A general update report released Monday from Barron County administrator Jeff French indicated that the County Board’s Executive Committee would go into closed session Wednesday, Aug. 7, to review the impacts of Emerge Energy Services bankruptcy filing last month.
Emerge is the parent company of Superior Silica Sands, which owns three mines and three processing plants in the county—in New Auburn, on Hwy. 8 near Poskin, and areas in the Town of Arland.
As required by state statute and county ordinance, a frac sand company must have a reclamation plan for mined land.
Built into the reclamation plans is an assurance that if the operator goes defunct, the county has money collected through fees to make sure the land is reclaimed. Fees are bonded to the county in accordance with the size of each operation.
Superior Silica got in at the ground floor of Wisconsin’s frac sand mining boom in the early 2010s, being one of the first to establish operations in northwest Wisconsin.
Emerge Energy, which was formed in 2012 by management and affiliates of Insight Equity Management Co. LLC at the time of the frac sand boom, mines, processes and distributes silica sand proppant at its facilities in Wisconsin and Texas, the declaration said.
But in the last 5 years, frac sand producers have struggled in an up-and-down oil market.
Drillers in southern states are also turning away from the northern white sand found in Wisconsin in favor of more local sand, which is lower strength in the fracking process, but cheaper and more readily available.
The shift in the industry away from a type of sand mined in Wisconsin also impacted the company, which had to incur costs to adjust to the market change, the declaration said.
The company filed July 15 for Chapter 11 protection in Delaware—where it is incorporated—with roughly $339 million in debt and plans for a debt-for-equity swap.
Emerge Energy Services said it will continue to operate as normal without interruption through the course of the bankruptcy proceedings. But activity has been scaled back at some of its Barron County locations.