Oklahoma Company Buys 2 Western Wisconsin Frac Sand Mines

An Oklahoma energy company has bought two western Wisconsin frac sand mines in deals worth more than $160 million.

In March, Mammoth Energy Services announced the purchase of the Taylor Frac mining operation in Jackson County along with a string of other companies for $133 million.

In company statements, Mammoth said it plans to more than double capacity at the Taylor Frac plant from 700,000 tons of sand per year to 1.75 million tons annually.

Mammoth also bought Chieftain Sand and Proppant last month. Chieftain was in bankruptcy proceedings and was purchased by Mammoth for a winning bid of $32 million. The company said capacity there is expected to reach 1.5 million tons per year. Mammoth already owns Muskie Proppants, located in Pierce County.

Don Crist, director of investor relations, said stabilization of oil prices near $50 per barrel “has given oil exploration and production companies confidence in growing the (oil) rig count with a doubling of the rig count off of the March 2016 lows.”

Samir Nangia, an oilfield services analyst with investment firm IHS, said their latest company outlooks have demand for frac sand 47 percent higher than this time last year.

“We’re getting a lot more pings for consulting work regarding new mines and, of course, we’re hearing a lot more about mines basically coming out of being mothballed … basically going back to active status,” Nangia said.

Nangia said as smaller Wisconsin companies are being bought up by larger firms more industry attention is being paid to Texas, which produces lower quality but cheaper brown sand compared with Wisconsin’s northern white.

“What we’re basically seeing is some consolidation and then, of course, we’re seeing a lot more activity in terms of new sand mines closer to Texas,” Nangia said.

Nangia said Texas sand may be a threat to Wisconsin frac sand producers unless demand grows enough that oil companies will use whatever is available.