Black Mountain Sand Finds Success in the In-Basin Sand Business
Rhett Bennett of Black Mountain Sand saw a market shift and took advantage of it to develop a business. Bennett founded the oil and gas drilling company Black Mountain in 2007.
In late 2016, he noticed that the market for frac sand had shifted. In modern drilling, high-pressure water is used to open cracks in rock that contain oil. Frac sand keeps those cracks open to keep the oil flowing out. Previously, exploration and production (E&P) companies had used the courser Northern White Sand from Wisconsin that needed to be shipped down to Texas.
“At a certain point, E&P began to move toward a using finer sand,” CEO Bennett says. “That shift coincided with a search for cheaper sand alternatives. It was a market evolution along with the desire to have cost savings.”
Black Mountain looked to west Texas and the Monahans Sand Dunes, which are five to 100 miles from oil and gas wells. “From a logistical perspective, it couldn’t be more advantageous,” Bennett says.
Also from a cost perspective. Being able to skip shipping frac sand more than 1,000 miles by rail reduces costs by $50 per ton. With each well using about 10,000 tons of frac sand, the savings works out to $500,000 per well.
“A sand industry didn’t previously exist in west Texas,” Bennett says. “In 18 months, the industry grew because the cost savings were so compelling.” Today, Black Mountain employs 550 people to operate six frac sand mines.
Black Mountain distinguishes itself from other sand companies in two important ways. First, Black Mountain is reliable. “If you can’t supply sand in the moment of time needed, that is incredibly disruptive to oil and gas operations,” Bennett says. “We like to be best in class.”
Second, Black Mountain treats it customers as partners and aims to be both responsive and nimble in its execution. Take, for example, weather disruption. “At the beginning of the month, you have your month planned out and then you have a day where no sand is moving because of bad storms and the next day you need to move twice as much,” Bennett says. “We have to maneuver on the fly and make sure everyone is satisfied.”
The company’s largest challenge has been to recruit and retain talented people. When Black Mountain began mining sand in west Texas, there were no sand mines and no sand miners. Initially, that required taking oil field service workers and repurposing them for sand mining. It was a steep learning curve for new workers.
Today, there are 20 other competing sand mines built or under construction. “All those guys want knowledgeable help,” Bennett says. “The labor pool in west Texas is deep but it is ultra-competitive. We spend a lot of time thinking about how we can attract good people to us but also about retention and keeping them jumping to competitors.”
The easy part for Black Mountain is pay and benefits, in which the company strives to be a leader. Equally or perhaps more important is supplying professional development opportunities for its workers. “Give people the opportunity to grow with your company,” Bennett says. “I am a big believer in that you never stop learning. I really encourage our team to take advantage of that.”
In August, Black Mountain signed an agreement with Hexion to supply resin for frac sand. Resin coating is a chemical coating that increases the crush strength of sand when it is used in really deep formations, Bennett explains. “It provides a wider offering of products to the customers,” he says.
For the future, Black Mountain aims to continue to grow. “We have been excited to be leaders and championing in-basin frac sand,” Bennett says. “We hope to open more sand mines as applicable. I think we will continue to grow using the same playbook.”