Chinese proppant might not be all that bad. Dave Pursell, head of macro-research for Tudor, Pickering, Holt & Co. Securities Inc., says, “Our sense is that, what’s coming out of China right now, the quality is fine.”

But, these small manufacturers may try to ramp up too fast, and quality may be diminished, he adds in the webinar “Seeking Proppant? The Outlook for Supply, Demand And Quality” at To hear the one-hour program, go to

Earl Freeman, executive vice president of proppant-testing firm PropTesters Inc., says what he has seen of Chinese proppant has been relatively fine. “Worldwide, there are about 20 suppliers of ceramic proppant…In some cases, Chinese ceramic has performed better than local supplies,” he says.

Yet, again, the quality of proppant used in a well depends on what is delivered to a wellsite, versus what is tested in a lab or at the manufacturer’s shipping bay, before contamination and other corruption at transfer points and in handling, he adds.

What about general proppant availability? “Near term, I don’t think we’re going to have a problem with proppant availability,” Pursell says. But that won’t last.

Rigs are being laid down across the U.S., however, the number of horizontal rigs at work has grown as a percentage of total rigs in the field. Horizontal rigs are often used in drilling shale and other unconventional plays, which need proppant. He expects demand to continue to be strong.

Proppant demand was 70% for sand, 10% for resin-coated sand and 20% for ceramic in 2006, according to Pursell and based on figures from Carbo Ceramics Inc., which has some 60% or more of ceramic-market share. Pursell says the global proppant market grew some 10% a year in 2007 and 2008, thus demand last year was an estimated 16 billion pounds—“and that’s a lot.”

The Marcellus and Haynesville plays are the two strongest engines for growth in demand for proppant, he adds. If estimating that 500 Haynesville wells are drilled each year and each use 3 million pounds of proppant—“Maybe higher. It seems to grow higher in time, as wells get better”—this demand totals 1.5 billion pounds of proppant a year.

“That’s a 10% increase, roughly, in global proppant demand.” If a third of this is ceramic, that’s a roughly 17% increase in ceramic-proppant demand; if the balance is sand, that’s roughly an 8% increase.

“So these shale plays are big users of proppant and, the deeper you go…, the more likely it is to need to retain conductivity and you’ll have to go to a higher-strength proppant—and that means ceramic, on many occasions.”

In the Marcellus, sand and resin-coated sand can be used more often than in the Haynesville play (which is deeper and, thus, has a higher closure stress, so the proppant must be stronger). If 500 Marcellus wells are drilled each year and 2 million pounds are used per well, this results in additional demand of 1 billion pounds of proppant per year. “You’re talking about a significant increase in total demand.”

And, there are other shale plays that will put pressure on supply, such as the Montney and Muskwa plays in western Canada, and the Eagle Ford and Pearsall in South Texas.

“It’s going to be tough-sledding in the current environment,” Pursell says. “…The tension there is to continue to grow demand for proppant…We are already, effectively, out of capacity.”

Domestically produced ceramic-proppant supply can grow some by Carbo Ceramics’ restart of its New Iberia, La., plant and expansion of a Georgia plant, but “you’ll have to rely on external supply, probably from China…

“Buy proppant with eyes wide open and make sure of the quality,” he says.

Proppant quality can be corrupted at many supply-chain points, which begin with the source and end at the wellsite, Freeman says. “It can affect crush properties, particle distribution and so forth.” Sometimes the proppant isn’t up to specs due to abuse; it can even be damaged during movement in the field bin, he says.

Meanwhile, a new proppant is coming to town. Nanostructured ceramic proppant is an innovation in proppant supply that is under way at Oxane Materials Inc., a 16-person, start-up spinout of Rice University and that holds patents for OxFrac and OxSense. Investors include Energy Ventures Ltd., Carrizo Oil & Gas and Advanced Energy Consortium.

The nanoproppant has increased particle strength, expanded processing possibilities and enhanced particle reactivity/surface energy. Chris Coker, Oxane president, describes the difference as pebbles versus boulders. OxFrac can be placed at a reduced pumping rate, facilitating creation of more optimal fracture geometry. OxFrac is to be available in fourth-quarter 2009; OxSense in 2010 or early 2011.

Where does it fit in the marketplace? “We compete with non-consumption—areas you can’t prop today,” Coker says. He adds, however, that Oxane facilities could consider making traditional high-strength ceramic proppant as well as the nanoproduct.

There are currently three types of proppant in the marketplace: quartz sand (Ottowa, Jordan, England, Brady); resin-coated sand (curable, which has sand flowback problems, and pre-cured, which has enhanced strength); and ceramics (sintered bauxite, which is the strongest; intermediate-strength, or ISP; and light-weight, or LWP).

The propping agent is the only thing in the well job that has lasting value, says Dr. Steve Holditch, department head and Samuel Roberts Noble Foundation endowed chair in petroleum, Texas A&M University.

“Placing the right propping agent at the right place in the fracture is a key to financial success and to high flow rates,” he says. “Usually, more conductivity is better, even in tighter rocks. Fracture-fluid cleanup is a key issue that is being researched and worked on by a lot of people in the oil and gas industry right now…to help us minimize the problem.

“In the meantime, the solution really is better and more fracture conductivity.” Click to hear the webinar presentations, questions and answers, and for the presenters’ slideshows:

–Nissa Darbonne (, Executive Editor, Oil and Gas Investor, A&D Watch, Oil and Gas Investor This Week, Today,,,