Fully Delivered Frac Sand Has Carved Out A Meaningful Chunk Of E&P Wallet [Chart Of The Day]

In some large tight oil well AFEs these days, the frac sand line item can be as much as a quarter of well cost.

Of course there is a lot more involved in shale development capex than just individual well costs.

So for this chart of the day exercise, we took a look at frac sand’s place in the “burdened” 2018 E&P shale capex budget. We quantified this both top-town and bottoms-up with a similar result:

  1. We estimated frac sand demand at the company level for a sample of large US independents and compared the fully delivered cost of that sand volume to each operator’s 2018 capex guidance.
  2. We estimated the fully delivered cost of our 2018 sand demand estimate and compared this to estimated Lower 48 E&P capex.

Here are the results:

There’s a lot more to this story…

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