Fracking 101 for Investors: Profiting From Proppants

Photo credit: Flickr/Damian Gadal 

America's fracking boom has opened up many new opportunities for investors. One opportunity is proppants, which are tiny grains of sand or ceramic materials used to prop open the fractures deep within the earth so that oil and gas can be produced. Companies like Hi-Crush Partners (NYSE: HCLP  ) and U.S. Silica (NYSE: SLCA  ) both produce sand proppants, while CARBO Ceramics (NYSE: CRR  ) is a leader in producing ceramic proppants.

Overall, the energy industry is using more proppants as these are proving to be a key ingredient to extracting greater quantities of oil and gas from tight rocks. That trend is only expected to continue as American energy companies drill more wells. It's a trend that could turn into a very profitable one for investors.

To help investors gain a better understanding on proppants in general, as well as the companies profiting from them, I created the slideshow below. The presentation also details a difference between Hi-Crush Partners and U.S. Silica that explains why Hi-Crush Partners' dividend yield is so large as well as the technological advantage of CARBO Ceramics' proppants. 

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  • Report this Comment On June 11, 2014, at 9:23 AM, Pabsupdike wrote:

    Great article. I've been long in Hi-Crush since late last year and it's had a nice run up, to the tune of about 60%, since I've owned it. There has been some profit taking lately and it's pulled back 10% or more these last few days. Probably a fantastic buying opportunity.

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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9/1/2015 4:06 PM
CRR $25.63 Down -1.79 -6.53%
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SLCA $19.50 Down -0.60 -2.99%
U.S. Silica Holdin… CAPS Rating: ****