Frac sand miner U.S. Silica Holdings reported a bigger-than-expected quarterly profit on July 30, as it sold more sand to U.S. shale producers.
The company sold 3.9 million tons of sand to oil and gas companies in the second quarter, an increase of 13% over last year, helped by a ramp up at its West Texas capacity.
U.S. oil producers, which have been spending and drilling less as investors focus on returns, have been drilling longer lateral wells requiring more sand and pumping in more proppant per well to wring out as much oil as possible cheaply.
Frac sand is mixed in a slurry and forced at high pressure into wells to free oil and gas trapped in rocks.
The company’s net income fell to $6.2 million, or 8 cents per share, in the second quarter ended June 30, from $17.6 million, or 22 cents per share, a year earlier.
Excluding one-time items, the company earned 14 cents per share, beating analysts’ estimates of 4 cents per share according to IBES data from Refinitiv.
Total sales fell 7.6% to $394.9 million.
George Solich’s FourPoint will join forces with Double Eagle to form DoublePoint with more than 70,000 acres in the core of the Midland Basin.
SRC Energy said the acquisition of about 30,000 acres will boost its leasehold by 50% and its drillable locations by 55%.
For years, the hinterlands of the Permian Basin have suffered, yet E&Ps in the Delaware and Midland basins are returning to the periphery of the play, and many of them have something to prove—or at least prove up.