Hourglass plans first Colorado frack sand operation

By Luke Geiver | March 16, 2018

Hallador Energy Co. is turning its coal mining expertise towards the frack sand industry. The Denver-based coal mining company that operates in Indiana and was formerly an exploration and production entity, announced this month plans to open the first frack sand mine in Colorado.

Through a $4 million investment into Hourglass Sands LLC, Hallador believes it can help DJ Basin operators looking for in-basin sand. Starting this year, Hourglass will begin mining sand from a state-permitted frack sand mine near Colorado Springs.

“We feel that frack sand mining is well within our core competency,” said Brent Bilsland, president and CEO of Hallador. “We also believe Hourglass can meaningfully contribute to Hallador in future years.”

This year Hourglass will work on ramping up mining operations to produce roughly 800,000 to 1 million tons of sand. The mesh size or specs of the sand have not yet been released by Hourglass. According to Bilsland, the investment in Hourglass is less than one month old.

Initially, Hourglass will look for a third-party to process the sand on its behalf. This summer, Hourglass will run test sand with operator clients in the DJ Basin. Bilsland doesn’t believe the venture will be profitable in year one as the system is worked out based on customer needs and demands.

“To us the trend we are seeing in the industry,” he said, “is that it seems most of the shale plays are using greater volumes of sand and are willing to use lower quality,” adding, “part of what we are trying to gauge is how much of our product the market will accept.”