The Texas Tycoon Making A New Fortune Selling Sand To ...

Bud Brigham made hundreds of millions from the sale of two oil companies. His sand company could make him a billionaire &#; if he can avoid the tiny lizards.

By Christopher Helman, Forbes Staff

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Growing up in Midland, Texas, there wasn&#;t a lot to do, Bud Brigham says. &#;We used to sled on the dunes&#;using a cardboard box. If you were really fancy you made a sled, put laminate on the bottom and waxed it.&#; Fifty years later, you can still sled the giant sand dunes at Monahans State Park. If you&#;re lucky you might spot a threatened three-inch dunes sagebrush lizard skittering amid the shinnery oak bushes.

What you will see for sure is sand trucks. Lots of them. Brigham&#;s company, Atlas Energy Solutions, fills up to 1,200 trucks a day, each with 24 tons of sand destined for oil fracking operations. Brigham&#;s no longer playing on the dunes; instead, he&#;s digging them up&#;to the tune of 10 million tons a year.

At the heart of Atlas&#; mine in bone-dry Kermit, Texas, is the incongruous sight of a 50-acre blue lagoon, where barges dredge the sand, sucking it up through hoses. It goes through cleaners, dryers and screens, then into tall silos for loading into trucks.

The sand doesn&#;t have far to go. For hundreds of miles around Kermit, the landscape, known as the Permian Basin, is dotted with thousands of oil-and-gas wells, with dozens of new ones being fracked every day. You cannot frack without sand&#;and you need preposterous amounts of it, on the order of 10,000 tons per well. At the drilling site that sand is mixed with water, then injec­ted at high pressure into the wellbore (often three miles down, then two or more miles horizontally). This subterranean blasting, Brigham explains, &#;props open fissures to let the oil and gas out.&#;

Brigham&#;s six-year-old company, which went public in March and now sports a $1.8 billion market cap, is the biggest sand supplier in the Permian, with 25% of the market and deep enough reserves to keep digging for 100 years. Brigham, 63, owns 15% of the company. Add in his proceeds from a decade of oil deals, and Forbes estimates his net worth is in excess of $500 million.

Atlas has big plans for its $300 million in IPO proceeds. The company has begun building a 42-mile electric sand conveyor belt made of reinforced rubber, called Dune Express. &#;It&#;s really four ten-mile conveyors,&#; says Atlas&#; president, John Turner, standing atop the Kermit silos looking west to where the line will extend over the New Mexico border into the world&#;s biggest fracking hotspot, where ExxonMobil, Chevron and Occidental Petroleum plan thousands of wells in the coming decades.

The oil companies are thrilled. Before local mines opened, they had to buy sand by the trainload from as far away as Wisconsin and pay $50 a ton just for transportation. Today Atlas, the dominant sand supplier, is gushing cash. In the first quarter of , it generated $63 million in net income on $153 million in sales. Mining costs are about $7 per ton, with about $3 a ton in royalties. With sand selling for about $43 a ton, Goldman Sachs analyst Neil Mehta sees Atlas&#; net income surpassing $500 million by , thanks in part to Brigham&#;s conveyor belt, which should be fully operational by the end of . The Dune Express will cut transportation costs in half to about $7 per ton.

Other cost savings are immeasurable. &#;This project is going to save lives,&#; says Hope Williams, a former Winkler County commissioner and member of the Kermit City Council. Since the sand boom started in , the public roads have become choked with 40-ton sand trucks, leading to horrific accidents on State Highways 302 and 285. Across the Permian region, 277 people died on the roads in , up 19% over . Moving sand by conveyor instead of truck could take 70% of sand trucks off the roads around Kermit.

The Vault

PAYDIRT

There are plenty of ways to get rich in the sand&#;just ask Astrid Rosing, who made a fortune off the stuff many decades before the fracking revolution. Rosing had risen from a humble stenographer to a Chicago-based supplier of &#;80,000 barrels of cement&#; and &#;600 cars of building partitions,&#; plus sand and other materials &#;for many of the largest building enterprises in the Middle West&#; when Forbes profiled her unlikely rise in . Some of the structures she helped raise, such as Chicago&#;s Crane Company Building, still stand. Rosing died at age 79 in .

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&#;We will need 1,500 cars of sand and gravel for that warehouse,&#; reported a Chicago contractor to his firm.

&#;Where shall we buy it?&#;

&#;Order it of Astrid Rosing and you&#;ll get service,&#; came the reply.

&#;Are you sure this Rosing man is reliable?&#;

&#;Man! That business belongs to a woman&#;built it up herself, and I want to tell you that when I need materials in double quick time I always deal with Miss Rosing.&#; &#;Forbes, March 30,

Sandman Brigham lives 300 miles away in Austin, a green oasis relative to Midland. His office sits on a bluff above the Colorado River, with downtown views. He drives a black Ford Bronco with a bumper sticker that reads, &#;Who is John Galt?&#; &#; a famous line from his favorite book, Atlas Shrugged, by libertarian icon Ayn Rand.

Brigham&#;s parents divorced when he was young. His mother raised him and five siblings in Midland, working for oilfield legends like T. Boone Pickens&#; partners Cyril Wagner Jr. and Jack E. Brown. Brigham studied geophysics at the University of Texas, then got a job at Western Geophysical studying seismic data. &#;I was just one little cog in the wheel. I felt I could add so much more value,&#; he recalls. In , he got a job at Rosewood, the oil-and-hotels holding company owned by Caroline Hunt, a daughter of oil baron H.L. Hunt, who was considered the richest man in the world when he died in . &#;There, I knew everything that was going on. I felt empowered.&#;

In , at age 30, he founded Brigham Exploration to drill for oil, using then-novel subterranean seismic imaging to spot reservoirs. He took the company public in , just in time for the great American oil boom of the early s, made possible by the combination of steerable drill bits and hydraulic fracturing (a.k.a. fracking). Brigham acquired 400,000 acres in North Dakota&#;s Bakken shale fields, competing against the likes of billionaire Harold Hamm. The shale boom was on. &#;When I started in the s, most holes were dry holes. Now it&#;s a factory on the ground,&#; Brigham says. In Norway&#;s Statoil (now Equinor) bought Brigham Exploration for $4.7 billion.

Brigham cleared about $100 million on the deal and was keen to put it to work in his next venture. Brigham Resources leased 80,000 acres in the Permian and started drilling, funded with Brigham&#;s cash and an additional $700 million in private equity. Brigham&#;s investors tripled their money in when Diamondback Energy bought the company for $2.5 billion. Brigham&#;s take was about $300 million.

He could have started another oil company, but having bought a lot of sand over the previous decade, he knew a good business when he saw it. When the fracking revolution began, drillers believed that the most effective so-called &#;propp­ant&#; would be relatively large-grained, perfectly round sand like Northern White, railed in from mines in Wisconsin. &#;Sphericity is so important for crush strength,&#; Brigham notes. At first, &#;We thought the coarser grains were better because [they offered] more space for oil and gas to get through.&#; They even experimented with microscopic ceramic balls.

&#;We tried everything,&#; he says, and were surprised when consensus emerged among Per­mian frackers that the most effective sand was right in their backyard. In Brigham and some friends founded Atlas Sand and began negotiating the rights to mine two giant dunes.

Separately, Brigham had been building another public company, Brigham Minerals, which focused on buying rights to oil and gas still in the ground. It raised $300 million in a IPO, then late last year merged with Denver&#;s Sitio Royalties in a $4.8 billion deal&#;freeing up Brigham to focus on Atlas.

You can&#;t corner the market on sand in the Permian without visiting the Sealy & Smith Foundation, which owns a 10-by-10-mile block of land encompassing the biggest sand dunes and the park where Brigham sledded as a kid, as well as myriad oil wells. About 140 years ago, John Sealy had acquired the large tract for a family retreat. The arid land had natural springs, and Sealy&#;s original idea was that they could provide water for the locomotives running on transcontinental rail lines. Oil&#;and now sand&#;has proven vastly more lucrative. The foundation has gone on to contribute more than $1 billion from oil, gas and sand royalties to building research hospitals for the University of Texas. It will make a risk-free royalty of about $3 on every ton that Atlas mines for the next 94 years.

Brigham&#;s 42-mile conveyor belt, made from steel and reinforced rubber, was designed by Atlas engineers with the help of a wind tunnel at Texas A&M. It took four years to negotiate with ranchers for rights of way.

Automation is key. From a control room at HQ in Austin, technicians remotely activate spouts on the silos to fill customers&#; sand trucks, each of which has been fitted with an RFID tag. &#;We love exponential efficiency,&#; Brigham says. Even after the Dune Express is complete, they&#;ll still need a lot of trucks to move sand from the conveyor belt over unpaved, rocky oilfield roads to drilling sites. Atlas has already bought 120 military-grade Mack trucks, which can haul triple trailers filled with 72 tons of sand. It&#;s also working with Robotic Research, developer of autonomous trucking systems for the military, in the hope that these trucks will eventually drive themselves.

Infrastructure and logistics aren&#;t Brigham&#;s only challenges. Drilling and sand mining are habitat killers for the tiny dunes sagebrush lizard, which lives among the shinnery oaks growing in the dunes. In June, The U.S. Fish & Wildlife Service said it was seeking comment until September on a proposal to place the lizard on the endangered species list. This could severely limit sand drilling and mining in the area. &#;Where the lizard is living there should be no more removal of its habitat and destruction,&#; says Michael Robinson of the Center for Biological Diversity.

Anticipating trouble, Atlas has already been working with the Department of Interior and other agencies on conservation plans that might enable the lizard and the oil industry to peacefully coexist. Brigham argues that many of Atlas&#; large-scale operations are on the giant open dunes, far from shinnery oak ecosystems.

For all its 5 million barrels per day of oil production, the Permian Basin remains a desolate, inhospitable place. But it has been a bona fide cash machine for the state of Texas and the University of Texas system, which encompasses 13 institutions and 240,000 students, and owns stakes in millions of acres of oilfields. It received $2.3 billion in oil-and-gas royalty income last year, virtually all of it from fracking. The University of Texas system&#;s endowment is now $57 billion.

&#;I think saner minds will prevail here,&#; says Harold Carter, a longtime private equity investor in Brigham&#;s ventures. &#;The landowners want to see the royalties, and the state can see the benefit that mining the sand provides. That lizard&#;s got plenty of land.&#;

HOW TO PLAY IT

By John Dobosz

Spanning West Texas and eastern New Mexico, the Permian Basin is the most prolific onshore source of domestically produced crude oil and natural gas in the United States. Occidental Petroleum (OXY) owns 2.9 million acres of land in the basin, edging out Chevron&#;s 2.2 million. Over the past five years, OXY revenue has grown 24% annually with help from the Permian. Earnings have grown at a 49% compound annual rate. OXY&#;s biggest shareholder is Warren Buffett&#;s Berkshire Hathaway, which owns 25% of its outstanding stock and was busy buying more in the first and second quarter of . Fellow billionaire Israel Englander of Millennium Management also loaded up on OXY earlier this year and now owns 1.9 million shares.

John Dobosz is editor of Forbes&#; Billionaire Investor newsletter.

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Contact us to discuss your requirements of sourcing frac sand proppant factories. Our experienced sales team can help you identify the options that best suit your needs.

AI Chatbots Are The New Job Interviewers

February Editor's Choice

The Merriam-Webster dictionary defines cyclicity as the state of occurring or moving in cycles. It could have saved some ink and simply written &#;see oil and gas.&#;

Less than a year after an historic collapse in demand led to excess supplies of everything from diesel to drill pipe, the word &#;shortage&#; is suddenly finding its way back to the industry&#;s vocabulary as global inventories draw down and operators return to the work of drilling and completing wells. In few areas is the shift in sentiment more pronounced than in the U.S. fracturing sand market.

Even with frac sand consumption in onshore shale plays skyrocketing from 42 million tons in to 116 million tons in , supply grew so fast that analysts began warning two years ago that the influx of sands from new in-basin mines was &#;crushing&#; the supply/demand balance. According to one count, some two dozen frac sand mines opened in the Permian, seven each in the Eagle Ford and Haynesville, and five in the Mid-Continent, bumping total U.S. supply to nearly 225 million tons in .

The message was clear: Even though the volume of sand being pumped per well was jumping off the chart, frac sand supplies were so plentiful that prices were being eroded, pressuring the margins of sand suppliers. But that was then, and this is now. While prices have remained subdued, the supply imbalance with demand may be swinging decisively back in the opposite direction.

In January, Kpler issued research that likely caught more than a few by surprise by declaring U.S. shale plays would face constraints following a strong activity recovery at the start of . Specifically, Kpler&#;s report stated, &#;Frac sand, a critical-path component in fracs, could be a chokepoint for the industry&#;s rally in the first quarter of as fleets compete to stay sanded in a weakened supply chain.&#;

So, how did the industry so quickly go from supply abundance to potential scarcity? Alexandre Andlauer, senior global energy analyst at Kpler, explains that frac sand supply is following the same trend line as U.S. oil and gas production output for the same basic reason: underinvestment. &#;Many sand mining companies were underinvested because of low prices, and a lot of mines were shut down or idled last year,&#; he states. &#;I am hearing that between one-third and one-half of the total frac sand capacity we had two years ago has disappeared.&#;

Hit first with diminishing economic returns from falling frac sand prices, and then by the abrupt halt to completion activity during the depths of the COVID-19 downturn, some proppant suppliers have been forced into bankruptcy, restructuring and mine shutdowns, Andlauer goes on. That includes both in-basin regional mines as well as Northern White mines in the Upper Midwest, many of which had debt-laden balance sheets from borrowing capital a few years ago to expand capacity when soaring demand bolstered sand prices.

&#;Some mines will never come back, but some eventually will be reopened and return to production,&#; he comments. &#;My view is that that the ramp up in drilling and completion activity has occurred so much faster than what anyone had expected&#;from 250 rigs and 60 frac spreads in July to 380 rigs and 170 frac spreads in January&#;that the sand market is challenged to respond.&#;

Consequently, a major roadblock that could impede a further activity response to strengthening oil and gas prices appears to be moving into place. &#;It looks as if supply chain disruptions will be unavoidable,&#; Andlauer says. &#;They involve more than frac sand, but that will be one of the biggest challenges in the months ahead as prices recover. U.S. shale oil production ended down 20% from . Technical constraints are making it very unlikely to reach levels again in the next 18 months, even if oil rises to $70/bbl.&#;

Powered By People

The industry may run on capital and technology, but it is powered by people. And that introduces another potential problem: repopulating a workforce that was downsized drastically in . A case in point is one of the most basic, but logistically critical jobs in the oil patch: delivering millions of tons of sand and other consumables to the well pad. &#;I am hearing more and more that a shortage of truck drivers could be an even bigger constraint than frac sand in U.S. shale plays,&#; Andlauer reveals.

He points to two issues that are compounding the problem. &#;I have friends that have made a lot of money driving trucks in the Permian, but they have left the industry and do not want to come back because of its volatility. They had been laid off multiple times over the past seven or eight years. Demand for truck drivers is strong everywhere, so they have options outside the industry.&#;

Money talks, of course, and the opportunity to earn a bigger paycheck than in other sectors always has been the industry&#;s calling card. &#;The trucks are available, but you have to bring drivers back from other sectors. To do that, you need to offer salaries high enough to make up for the volatility and their lack of confidence in the industry,&#; he points out. &#;But with producers trying to implement capital discipline, nobody wants to hear about cost increases for trucking or anything else.&#;

When it comes to the Permian labor market, no one knows the score better than Willie Taylor, who has led the Permian Basin Workforce Development Board as chief executive officer since its inception in and been involved in workforce development in the region for 48 years.

&#;The Permian is in better shape going forward than any other basin,&#; he assesses. &#;It may take a little time, but oil field activity will come back. Companies are going to be cautious, especially with the new administration, but we are going to have to go outside the area and do some heavy recruiting as activity returns and unemployment falls.&#;

In December , with the previous administration in the White House and coronavirus still an unfamiliar term to Americans, the unemployment rate in Midland was among the lowest in the country at 2.0%. Odessa was just behind at 2.9% and Texas unemployment was at 3.3%, a touch better than the all-time low U.S. average of 3.4%. After ballooning during the summer and fall, Taylor reports that the unemployment rate in December had improved to 8.0% in Midland and 11.5% in Odessa, lagging the state and national averages of 7.1% and 6.5%, respectively.

&#;Our region is so dependent on oil and gas,&#; he remarks. &#;That is a blessing and a curse. You can be a high school dropout and still earn $80,000 or more a year. Our salaries have been higher than the statewide average, but our education attainment also has been lower than the statewide average. As long as the industry is doing well, the workforce is doing well.&#;

But, of course, the opposite also is true. The past year has been rough, but as activity picks up and the unemployment rate in the Permian labor market improves, the need to recruit workers from outside the basin will re-emerge, according to Taylor. &#;We have work to do in the Permian Basin, but we have a large workforce base and the infrastructure in place to support future growth,&#; he notes.

Ample Housing

With booming oil and gas development spurring some of the strongest population growth in the nation between and , Taylor adds that local residential neighborhoods, commercial facilities and municipal infrastructures all have been expanded to the point where Midland-Odessa can comfortably accommodate moderate workforce growth as needed.

&#;We are hoping we do not have housing capacity shortages and some of the other negative issues we saw in the past, and that people will come into the region and find affordable housing and good wages,&#; he elaborates. &#;Once they get here, they will realize the Permian is a nice region in which to live and work.&#;

Looking specifically at industry trucking, Taylor agrees that driver availability is tight and a shortage of experienced drivers is a possibility. &#;Truck driving is on our targeted occupations list, and you do not get on that list unless you have average local openings of 50-100 jobs statewide and are paying at least $17.00 an hour,&#; he offers.

But truck driving has been on the Permian Basin Workforce Development Board&#;s priority list almost constantly over the years, he adds, noting the organization is always recruiting and training new drivers. &#;The thing about the oil and gas industry is that it&#;s willing to pay high wages to attract talent, and higher wages in the oil industry tend to increase wages across the entire region. A workforce shortage will do that. As oil and gas companies become more active, wages and incentives tend to increase and bring in new workers.&#;

Tight Sand Ahead

As completion activity rebounds, operators may have trouble getting frac sand, warns Hunter Wallace, chief operating officer of Atlas Sand, which owns two sand mines in West Texas. He predicts 40/70 proppant will be especially tight.

&#;Even when they were brand new, most in-basin sand plants had downtime or other issues that caused them to miss deliveries,&#; he recalls. &#;Now that they are three or four years old, those issues may be worse, especially since many of their owners had to defer maintenance and lay off employees during .&#;

Atlas is the only company with two sand plants that managed to keep both open throughout , reports John Turner, the company&#;s chief financial officer. &#;We have lower operating expenses and a better capital structure than most of our peers, so although the volumes we sold dropped significantly, we were able to keep our plants open and our shifts active,&#; he explains.

With less need to produce sand, Wallace says the company&#;s employees spent four months focusing on making its plants near Kermit and Monahans, more efficient. &#;We built the plants with automation in mind, so we had a pool of data to look at on almost every piece of equipment,&#; he reports. &#;However, we did not have the time to fully leverage that data until last year.&#;

As part of a broader effort to minimize costs, Atlas Sand has upgraded both of its sand mines from yellow iron mining to dredge mining, a process that requires less equipment. According to the company, this change has cut mining costs 75%.

To illustrate how valuable the data can be, Wallace offers a sand dryer. &#;From the data, we know exactly when and how long that dryer was down. By looking at data points around those failures, such as moisture readings or the amount of sand in the surge bins, we can identify each failure&#;s root cause. By doing that over a month, we can spot the most common problems and find ways to address them.&#;

One of the most impactful changes Atlas made during was converting from traditional yellow iron mining to dredge mining. Yellow iron mining requires as many as a dozen men running diesel-powered heavy equipment, such as excavators, dozers and haul trucks, to mine, transport, stockpile and feed sand from the mine to the plant for processing. In contrast, Wallace describes, the new process only requires one person to run an electric-powered dredge that sucks up the sand and water and transports it straight into the plant.

Each plant&#;s dredge floats peacefully in a pond that formed naturally in the depression created by their sand mine, Wallace says. He reports that upgrading to dredging cut mining costs at both plants 75%.

&#;We are uniquely capable of implementing the dredging process because our deposits are the only ones in the Permian Basin with water naturally available,&#; he says. &#;Instead of ending 20-50 feet below the surface, our deposits extend as far as 145 feet. These large underground depressions filled with extremely porous sand act like giant tanks, collecting water from the area.&#;

Atlas uncovered water only a few feet below the surface while constructing its two plants but needed to verify the water supply would be stable before upgrading to dredging, Wallace relates.

Centralizing Loading

Another major improvement Atlas made last year was moving its on-site loading teams to a command center in Austin, Tx. Wallace notes that costs much less than housing people in man camps in West Texas and paying for their transportation home when their shifts end. It also means workers can spend more time with their friends and families.

&#;Moving both plants teams&#; to the same facility gives us several efficiencies,&#; he adds. &#;Before, if Monahans had an hour of heavy traffic while Kermit was slow, the loaders at Kermit would be idle. Now they can help the Monahans team keep trucks moving in and out as efficiently as possible.&#;

The command center makes it easier to pair truckers with loaders who have the knowledge to help them, Wallace mentions. For example, if a driver who struggles with English has a complex issue, his initial contact can transfer him to a Spanish-speaking colleague so they can resolve that issue more quickly.

According to Wallace, the command center has allowed Atlas to maintain an average total time on the mine site of 10 minutes while reducing its operating costs and improving truckers&#; experience.

Reliability

Wallace admits, &#;Every sand plant has its issues. After all, sand is one of the most destructive things you can put into a machine, and it is all our equipment deals with 24/7/365.&#; However, he also expresses pride in Atlas&#;s performance, proclaiming, &#;Since we fired up our plants in , we have yet to cancel or miss an order that was placed with us, and I don&#;t think many or any of the other Permian sand plants can say that.&#;

That is partly because the company&#;s plants include enough redundancy to compensate for equipment downtime, but it also reflects a disciplined approach to sales, Wallace says. &#;Because of unexpected delays or other issues on the well site, customers often end up pulling less sand than they ask plants to allocate to them,&#; he relates. &#;To ensure all their sand gets sold and maximize their profits, it is tempting for plants to overbook their capacity.

&#;We do not do that,&#; Wallace assures. &#;We are willing to accept lower short-term sales to ensure we can keep our promises even when operators hit their stride and need exactly what they expect to need.&#;

According to Wallace, that approach has helped the company build strong relationships with customers. &#;Our customers know we are going to deliver what we say we are going to deliver, so when we ask what they expect to need over the next 30-60 days, they give us a straight answer,&#; he reports.

Atlas uses this information to secure capacity from its trucking partners. &#;Through preplanning and communication, we have gotten enough truckers to make deliveries even in a market where truckers are in short supply,&#; Wallace says. &#;I cannot say we are entirely insulated from trucking issues, but we should be able to manage as long as our customers continue to give us a clear line of sight into their needs.&#;

Simultaneous Fracs

In their quest for efficiency and lower costs, many operators are moving from zipper fracs to simultaneous fracs, observes Charley E. McIntyre, director of business development and shared services at Cudd Energy Services. &#;Instead of switching wells in between stages, operators are completing both wells at once,&#; he clarifies. &#;This requires more equipment but saves enough time that in surveys, most completion engineers rank simultaneous fracturing as the innovation that will have the most impact in .&#;

Rocky Shields, Cudd&#;s director of operations, points out that simulfracs requires strong supply chains. &#;If everything goes as planned, the pad will need twice as much water, sand and chemical every day,&#; he explains. &#;Those supplies need to arrive consistently enough that the blenders and sand unloading systems can keep pace with the frac.&#;

Cudd Energy Services reports it is taking several steps to improve its frac spreads&#; efficiency and reliability. For example, it is reducing fuel costs by converting fleets to burn natural gas alongside diesel, and buying higher-horsepower pumps, which can operate at their most efficient levels more frequently.

There&#;s enough extra equipment on site that optimizing footprints is critical, Shields reports. He mentions that in and , Cudd retired many of its oldest spreads while purchasing 3,000 horsepower fleets.

&#;Compared with the industry-standard 2,500-horsepower spreads, these new fleets pack more horsepower into a smaller footprint, which means we need less equipment on site,&#; he says. &#;The pumps also are more efficient and reliable because they use less of their capacity for many jobs. For example, pumping at 1,800 horsepower only requires 60% capacity, which reduces fuel burn and places less strain on the equipment.&#;

These new pump trucks use engines that meet the Environmental Protection Agency&#;s Tier IV standard, so they generate fewer emissions per horsepower during operation and manufacturing, McIntyre notes. He says they also run quieter than many of the Tier II engine-based pumps often seen in the field.

&#;To support our customers&#; environmental, social and governance goals, we are converting diesel-fired equipment to dual-fuel systems that can burn natural gas. In addition to reducing emissions, this will let operators use a more affordable fuel source,&#; McIntyre reports. &#;To limit emissions and fuel consumption even more, we are testing technologies that reduce engine idling.&#;

The 3,000-horsepower fleets&#; modern engines, transmissions and pumps provide more detailed information about operational status metrics, such as internal pressures and temperatures, that can be used to diagnose problems, Shields says. &#;We understand the benefits of listening to our equipment, so for the past three years, we have been installing control systems that collect data from it, then analyzing that data to see why failures occur and what we can do to improve run time,&#; he relates.

&#;Today, we are putting better transmission equipment on location so we can get data closer to real time,&#; Shields continues. &#;Ultimately, we&#;d like to have enough real-time data and historical analogs to use machine learning algorithms to spot problems as they occur. That will let us resolve issues before they disrupt operations or reduce efficiency.

Meeting Diverse Needs

&#;I am excited about the investments we are making in high-horsepower equipment that can perform large completions more efficiently, but we also take pride in servicing customers who might only need to stimulate a vertical well or a short lateral here and there,&#; Shields says.

McIntyre indicates these customers often use intricate fluid systems for their completions. &#;We pride ourselves on retaining employees who have the chemical expertise to meet their needs,&#; he says.

Over time, Shields predicts that horizontal wells&#; completion designs will become more nuanced. &#;Right now, many companies are concentrating on delivering returns to investors as quickly and reliably as possible, which often means controlling costs and using conservative designs,&#; he says. &#;As prices improve, I think we will hear more conversations about tweaking proppant selection, stage placement and fluid systems to flatten decline curves and boost each well&#;s long-term production. Ideally, these changes also will reduce total costs.&#;

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