Guar proves sticky problem for frac players

Growth potential: the best quality guar beans are grown in India

REUTERS/SCANPIX

By Noah Brenner

 14 June 2012 22:59 GMT

A LITTLE bean is causing big headaches for US pressure pumpers as skyrocketing guar prices bite into the business of hydraulic fracturing.

Halliburton told investors that the rising price of guar, an additive used to thicken fracturing fluid and help keep the sand proppant in suspension, will hit its margins by 300 basis points, an estimated $120 million.

The adjustment came on top of Halliburton’s earlier guidance that guar prices would drop its North American margins by 200 to 250 basis points — or a total margin hit of 500 to 550 basis points.

Guar prices have moderated in the last few weeks but what likely took Halliburton by surprise was that it could not…

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