2012

PROPPANT MARKET REPORT CONFIDENTIAL

The information contained in this report has been supplied as an Executive Summary. Select

information may be based on single sources and can be speculative in nature. The final decision about

acting on this information, and the responsibility for results achieved, is your own. We assume no

management responsibility or liability for the business decisions or for policies or practices that may be

implemented. The information is solely for the internal use and review of the intended recipient party. It

is not to be copied and/or distributed outside of the intended recipient company without prior

written consent. It is strictly confidential and proprietary and is the property of PropTester®,

Inc. and KELRIK, LLC.

Confidential and Proprietary to PropTester, Inc. & KELRIK, LLC. Executive Summary

$3500 USD. Call 281-256-8880 or e-mail achavey@proptester.com to order.

1

Table of Contents and Forward Publish Date February 6, 2013

Table of Contents • FORWARD…………………………................................

• MARKET DYNAMICS.................................................

• The Year in Review: 2012….......................................

• Chart: 10 Yr. Proppant Consumption...…….……………

• Chart: Key Factors Impacting Proppant Demand............

• Proppant Demand Fundamental.………………………...

• Chart: Natural Gas Price Trends..................................

• Chart: Oil Price Trends…………………………………..

• Chart: US Oil and Gas Drilling Activity-All Wells……….

• Chart: US Oil and Gas Drilling Activity-Trajectory………

• Chart: US Horizontal Drilling-Oil vs. Gas………………..

• Chart: Canadian Horizontal Drilling-Oil vs. Gas………... • Chart: US/Canadian Horizontal Drilling-Oil vs. Gas…….

• Chart: Key Factors Impacting Proppant Supply...………

• Proppant Supply Fundamentals………………………….

• FRAC SAND………………………………………………..

• The Frac Sand Industry……………………………………

• Chart: Frac Sand Consumption 1990-2012………………

• Chart: Basic Frac Sand Types…………………………...

• Chart: Basic Frac Sand Properties……………………….

• Table: Frac Sand Suppliers………………………………

• Table: Frac Sand Suppliers (International)……………..

• Table: Pending Frac Sand Suppliers…………………….

• Chart: Realistic Frac Sand Capacity/Growth……………

• Chart: Spare Capacity……………………………………

• CERAMIC PROPPANTS…………………………….

• The Ceramic Proppant Industry……………………..

• Chart: Ceramic Consumption 1980-2012……………..

• Chart: Basic Ceramic Proppant Types………………..

• Chart: Basic Ceramic Proppant Properties…………..

• Table: Ceramic Proppant Suppliers (Western)………

• Table: Ceramic Proppant Suppliers (Eastern)…..……

• Chart: Spare Capacity…………………………………..

• RESIN COAT………………………………..................

• The Resin Coat Industry…………………….…….…..

• Chart: Resin Coat Consumption 1988-2012………..…

• Chart: Basic Resin Coat Types…………....................

• Table: Active Resin Coat Suppliers….........................

• Table: Other International Suppliers……………………

• Chart: Spare Capacity…………………………………..

• SUMMARY……………………………………………….

• Summary 2012…………………………………………….

• APPENDIX…………………..…………………………..

• Select Industry and Operating Metrics...................

Confidential and Proprietary to PropTester, Inc. & KELRIK, LLC. Executive Summary 2

3

4

5

6

7

8

9

10

12

13

14

15

16

26

27

32

33

35

36

37

38

48

49

50

51

52

53

55

56

57

58

59

63

64

65

67

68

69

71

72

73

74

75

76-88

Forward

Confidential and Proprietary to PropTester, Inc. & KELRIK, LLC. Executive Summary 3

The 2012 Proppant Market Report is a detailed overview of the 2012 proppant industry in relation to prior

years. Marketing intelligence has been gathered from a variety of industry resources which include

historical PropTester, Inc. and KELRIK, LLC data bases, key pressure pumping and operator personnel,

logistics providers, proppant suppliers and other public and private resources.

Primary information is received directly from proppant manufacturers. Although this data is used to

compile total proppant consumption estimates, specific proppant supplier’s sales are not disclosed.

Primary consumers of proppant, namely pumping pressure companies and operators, are solicited as to

their particular proppant trends. Transportation metrics from various logistics sources are also

referenced. This data is further cross-referenced with various sources of current well drilling and

completion activity within key areas of activity, primarily in North America.

Where feasible, we include proppant capacity for suppliers. These figures are either disclosed or

estimated based on industry sources and, unless noted otherwise, are annualized commencing January

2013. Proppant production capacities can vary substantially, and this fact must be taken into

consideration when reviewing this information. Actual production can vary dramatically based on

operating conditions, mid-year capacity expansions, market diversification or substitution, and product

demand mix. This is particularly the case with natural sand producers, where product mix and deposit

yield impact gradation availability and production efficiencies. Similarly, resin coat capacity is subject to

available substrate supply, whether natural sand or synthetic.

As with past issues, forward looking statements are limited in this report.