CASE STUDY: Source Energy Services’ Last Mile Supply Chain Optimization Solution Ensures Continuous, Orderly, Repeatable, and Cost-Efficient Well Completion Activities in the Pipestone Area

The Project: 

Over the past five years, proppant intensity in the Montney formation has increased exponentially – especially in the prolific Pipestone Area west of Grande Prairie, AB. To maximize efficiency and reduce Drilling and Completions costs, the trend at recent well sites in the Pipestone Area is to pump up to 6,000 MT of proppant per day at a single location with two pressure pumping crews. This poses a significant supply chain challenge as proppant and last mile logistics can account for 25% to 30% of the entire Drilling and Completions costs in this area, equivalent to roughly $1 MM per day. The purpose of our Pipestone Area project with our junior E&P customer and trucking partners was to utilize our Last Mile Proppant Supply Chain Optimization Solution in order to ensure continuous, orderly, repeatable, and cost-efficient well completion activities.

The Approach:

Source’s Last Mile Proppant Supply Chain Optimization Solution capitalizes on the company’s large storage and throughput capacity, as well as our cutting-edge technology, to accelerate and optimize the logistics involved in loading and transporting proppant the last mile by truck to the well pad.

For the Pipestone Area project, Source delivered 45,000 MT of Northern White proppant from our Wembley terminal to the Pipestone area well site. Source’s Wembley terminal has the largest storage (90,000 MT) and throughput capacity (15,000 MT/day) of any single proppant terminal in Western Canada. The terminal also features 4 truck load outs, which enables Source to have a truck loaded and, on the road, every 4 minutes.

In addition, Source used our proprietary Advanced Logistics Performance System (ALPS) throughout the project. The ALPS technology enabled us to ensure the trucks adhered to the correct, pre-established route from our Wembley terminal to the Pipestone well site, as well as monitor truck velocity ensuring they stayed within the speed limit. Realtime management of trucks with our proprietary ALPS technology also enabled zero standby costs, which meant we were able to keep the project within budget and project scope. We also had a record high delivery day of proppant – 5,100 MT – to the well pad during this project. Source is investing in making 4,000 MT plus per crew per day commonplace for all our customers, so this will be commonplace as we move forward with our Last Mile Proppant Supply Chain Optimization Solution. In the end, the ALPS technology ultimately optimized the last mile proppant supply chain so that the proppant arrived at the well pad safely, without incident, and in an almost on-demand manner.

The Results:

This project proved that, like the majors, junior E&Ps can unlock the efficiency of self-sourcing proppant. The Source logistics system worked together to deliver record volumes while optimizing the supply chain. Source’s technology and systems reduced the total number of trucks on the road and drivers benefitted as their capacity to work was maximized. In addition, The Pipestone area well site project came within 1% of our project initial plan. Industry expectations have within ~3% considered to be a success, so we were thrilled with this outcome.

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Source Energy Services is a logistics company that focuses on the supply and distribution of high quality Northern White frac sand. Source provides its customers with a full end-to-end solution supported by its Wisconsin mines and processing facilities, its Western Canadian terminal network and its last mile logistics capabilities. In addition to its industry leading frac sand transload terminal network and in-basin frac sand storage capabilities, Source also provides storage and logistics services for other bulk oil and gas well completion materials that aren’t produced by Source. Source has also developed Sahara, a proprietary well site mobile sand storage and handling system.

Source’s full-service approach allows customers to rely on its logistics capabilities to increase reliability of supply and to ensure the timely delivery of their requirements for frac sand and other bulk completion materials at the well site.