Proppants and the market

Wrote this as a reply to a post, but probably worth it's own topic (don't shoot me @deltatrader)

ABOUT THE FRACKING MARKET

In 2011 the worldwide fracking market was worth $20b, an increase of 4 times since 2003 when it was worth just $5b.(1)

Horizontal oil and gas wells require between 3m pounds (1.4m kg) and 10m pounds (4.5m kg) of ceramic proppants during fracking, costing anywhere from USD$1m to USD$3m per well. (2)

Horizontal wells require considerably more proppants than traditional vertical wells – in some cases up to 10 times more.

In 2013, 60% of all USA oil and gas drill rigs were engaged in horizontal drilling, compared to2003 when just 10% were horizontal and 90% were vertical drilling.(7)



So from the above we can start to see why the market has expanded so quickly - and why we would provide such an incredible cost saving. If 60% of rigs are engaged in horizontal drilling, which increases proppant usage by up to 10 times, no WONDER there is such a flurry of activity around CKK.

If the trend is moving more and more towards horizontal drilling, and proppants are the major commodity in deep oil and gas fracking - it doesn't take a scientist to work out why the mad rush is on.

Lastly,

"Ecopropp proppants are able to be produced anywhere in the world where a coal fired power station and related resources exist, many of which are adjacent to oil and gas fields. This strategy dramatically lowers the logistics costs of transporting proppants manufactured in traditional clay/bauxite proppant plants. These plants are typically located alongside their feedstock resource, hundreds or even thousands of kilometres from an oil and gas field."

I know @vontrader has touched on the logistics savings before, but it's clearly something which plays a role - especially given the huge numbers involved in the fracking process for deep horizontal wells (1-2km deep, using between 1-3m worth of proppants per well in the fracking process).

If we can cut costs of logistical supply, as well as the core cost of the proppant (which is the highest use commodity), and are more lightweight and withstand higher pressures ... what more could a major oil or gas player want?

Think I'll be topping up again tomorrow - bloody research, always makes me want to buy more.