The price increase may force users to choose sand. They can have production problems in Europe. With oil down, activity slackens for sure. Their patents are running out so foreign imports are an issue. I think under $100 is a better bet in this environment.
Could you explain why foreign imports would be a particular threat when CRR has plants in China and Russia? In the absence of patent protection, competitors would still have to be able to compete as manufacturers. I reviewed their patent portfolio over a year ago, and I still believe that low cost raw materials and good management will be more important in the long run.
CRR plants in Russia and China are for serving the local Oil and Gas explorations !
One has to remember that an average well needs a 2.5 Millions pounds of proppants.
Shipping this material from abroad is very expensive and cumbersome!
Not only that, but still CRR has an edge over its competitors still due to some patents but also due to their over 20 years of experience with this stuff.
CRR CEO said that the Chinese proppants are not good enough and create damage for the equipment.
Also CRR has a distribution network that ships the proppants straight to the well which the competitors do not have (It is like Coca Cola model).
Conclusion:: CRR has a bright future.
CRR may have some patent expiring but they keep on moving forward with new patents!
These patents are fresh and probably the company already using them. They certainly have an edge!
BShaef, they do have some very interesting patents, for anyone who likes to read patents.
Hi jcebruin. I went through the two links and found no evidence for your claim that other companies are making similar or comparable proppants.
If you have artifacts or proof please bring them, we all would like to know better. If you have none, then just say it is your own speculation and that is OK too..
Meanwhile read the following recent article from a pro who believes in CRR:
Have a nice weekend!
Hi jcebruin, I don't know what is your agenda or what are you trying to prove with your posts. Here is a post from the first link you posted:
"As for the ceramics mix, Abraxas Petroleum Corp (AXAS.O) CEO Robert Watson said he aimed to use an average of 40 percent ceramics on Bakken wells. But on a recent well, Abraxas was forced to inject 60 percent ceramics because flooding had prevented a shipment of sand from arriving in the region."
If you have evidence that someone makes proppants as good as CRR please supply them. If such artifacts exist I will be the first to give up on this investment.
Meanwhile very serious people are excited about the company and its product. Their strength is that they are one shop for all proppants needs for fracking. Please read the below carefully this time...
Seems like they are the leading company in this area by far!
Actually Katy isn't around the corner, but rather right down I10 from Dairy Ashford. Most of us in the neighborhood have some level of business in the E&P field.
Just mentioned the 10k because most of you are quick to say untrue, or state where you get your lies, blah blah blah. At the end of the day, those who think that any of CRR strength comes from IP, are gravely mistaken. Competitors are building facilities in Georgia to make the same type of product as Econoprop. Existing producers already make similar products. CRR has a great market advantage and name recognition, but that isn't going to help with the amount of high strength ceramics that currently sit in warehouses from Houston to North Dakota.
I started posting when I thought it was a good time to buy. It's been a while, in fact my yahooid had to be reactivated.
Want a good little blurb on what people are really doing, check this out...
Or an overview of the Bakken, with most of the companies highlighted using mostly sand(which I don't necessarily think is the right completion strategy)
Plenty of info out there on what's going on if you get of the corporate website.
This is a good stable buy, especially if it dips into the 90s which it's likely to do until they report on q3 numbers. IMHO
UHUH24 tanks for your post. Once again, can you point us to the source or artifact that points to near future patents expiration?
What production problems are you talking about?
The market in US is enough to sustain CRR projected growth and then some.
Oil going down is a factor as the stock is a part of the oil service ETFs and those tend to trend together with OIL.
Waiting for OIL to bottom is a good idea...
According to the facts I see, this stock more than double and may as well quadruple in five years.
Carbo is building a new plant (from their quarterly) that will produce raisin coated sand and ceramic proppants.
The ratio can be adjusted to market demand. It suppose to start being operational Q1 2012. I believe they anticipate to sell all they can produce. That is 50% anticipated increase in reveiew!
Sand is effective in many instances, in fact, regardless of your intentions, it doesn't make sense to pump a ceramic in most wells. Simple fact is that the ceramic market is substantially smaller than the rest of the proppant market. With almost no IP left on the patent side for Carbo, the flood of Chinese, Russian and US ceramic manufacturers and the price of oil and gas currently, it's going to remain bumpy for this stock for the foreseeable future.
I'm sure if you ask most E&P completions guys, they'd rather pump anything but ceramics on most of their wells, oh wait, they already do. This stock is inherently tied more directly to the commodity price due to the fact that it's only the high capacity wells that might benefit from the use of a ceramic.
What you see is service companies investing in sand mines and companies that have sand or resin coated sand because that's what they are being requested. You are not seeing any service company courting ceramics companies, and many have warehouses full of ceramics they can't currently pump.
Checked the daily drilling wire a few minutes ago and noticed that all rigs are still running, somewhere between 1,500 and 3,000 wells are waiting on frac jobs, and CRR is still the number one ceramic proppant seller in the world. I think earnings may soar and this is a good $200 stock. FUD is driving the price down, not a reduction in activity.