Our reserves.

All of the sand and gravel is contained from the surface to a depth of fifty feet; the mining process is "surface mining" which uses tractors and conveyors to extract the material. The process is safer and less expensive than other mining processes, and the project meets all requirements for the permits that are required in the state of Texas for this type of mining.

Our frac sand.

Fracturing or 'fracing' is a process where a solution made up primarily of sand and water is injected into a well to increase fractures in the oil or natural gas bearing rock. These fractures allow for the increased flow of oil or gas out of the formation, thus maximizing production. Fracing has been used on roughly 90 percent of all wells in operation today; it accounts for 30% of domestic recoverable oil and natural gas. The sand used for fracing is mined and not manufactured, and the supply is limited in the U.S. Additionally, when raw frac sand is resin coated, its value and demand significantly increase because the resin coating dramatically strengthens each grain, and this resistance to crushing prevents loss of permeability in fractures.

Rebounding oil field activity fuels U.S. frac sand demand.

U.S. demand for oil and gas well stimulation materials, specifically frac sand, is projected to post double-digit gains and exceed $7 billion in 2014, buoyed by renewed efforts to reduce dependence on foreign energy sources, particularly from unfriendly or unstable countries. Well stimulation products and services are necessary to maximize output from aging oil and gas fields, and to optimize production in unconventional settings such as shale. The Haynesville Shale in East Texas/Western Louisiana and the Marcellus Shale in the Eastern U.S. are among the areas generating the most enthusiasm in terms of their productive potential; and hydraulic fracturing is critical to the successful development of these formations.

Houston sand & gravel.

During the past decade, sand reserves have been depleted in the Houston area due to rapid metro growth and residential building over prime reserves. While the sand and gravel market in Houston has felt the impact of the current economic downturn, it should be noted that Texas and the Houston area have not gone through the boom-and-bust cycle that has devastated the 'sand states.' Infrastructure, including major highway expansion in Houston metro continues.

Our plant.

The innovative design of our plant choice provides significant benefits. The product uses a hydraulic classification that allows maximum yield to sellable product with minimal waste and allows for the processing of two or more sands at one time. This newer type of technology operates with fewer moving parts, yielding lower maintenance costs, and due to the high degree of automation, operates without the assistance of plant personnel. Our proprietary software technology controls the operations of the plant. The system will allow for the control of the plant to produce custom blended orders based on customer requirements, and it will allow for each type of product to be handled only once.

Conclusion.

 In spite of the economic downturn, the trends favorable for a successful sand mining operation  - the Houston marketplace, the need for more deposits found in this part of the country, the flurry of frac sand activity, a desirable location to recruit talent, the M&A focus of the industry's largest companies, to name a few - all support the conclusion that there can be a profitable future for sand and gravel operations. 

Maximum Recovery, Minimum Waste, and Ease of Producing Spec Product

The technology utilized to process sand and gravel had remained relatively static until a few years ago when density separation technology was introduced. This new technology offers the ability to significantly increase output and margins. HGRI is planning on utilizing a state of the art density separator technology produced by CFS Inc.

CFS designs and builds high tech wet processing plants to beneficiate minerals and classify sands, such as concrete (lignite free) , mason, manufactured , frac, golf course, foundry, industrial, and construction sands. The CFS system incorporates very efficient wet classification equipment such as density separators, cyclones, dewatering screens and automated Blend on the Run™ PLC systems to produce maximum yield and minimum waste.

This equipment utilizes an innovative design of a hydraulic classification that allows maximum yield to sellable product with minimal waste. It allows for the processing of two or more sands at one time. It also operates with fewer moving parts, yielding lower maintenance costs, and due to the high degree of automation, operates with minimal need of plant personnel.

Fracturing or 'Fracing'

Hydraulic fracturing is a method used to create fractures that extend from a borehole into rock formations, which are typically maintained by a proppant, a material such as grains of sand, which prevent the fractures from closing. The method is informally called fracing (pronounced "fracking") or hydrofracing.

The technique of fracturing is used to increase or restore the rate which fluids, i.e. oil and gas, can be produced from the formation surrounding the borehole. By creating or restoring fractures, the reservoir surface area exposed to the borehole is increased, and the fracture provides a conductive path connecting this reservoir surface area to the well. This effectively increases the rate that oil can be produced from the reservoir formations.

Hydraulic fracturing as used today in the oil and gas industry was first developed and used commercially in the United States in the late forties. The first industrial use of hydraulic fracturing increasing production from oil wells was quickly adopted, and the process has been used on roughly 90 percent of all wells in operation today. Fracing accounts for 30 percent of domestic recoverable oil and natural gas; and has facilitated the extraction of more than 600 trillion cubic feet of gas and 7 billion barrels of oil.

Frac Sand

Fracturing or "frac" sand, also known as a proppant sand, is an essential component of the pressure pumping portion of the natural gas and oil drilling completion process. Proppants are defined as sized particles mixed with fracturing fluid to hold fractures open after a hydraulic fracturing treatment. In addition to naturally occurring sand grains, man-made or specially engineered proppants, such as resin-coated sand or high-strength ceramic materials like sintered bauxite, may also be used. Proppant materials are carefully sorted for size and sphericity to provide an efficient conduit for production of fluid from the reservoir to the wellbore.

Frac sand, a combination of washed and graded high silica-content quartz sand, water and chemicals, is pressure pumped into oil and gas wells to fracture the rock formations and create openings while simultaneously filling any cracks in the formation to allow better flow of the hydrocarbons to the wellbore.

For frac sand, the key qualities are conductivity, permeability, roundness of grain and crush resistance. The higher percentage of these qualities present, the more superior fracturing stimulation results. The relationship between conductivity and permeability is as follows: conductivity is defined as the product of the permeability of the proppant pack multiplied by the propped width. Conductivity has a direct effect on deliverability of fluids to the wellbore; however, since conductivity is heavily influenced by propped width (which can be only estimated after the treatment), most engineers use actual proppant permeability to choose between two proppants.

Resin Coated Frac Sand

The value and demand of resin-coated frac sand is its capacity to provide significantly higher production than wells using sand. Resin coated frac sand is designed to be a strong, highly conductive proppant and provide sand control in fracturing operations. The resin coating, applied to API (American Petroleum Industry) grade frac sand, dramatically strengthens each grain; and this resistance to crushing prevents loss of permeability in fractures subjected to medium depth/medium closure stress wells. Essentially, resin coated frac sand "corrects" roundness, increases psi strength as well as conductivity and permeability.

Much of the premium resin coated frac sand selling in the marketplace today has an ISO/ API mesh size of 40/70 and 30/50. In addition to this size, Hunt's deposits capable of being resin-coated for frac sand fall into the 100 mesh size. This size is extremely rare for resin-coating. The value of this quality of sand is that it is able to be utilized in shale oil and gas deposit recovery efforts. This is Hunt's niche market in terms of competitive advantage. Shale oil is a substitute for conventional crude oil – it is more like an oil substance until heated to become lower grade oil. New technology allows recovery from low grade deposits not extractable by more traditional methods. And some technology can generate profits when the crude price of oil is $30 barrel. The future of oil shale has arrived – 1.5 trillion barrels equal the country's potential reserve. Shale recovery utilizes sand in various stages, and within the next five years, industry experts predict 20-40 new shale recovery efforts.....which would utilize all of Hunt's resin coated frac sand. Shale deposits are the fastest growing source of natural gas and are expected to comprise 18 percent of domestic production by 2030. (Houston Chronicle, 7/28/09) The Marcellus Shale play alone – located in Pennsylvania, Ohio, West Virginia and New York – may be large enough to supply all U.S. natural gas demands for 15 years.

Frac Sand Coating Plant

The unqualified leader in what is referred to as "shell sand coating" manufacturing plants is The Simpson Group. For close to a century, the efforts of the company's original founders have crystallized into a company that can claim a lasting impression on the development of the worldwide foundry industry and a leadership position in the development of new technology.

The Simpson Group, or Simpson Technologies, is the result of a 1998 merger of two fierce competitors, Beardsley & Piper and the Simpson Technologies Corporation. They combined resources in an effort to reestablish the rapid pace of technological innovation and change in their industry. The first expression of their new capabilities came in 1999 in the form of the largest version of the highly popular Speedmullor series. The new 150B has a batch capacity of 7,500 lbs. and can reach hourly capacities of 150 tons per hour. Combined with Simpson technology in sand cooling and controls, the new 150B has quickly secured a place as the leader in high capacity batch mulling throughout North America.

Simpson Technologies Corporation is best known throughout the world, for achievements in all phases of foundry molding sand preparation, including mixing, cooling, reclamation, aeration, on-line control and automation, laboratory testing, system engineering, and a wide variety of process automation equipment. For this equipment the company currently has the leading market share in the North American and Japan/Asia markets. Certain machines also enjoy the top share in the highly competitive Continental European market. Customers include virtually all of the major foundry organizations throughout the world.