Frac Sand Company Stock Prices Enter Sharp Decline

Stock prices for some frac sand mining companies in Wisconsin have fallen sharply since late August.

Companies like Hi-Crush Proppants, U.S. Silica, and Emerge Energy Services have seen prices tumble anywhere from $40 to $100 per share in the last four months. Samir Nangia, a principal at PacWest Consulting Partners, said the drop in oil prices is affecting demand for frac sand.

“So previously we were saying demand was going to grow 20 percent-plus a year, and people felt that we were low,” he said. “And we have now gone down to essentially flat for the next two years.”

If demand stays low, Nangia said companies supplying lower-grade sand from other states will feel it first, and then smaller Wisconsin mines would feel the pinch. Nangia said large sand operations near rail lines should be fine unless demand drops significantly.