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Notes From Tudor Pickering Holts’ “Energy Thoughts” From Monday, September 18, 2017

Fracsand volumes still on the rise – in the world of proppants, logistics matter a great deal…an (updated) view from the rails (OIH $25) – We highlighted last quarter Class I rail data showing frac sand volumes moving higher at a rapid pace. Q2 data shows more of the same as frac sand volumes rose +19% q/q and have now surpassed peak 2014 levels (Q2’17 volumes ~7% higher than Q4’14). Despite the rapid increase in volumes, proppant suppliers have (so far) been able to keep rail pricing increases at bay as revenue per ton sits ~$6 (20%) lower than that of 2014. Rail cost (~$40-50/ton) is likely ~40-60% of delivered frac sand costs today and will continue to be a crucial piece of the supply chain as rising completions intensity keeps driving sand volumes higher.

Please contact your TPH representative for a copy of our sand by rail report, or hear from TPH’s George O’Leary on this topic at the 6thAnnual Frac Sand Supply & Logistics Conference.

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