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After 2015 fracking ground to a pretty sudden halt in the Marcellus and Utica shales. This was primarily due to prices, storage capacity, and logistics. Oil prices are projected to rebound and increased regulation is helping natural gas begin to shift back into the limelight.


This time around the target is the Permian shale basin. And this time around the big boys Exxon and Chevron are getting heavily involved. Northern White Frac sand is still the gold standard. HCLP and SLCA are well positioned for the influx of drilling ahead. The key to this game is logistics. Being able to get the sand where it needs to be when it needs to be there at a reasonable price. Both companies have pros and cons. HCLP has done a good job in my opinion developing their silo system (and has signed some big contracts). This is a unique advantage over competition.


Personally I don't love the financials of these companies. HCLP just recently converted to a C-corp which hopefully helps them get better rates on capital (which I'd rather they not borrow and use FCF). But as well all know these a boom and bust industries. I like the management at HCLP and they have been very strategic and direct about their projects.


A few articles i found interesting. First one is a few years old but very informative.







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