Company hopes local sand can help it curb some costs

By Collin Gallant on November 1, 2018.

cgallant@medicinehatnews.com @CollinGallant

A market shift in the drilling industry has some in the local industry examining how to turn sand from the region around Medicine Hat into paydirt.

Victory Silica, which operates the 7P frac sand plant in Seven Persons, announced Monday it will evaluate deposits on Short Grass Ranch as a potential source for “fine grade” sand used in hydraulic fracture drilling.

The agreement will see a survey completed in early 2019, during which time Victory will also market the potential production to drillers who, officials say, are increasingly now seeking lower grades of domestic sand to help contain costs.

Ken Murdock has managed the Seven Persons facility since it restarted in 2014, and said he has long made a study to find a source of premium sand in the region, but changed his focus when the market started shifting.

“In the Medicine Hat area, to be honest we can’t find it,” said Murdoch, whose supply of premium material is currently brought in by rail from Wisconsin.

“But we’ve been receiving calls for customers looking for what’s called ‘fine sand,’ which is being used quite heavily Red Deer north (areas).”

That sent Murdock back to the survey histories, and a mid-1970s government report that detailed several sites in the southeast for sand quality, including several at CFB Suffield and one on Short Grass Ranch property, northeast of Medicine Hat.

That specific site didn’t turn up the depth required to make development viable, but further examination of other property owned by Short Grass made the grade.

“I thought it was just sand, but it’s apparently the right kind of sand,” said Randy Lehr, a co-owner of Short Grass Ranch, which bought the land in question about seven years ago to augment its traditional acreage.

As far as he knows the area hasn’t ever been studied, but there is a crude pit in a hillside were some work took place in the past.

The options and development agreement between the two parties gives Victory 180 days to develop a business plan and exercise its option. The production would be trucked to Seven Persons, then trucked to customers at drilling sites, said Murdock.

“It’s a domestic resource with a reasonable market that stabilized at this point,” said Murdock.

A release states that the endeavor does not mark a departure from an original long-term plan to bring in material from a proposed nickel mine in northern Manitoba that its parent company, Victory Nickel, is developing.

Murdock describes the level of drilling activity in the deep south of Alberta as very low, but work levels are steady in east central Alberta and west central Saskatchewan, areas known as Viking.

Victory is still running the facility on an as-needed basis, selling built-up inventory and reprocessing some of it for sale.

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