slowdown in North American shale production, there may be non-energy opportunities out there in the general industrial sand sector worth exploring. Expertise developed in the frac sand industry might transfer nicely into other markets. That said, don’t overlook other energy trends and changes that might turn into opportunities. The call-off of the Halliburton-Baker Hughes merger means both companies will likely be refocusing on efficiencies in their own supply chains. And they both have a potential new monster competitor with the FMC-Technip merger announcement last week. All this while crude prices has quietly remained in the mid-to-high $40’s for the last 30 days!

Lot of changes in the shale sector right now, and lots of opportunities. Please provide your feedback and comments on the topic below.

And I hope you can continue this discussion in person at the 5th Annual Frac Sand Supply & Logistics Conference this October. It is the largest frac sand related conference of the year and a must-attend event for anyone in the frac sand supply chain!


New sources for this post: The Wall Street Journal, Oil & Gas Financial Journal, the BBC, Seeking Alpha, and The Chippewa Herald.