MADISON, Wis. — Frack sand companies doing business in Wisconsin are seeing their stock prices fall despite high demand for the sand.
Many companies focused this year on developing sand mines in Texas, which has caused stock prices of companies that focused on developing Wisconsin mines to drop, Wisconsin Public Radio reported .
Oil companies use the sand in hydraulic fracture drilling for oil and natural gas.
Wisconsin northern white sand is considered one of the highest quality sands because of its high-crush strength. However, companies have found that Texas’ finer grain sand costs less and is an acceptable alternative.
Companies are worried that the new mines in Texas will flood the sand market, said Jim Wicklund, who tracks sand companies’ financial performance for financial service company Credit Suisse. He predicts companies who don’t start investing in Texas sand will suffer.
“It may not be the death knell of Wisconsin, (but) the likelihood that you see any new sand permits anytime soon out of Wisconsin is pretty close to zero,” Wicklund said.
Fairmount Santrol, Hi-Crush Proppants, Emerge Energy, U.S. Silica and Badger Mining have multiple mines in Wisconsin. Those companies have announced plans to build mines and sand processing facilities in Texas.
“We’re looking to supply our customers just like everybody else. So, there are opportunities out there for different qualities of sand and, again, we need to meet our customers’ needs,” said Marty Lehman, Badger Mining team leader.
Information from: Wisconsin Public Radio, http://www.wpr.org