Smart Sand (NASDAQ:SND) Chief Financial Officer Lee Beckelman said the company’s business is centered on mining, producing, transporting, and selling Northern White frac sand, with the bulk of volumes tied to oil and gas producers. Speaking in a fireside chat moderated by Lytham Partners Managing Partner Robert Blum, Beckelman described Smart Sand as “as much of a logistics company as a mining company,” emphasizing that the company’s value proposition combines sand quality with efficient, cost-effective delivery to the wellsite.
Business model and market footprint
Beckelman said Smart Sand sells sand to both oil and gas and industrial customers, but noted that “90% of our sand today goes to oil and gas producers.” The sand is used in hydraulic fracturing to complete wells. He said the company’s primary oil and gas markets include the Marcellus and Utica basins in the Northeast U.S., the Bakken in the Western U.S., and Canada’s Montney and Duvernay basins.
Why Northern White sand competes
Beckelman said Northern White is generally viewed by engineers as higher quality than regional, in-basin sand, pointing to properties including crush strength and sphericity. He said Northern White’s crush strength allows it to withstand high pressures and help keep fractures open, while its more circular shape helps hydrocarbons flow more efficiently, supporting “better long-term production and cash flow results over time.”
He added that the industry shift toward regional sand was driven primarily by logistics economics rather than performance. In-basin sand can be trucked to the wellsite without rail and terminal handling, lowering delivered cost. Beckelman said the ability to reduce logistics costs helped some producers cut “10%-20% of the upfront well cost,” even if they expected “longer term less performance” compared with Northern White.
Structural drivers of sand demand
Blum and Beckelman discussed how sand demand can rise even when headline activity measures appear flat. Beckelman cited two structural trends that he said are increasing sand usage per well: longer lateral lengths and higher-intensity completions.
He said the average lateral length has expanded substantially since the mid-2010s. “When I started in this business in 2014, the average lateral was maybe 5,000 ft,” he said. Today, depending on the basin, he said laterals can approach “15,000-17,000 ft,” with leading operators drilling wells that may reach “20,000-25,000 ft.” Longer laterals require more sand, while higher “intensity of the fracking”—more stages and more sand per stage—raises sand use per foot of lateral, he said.
Natural gas exposure and end-market themes
Beckelman said Smart Sand has significant exposure to natural gas-driven activity, estimating that “probably 60%” to “maybe 70%” of volumes go to natural gas basins, depending on the period. He described the Marcellus as the company’s largest basin, representing “close to 40% of our demand in a given month,” and characterized it as primarily a dry gas basin. He also pointed to growth in the Utica and in Canada, where he said Montney and Duvernay activity is tied to natural gas development intended to supply LNG export capacity on Canada’s west coast.
He connected long-term demand expectations to expanding LNG exports and rising power needs, including from AI data center growth, which he said is expected to be met in part by natural gas-fired generation.
Logistics strategy, wellsite solutions, and 2025 results
Beckelman said Smart Sand’s cost position and reliability depend on efficiency at the mine and in rail logistics. At its Oakdale facility, he said the company has “over 1,300 acres” and “250 million tons reserves,” and loads sand directly onto rail cars. The company uses unit trains of “100-150 rail cars” shipped to terminals in operating regions, where cars are unloaded and returned, supporting faster turns and the ability to negotiate rail rates, he said.
He also highlighted the scale of modern completions, noting that some wells use “10,000-15,000 tons per well,” which can equate to a unit train and roughly “400 truckloads” to deliver sand to the wellsite after terminal unloading. He said Smart Sand’s terminal investments help reduce demurrage and delays while delivering sand “cost-effectively, sustainably, and consistently.”
On wellsite offerings, Beckelman said the company’s SmartSystem provides temporary storage and sand feeding into pressure pumping equipment, aimed at enabling “just-in-time” delivery to support 24/7 fracking and faster well completion, while potentially reducing truck requirements and delay risks.
Reviewing performance, Beckelman said Smart Sand sold 5.4 million tons in 2025, calling it a record year and up roughly 3% to 4% from the prior year. He said EBITDA was “around $30 million” and free cash flow was “close to $30 million.” While EBITDA was “kinda steady” but down year over year, he attributed that to “some one-off items.” He said capital spending was about $12 million and that the company returned capital via dividends and share buybacks during the year.
Looking ahead, Beckelman said Smart Sand believes Northern White remains durable in its served markets, which he described as having limited regional sand capacity. He said the company has over 450 million tons of high-quality reserves, with about 70% in fine mesh, and 10 million tons of capacity operating at about 55% utilization—positioning it to grow volumes with limited incremental growth capital. Beckelman also cited ownership of four terminals, low leverage, insider ownership “close to 36%,” and a continued focus on free cash flow and returning capital through a mix of dividends and buybacks. Since 2023, he said the company has returned $21 million to shareholders through those programs.
About Smart Sand (NASDAQ:SND)
Smart Sand, Inc (NASDAQ:SND) is a U.S.-based industrial mineral company specializing in the mining, processing and distribution of high-purity silica sand. The company’s primary business centers on the production of frac sand for the oil and gas industry, as well as specialty sand products for foundry, glass and construction applications. Through an integrated network of mines, processing plants and trans-load facilities, Smart Sand delivers precision-engineered sand solutions designed to meet stringent performance and purity requirements.
Smart Sand’s operations include flagship mining and processing facilities in Wisconsin, which supply Northern White silica sand, and production sites in Texas, strategically located to serve major U.S.
