People | Service & Supply | Oilfield Services | Proppant | Job Cuts / Downsize / Layoff
Carbo Suspends Plant as More Customers Switch From Ceramic to Sand
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CARBO Ceramics Inc. has decided to mothball its proppant manufacturing facility in McIntyre, Georgia.
Related:
- Ceramic Proppant Manufacturer Suspends Production; Could Carbo be Next?
- Carbo Feeling the Heat as Demand for Ceramic Falters
Commenting on what this means for the proppant market, Shale Experts Founder & CEO Rons Dixon said: "In this weak commodity price environment, operators are focused on cost savings. Ceramic proppant, Carbo's main product, is seeing a decline in demand and is projected to be down more than 35% this year as operators get better or equal results from sand.
"This shift to sand is evidenced by one of CARBO's prior customers, Rosetta Resources. The company annouced last year that it was switching from ceramic proppant to sand as it did not find any material difference in well productivity."
CARBO CEO Gary Kolstad commented, "As was mentioned in January on our fourth quarter conference call, CARBO began slowing production earlier this year to assist in managing cash and inventory levels. The Company's actions were in direct response to a depressed commodity price for oil and the resulting negative impact on industry activity levels, which is having a negative impact on demand for ceramic proppant. Unfortunately, we have not seen improvement in demand for ceramic proppant, nor do we anticipate any change in the near term. With this outlook in mind, we have decided to mothball our facility in McIntyre, Georgia until such time as market conditions warrant bringing it back online. In addition, we continue to manage the collective output of our other proppant facilities, which includes slowing down and idling production as deemed necessary. These decisions are difficult due to the impact on our employees and their families, to whom we owe much of our success over the last 36 years."