Carbo to mothball Georgia proppant plant

HOUSTON — Carbo Ceramics said Tuesday it would mothball a ceramic proppant manufacturing plant in McIntyre, Georgia.

The Houston-based company said that the closure was due to lower crude prices that have forced a cutback in drilling and crippled demand for proppants. Crude oil prices have fallen by about 50 percent since last year and the number of rigs drilling new wells has fallen by about 43 percent.

Carbo did not say how many jobs would be affected by the plant closure. The company did not immediately return requests for comment.

Proppants are small particles that are pumped into a well during hydraulic fracturing. The particles, often sand or ceramic beads, hold open fissures in the shale and allow oil and gas to flow through the rock to the well.

Proppant companies have struggled through the price downturn as oil and gas producers have slowed the pace of drilling and completing wells. The industry has faced a rapid switch from boom to potential bust as demand for proppant spiked in the past years and is now expected to flatten or even decline.

The wider proppant industry had also slated several new proppant facilitates to start producing from late 2014 and into 2015. Those facilities have increased the amount of proppant on the market while demand has slackened — putting further strains on prices.

Ceramics producers have also faced tough competition from competitors who offer often cheaper sand proppants.

“Unfortunately, we have not seen improvement in demand for ceramic proppant, nor do we anticipate any change in the near term,” said Gary Kolstad, CEO of Carbo Ceramics in a written statement.