Smart Sand, Inc. (Smart Sand) operates as a fully integrated frac and industrial sand supply and services company.
The company offers complete mine-to-wellsite proppant supply and logistics solutions to its frac sand customers. It produces low-cost, high-quality Northern White sand, which is a premium sand used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells, as well as for a variety of industrial applications. The company also provid...
Smart Sand, Inc. (Smart Sand) operates as a fully integrated frac and industrial sand supply and services company.
The company offers complete mine-to-wellsite proppant supply and logistics solutions to its frac sand customers. It produces low-cost, high-quality Northern White sand, which is a premium sand used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells, as well as for a variety of industrial applications. The company also provides proppant logistics solutions to its customers through its in-basin transloading terminals and its SmartSystems wellsite proppant storage capabilities.
The company markets its products and services to oil and natural gas exploration and production companies, oilfield service companies and industrial manufacturers. The company’s proprietary SmartDepot portable wellsite proppant storage silos, its proprietary SmartPath wellsite proppant management system, SmartBelt conveyor system, access to all Class I rail lines, and the industry experience of the company’s senior management team make it as a highly attractive provider of sand and logistics services.
Segments
The company operates through Sand segment and Smart Systems segment.
The company sells its sand through short-term and long-term contracts or spot sales in the open market. It was incorporated in Delaware in July 2011 and began operations at its Oakdale, Wisconsin facility in July 2012 with an annual processing capacity of 1.1 million tons. After several expansions, the current annual processing capacity at the Oakdale facility is approximately 5.5 million tons. This facility has access to both the Canadian Pacific Class I rail network (through an onsite, unit train capable rail facility) and the Union Pacific Class I rail network (through the Byron, Wisconsin transload facility).
The company sells frac sand through a network of in-basin rail terminals. It directly controls five in-basin transloading facilities and has access to third-party transloading terminals in all operating basins. The company operates a unit train capable transloading terminal in Van Hook, North Dakota, to service the Bakken Formation in the Williston Basin, which became operational in April 2018. In 2020, as part of its acquisition of the Ottawa, Illinois mining facility, the company obtained rights to use a rail terminal located in El Reno, Oklahoma. In January 2022, it began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania, to service the Appalachian Basin, including the Marcellus and Utica Formations. The company completed an expansion of this terminal in the fourth quarter of 2023. In December 2023, it acquired the rights to operate a unit train capable transloading terminal in Minerva, Ohio, which became operational in the second quarter of 2024. In January 2024, the company acquired the rights to operate a unit train capable transloading terminal in Dennison, Ohio, which became operational in the third quarter of 2024.
In late 2021, the company started its IPS business to provide sand to customers for various industrial applications, such as glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf and landscape, retail, and recreation. It completed an expansion of its IPS processing at its Ottawa, Illinois plant in the fourth quarter of 2023 to provide blending and cooling capabilities, thereby increasing its product offerings in the industrial marketplace.
SmartSystems segment
The company provides wellsite proppant handling solutions, services, and equipment under flexible contract terms custom-tailored to meet the needs of its customers. It also offers portable wellsite storage and management solutions through its SmartSystems products and services. The Smart Systems enable customers to unload, store, and deliver proppant at the wellsite, and allow for the rapid setup, takedown, and transportation of the entire system. This capability enhances the efficiency, safety, and reliability of the company's customers. Through its SmartSystems wellsite proppant storage solutions, the company offers the SmartDepot and SmartDepotXL silo systems, the SmartBelt conveyor, the SmartPath wellsite proppant management system, and rapid deployment trailers. The SmartDepot silos feature passive and active dust suppression technology and support gravity-fed operation. The self-contained SmartPath wellsite proppant management system is a mobile sand transloading solution that works with bottom-dump trailers. These systems include a drive-over conveyor, surge bin, silo storage, bucket elevators, and integrated dust collection.
In 2024, the company developed new dual bucket elevators to enhance its vertical material handling capabilities. It also increased its silo storage capacity and streamlined proppant delivery directly to the blender. This addition provides greater flexibility for customers with varying wellsite configurations while maintaining the efficiency, safety, and reliability that define its SmartSystems solutions. The company's rapid deployment trailers are designed for quick setup, takedown, and transportation of the entire SmartSystem. They detach from the wellsite equipment, allowing for removal from the wellsite during operations.
Business Strategies
The company's business strategy is to diversify its customer base to include industrial product solutions; expanding and optimizing the company’s existing logistics infrastructure and developing additional origination and destination points; focusing on organic growth by increasing the utilization of its mine and frac sand processing facilities; focusing on being a low-cost provider and continuing to make process improvements; and creating flexible sales activities.
Customers
The company's core customers are oil and natural gas exploration and production companies, as well as oilfield service companies. In late 2021, it began diversifying its sand sales to include IPS for customers. While sales of IPS to customers have been a small portion of its overall sand sales since the beginning of this business, the company intends to continue increasing its expansion of IPS in 2025 and beyond. It sells frac sand under long-term take-or-pay contracts as well as in the spot market, and provides proppant logistics solutions through its in-basin transloading terminals, SmartSystems wellsite proppant storage solutions, and other logistics services.
Customers renting SmartSystems are able to tailor their contracts, including adjusting the number of SmartDepot silos, SmartPath wellsite proppant management systems, and SmartBelt conveyors to be supplied, to meet their short-term and long-term needs. The company recognizes rental revenue when the equipment is made available for the customer to use or when other obligations in the contract are met.
For the year ended December 31, 2024, Equitable Gas Corporation, Encino Energy and Liberty Oilfield Services, accounted for 31.9% of total revenue, and the remainder of the company’s revenues were from 82 customers.
Competition
The company's main competitors include Badger Mining Corporation, HC Minerals, Inc., Covia Holdings Corporation, U.S. Silica Holdings, Inc., Capital Sand Company, Source Energy Services, and Solaris Energy Infrastructure, Inc.
Seasonality
The company's business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of its wet sand processing capacity.
Intellectual Property
The company owns patents and has patent applications pending related to its SmartSystems wellsite proppant storage solutions. All of the issued patents have an expiration date after August 2030.
Environmental and Occupational Health and Safety Regulations
The company's operations are subject to the federal Clean Air Act (CAA) and related state and local laws, which restrict the emission of air pollutants and impose permitting, monitoring, and reporting requirements on various sources.
Independent of Congress, the U.S. Environmental Protection Agency (EPA) has adopted regulations controlling GHG emissions under its existing authority. Compliance with new legislation may require the company to incur substantial costs or suspend or terminate its operations.
The company's most recent annual report required under the Tier 1 protocol was submitted to the Green Tier Program contact on May 31, 2024.
Properties and Logistics
As of December 31, 2024, the company owned and operated three frac sand mines and related processing facilities in Oakdale, Wisconsin; Ottawa, Illinois; and Blair, Wisconsin. In addition to the onsite transloading capabilities at its Oakdale and Blair mines, the company owns nearby transloading facilities in Byron, Wisconsin, and Peru, Illinois. It also operates in-basin transloading facilities under long-term lease agreements in Van Hook, North Dakota; Waynesburg, Pennsylvania; and El Reno, Oklahoma. In December 2023, the company acquired the rights to operate a unit train capable transloading terminal in Minerva, Ohio. In January 2024, it acquired the rights to operate a unit train capable transloading terminal in Dennison, Ohio. Both Ohio terminals became operational in 2024.
The company also owns approximately 959 acres in Jackson County, Wisconsin (Hixton). The Hixton site is fully permitted to initiate operations and is available for future development.
The company has two long-term surface mining leases for properties located in the Permian Basin in Texas that are available for future development. The first site consists of 1,772 acres in Winkler County, Texas, and is adjacent to the Texas & New Mexico Railway (TXN) short line with direct access to State Highway 18. The second site consists of 2,447 acres in Crane County, Texas, which has direct access to Interstate Highway 20. Based on preliminary testing.
Oakdale, Wisconsin
The company, through Smart Sand, Inc. and its wholly-owned subsidiary Smart Sand Oakdale, LLC, operates a surface mine and silica sand processing plant near Oakdale, Wisconsin. The Oakdale mine includes a total of 1,256 acres that are owned outright by Smart Sand, Inc., which includes subsurface mineral and water rights.
Ottawa, Illinois
The company, through Northern White Sand LLC, a wholly-owned subsidiary of Smart Sand, Inc., operates a surface mine and a silica sand processing plant near Ottawa, Illinois. The Ottawa mine includes a total of 819 acres that are owned outright by the company, which includes subsurface mineral and water rights. The site has no leased property, and there are no royalties associated with this property.
The company's Ottawa facility is a surface mining operation involving heavy equipment and the hydraulic transfer of material to the processing plant. The processing plant uses natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand. This premium sand is used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells, as well as for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf and landscape, retail, and recreation.
Blair Wisconsin
The company began operating the Blair mine in the second quarter of 2023. The Blair mine includes a total of 1,285 acres that are owned outright by Smart Sand Blair, a wholly-owned subsidiary of Smart Sand, Inc. This ownership includes subsurface mineral and water rights.
The company's Blair facility uses a surface mining technique to produce high-quality Northern White Sand. The processing plant utilizes natural gas, propane, and electricity to produce various grades of high-quality Northern White Sand. This premium sand is used as a proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells, as well as for a variety of industrial applications, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf and landscape, retail, and recreation.
History
Smart Sand, Inc. was incorporated in 2011.
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