Great. Welcome back to Sidoti's December Virtual Investor Conference. Before I introduce our next presenter, let me just remind everyone we may have time for Q&A at the end. If we do, press that Q&A button at the bottom of your screen and type in the questions, and we'll get to any time permitting. With that being said, I don't want to take up a lot of time. We're so happy to welcome Smart Sand, the ticker is SND, and we're joined by Lee Beckelman, Chief Financial Officer. With that, Lee, let me turn it over to you.
Thanks, Steve. Thanks for the introduction. I'm going to turn my video off while I present and then open it back up. But I want to thank everybody for joining us today. I'm Lee Beckelman, CFO of Smart Sand. I've been with the company since 2014, and I'm going to go through our investor deck and talk about kind of current activity and what we're seeing in the market, and hopefully have time to open up for questions at the end. This is our normal disclaimer. Getting into kind of the company highlights, we believe the drivers for Smart Sand. We are a pure play Northern White Sand company. We have in total in three facilities, 10 million tons of capacity. This year, we'll sell just around 5 million tons or more into the market.
And we are focused on providing Northern White Sand to the oil and gas basins that are primarily served by that sand base. We believe we have the right operating model. We have high-quality Northern White Sand mining facilities all located on Class I railroads, and we have a very low-cost operating structure. All of our mines and activities all happen on the same area. So we mine the sand, we process the sand, and we load the sand onto our railcars all in one location. So that really reduces the friction cost in terms of our processing capabilities. And then we built our model on having very, you know, basically being a large commodity business.
We transport all of our sand by rail to our operating bases and unit train shipments of 100 to 150 cars going to either our own terminals or third-party terminals. We really focus on efficiency of movement so we can have low-cost, sustainable, efficient logistics operations to support our business. So we also have a very large reserve base. We have over 500 million tons reserves at 303 locations, and we have the right type of sand in that our sand is 70% plus fine mesh. That's 40, 70, and 100 mesh. Today in the market for frac sand, over 90% of the demand is for fine mesh sand. So our reserve base lines up well in terms of the market demand, and we don't see that changing.
So the right operating model, the right sand, and ultimately, we believe we have the right capital structure and management team in focus to create long-term shareholder value for our shareholders going forward. We've always managed our, we're in a commodity business. We have a lot of cyclicality in our business, and we've always maintained low leverage levels. That's allowed us to basically survive the downturns when a lot of our competition, frankly, went bankrupt and/or had to be restructured. We also have high insider ownership. Today, insiders own collectively just north of 30%. Our CEO, Chuck Young, and founder owns 18%. And between management and founders and other employees, we collectively own another 12%-14%. So we're aligned in terms of our goals and objectives with our shareholder base. And we're focused on wanting to grow the business and having incremental capacity to grow the business.
We can substantially grow our business without having to vest a lot of incremental capital in terms of the capacity we have available today to serve the market. We're also focused on returning value to our shareholders over time. Last year, we bought back 11% of our shares, and this year we did a $0.10 dividend out to our shareholders in October. So the combination of good quality assets serving strong and growing markets for frac sand, coupled with low leverage and a focus on growing the business for our returning value to shareholders, we believe we're well aligned with and can deliver good value for our shareholders over time. In terms of the companies, a quick overview of our business model. Again, we are a fully integrated provider of sand from the mine to the well site.
Again, all of our facilities today at Oakdale, for example, we have 1,300 acres, 300 million tons of reserves, 5.5 million tons of processing capacity that has over seven miles of rail track that's available to load the logistics to ship our sand out to the market, so again, we mine our sand, we process it at the same location, load it into the rail cars at Oakdale. Those trains then get shipped directly to either our own terminals or our third-party terminal network. Today, we own terminals in the Marcellus, in the Utica Basin, and in the Bakken. We're looking to add terminals into Canada, but then we have a network of terminals through third-party providers throughout all the basins, and then at the terminal, the sand is transloaded into trucks and delivered to the well site.
We have a complementary business at the well site where we can rent equipment to our customers in terms of a portable transloader and silos to temporarily unload the sand at the well site and deliver that sand and the pressure pumping equipment. This is a summary of our financials. You can see that, you know, we do have some volatility in our business. This year, our volumes have gone down a little bit. We had a very strong first quarter, dropped down a little bit to the third quarter, but we expect volumes to pick back up in the fourth quarter. You can see as well as terms of our overall operating performance and contribution margin per ton and quarterly EBITDA. There's a couple of drivers in the market that we think are good fundamental long-term drivers for frac sand.
Even though the rig count's actually down year over year, as well as the frac spreads to basically complete the wells, they're flat to down in 2024. And most estimates are that activity in the rig count and frac spreads will be flat to maybe up to 5% in 2025. But one thing that even though there's less rigs operating and less frac spreads operating, they are drilling and completing the same amount of more wells. And for every well they're drilling and completing, they're using more sand per well. And there's two drivers for that. First, they're increasing the laterals of every horizontal well. Those laterals are increasing. And so just by increasing the lateral, that requires more well, more sand per well to be used. And then secondly, they're increasing the intensity of the fracs in that they're using more proppant or sand per foot of lateral.
The combination of using more sand in every foot of the lateral and longer laterals, we believe, is leading to increasing frac sand demand, even though the actual number of rigs and frac spreads may be moderating and flattening out. As you can see, this just shows you an example that while frac spreads have been flattening out over the past year or two, you can see the amount of frac sand per frac spread per quarter has continued to increase. In 2016, one frac spread was using roughly 100 million lbs per quarter, and it's now expected for that to grow to be approaching 250 million lbs per quarter per frac spread. We collectively believe today that Smart Sand is the second largest in terms of capacity in the market for Northern White.
Collectively today, in our three facilities, we have 10 million tons of capacity. We think the only other provider out there that has more capacity than us is Covia, who recently joined up with Black Mountain Sand to create Iron Oak, and so we think we're the second largest provider of Northern White sand in the market today. I'm not going to spend a lot of time on the next two slides. You can call me or reach out to me or study this, but this just basically points out that Northern White sand is a higher quality sand than regional sand.
A lot, you know, particularly in the Texas, Oklahoma, and Louisiana markets, those markets have moved away from Northern White really beginning in 2018 and started using a regional sand, not because of the quality of the sand, but more because they were able to reduce the logistics cost. That sand does not have to be railed and run through a transload. It can be delivered directly from the mine by truck to the well sites. They're able to reduce that logistics cost and reduce their upfront costs in the business in terms of the delivery of their sand. That cost relative to the performance of the wells, they felt, was justified.
but if you go back, and there's been studies done by Rystad, it went back and looked in both the Midland and the Delaware Basin, and basically looked at wells that had been drilled by Northern White and then wells that had been drilled by, you know, in similar locations had been completed, I'm sorry, with regional sand. You know, in nearly all situations, the Northern White wells performed better than the regional sand wells. and over a 12-36-month period, actually, because of the increased production from the wells, from having the better proppant, you know, basically keeping the productivity of the well lasting longer, you could generate more cash flow over time. We haven't really seen a movement back to Northern White in those Texas and Oklahoma markets, but we continue to believe that this can add value.
As those producers start moving to their Tier 2 and Tier 3 acreage, where, you know, frankly, the performance of those wells, you know, could be more challenged, we think Northern White could come back into play as well as they look for refracking opportunities. The reality is, though, we do not need the Texas, Oklahoma, or Louisiana markets to be successful. Today, this year, we'll sell over five million tons of sand in the U.S. market. That's up from three million tons of sand we sold three or four years ago. We're doing that by expanding our sales volumes into the markets that are primarily Northern White. Those markets today are the Marcellus in the Northeast United States of Pennsylvania, West Virginia, and Ohio.
That's a natural gas basin, which we believe has a lot of good potential growth opportunity for the increasing demand for natural gas. That is our largest market we serve today. We have a terminal at Waynesburg, Pennsylvania, serving that market. We also serve the Utica Basin, which is primarily an oil and liquid play. That's a growing opportunity that we have two terminals there that we serve and support today. Our second biggest market is the Bakken in North Dakota. We serve directly out of our Oakdale facility, have a terminal there as well in Van Hook, North Dakota. And that represents, depending on the month, 30%-40% of our overall demand. We also now serve into Canada through our Blair facility. That's a natural gas market that's growing as good potential growth, feeding natural gas into LNG facilities on the west coast of Canada.
And then we also, out of our Utica facility, can feed into the DJ and Powder River basins of Colorado and Wyoming, which also uses Northern White. So those are the primary markets as we serve today. We see a lot of growth potentials in those markets. We have invested in terminals and made sure we are on all Class I railroads to be able to serve all those markets. And we think we have good growth from those markets. So we want to be able to continue to sell sand and increase sand into the Permian and Texas markets. And that would be, you know, extra value to us. And we do have capacity to serve that, but we do not need that capacity to, we do not need those sales in that market to be successful. Already touched a lot on this already. Again, we have three facilities today.
Our Oakdale facility is 5.5 million tons. Our Blair facility is 3 million tons of capacity. Our Ottawa Utica facility is 1.6 million tons of capacity. Those are our three mines. All of our mines are served by Class I railroads. At Oakdale, our Oakdale facility is served by the Canadian Pacific and the Union Pacific. Our Utica facility has access directly to the Burlington Northern, and our Blair facility is on the Canadian National. Why is that important? Because not all railroads serve all Northern White basins equally. So having facilities that can connect to different railroads to get us into different markets, you know, is very valuable for us. For example, the Blair facility that we invested in 2022, until we had that facility, we were not able to effectively compete in Canada. It's on the Canadian National.
Canadian National is a railroad that really feeds into the Montney and Duvernay shales that are being drilled for the natural gas. With that facility, we are now being able to sell on that market. This year, you know, Canada is going to represent probably close to 10% of our sales. Oakdale has direct, you know, direct on the CP directly goes into the Bakken. The Utica goes directly on the BN into the Powder River Basin and the DJ. Then collectively, all three of our facilities can connect to the NS and take our sand into the Eastern United States to either the Utica Basin or the Marcellus Basin. Touched on this earlier, but again, we have a very efficient process, have very low royalty rates. We mine on location.
That mining gets, you know, either pumped through a hydro mining process to the wet plant or delivered on a short haul with a loading truck. It's processed in a wet plant. That wet plant then feeds directly into a decanting tunnel to basically allow that sand to decant and evaporate some of the wet before it goes into the dryer. It's then dried, you know, on site, and from the dryer, it gets delivered directly into our silos, which feeds into our, you know, the rail cars that we're delivering to market. At our Oakdale facility, we have royalty rates of less than $0.50. Our Blair also has very low royalty rates, and we have no royalties at our Ottawa facility.
So relative to a lot of competition, again, we have very efficient operations, very low-cost operations, very large-scale rail capabilities at each of our mine sites, and we pay very low royalty rates. This is just an overhead look of our Oakdale facility. Didn't really fully appreciate the size and scale of the facility. Again, we're at 1,300 acres at Oakdale. This footprint here is probably about 100 acres that's currently in the processing. We have three dry plants on what we call the east side of the facility. We have two dry plants on the west side. We have a wet plant on the east side and one on the west side. And then we have, you know, I believe today, actually 11 miles of rail track. All those little gray dots you see in the picture are rail cars.
We have over 300 million tons of reserves and 1,000 acres available to us yet to still develop and operate at this facility. Our Utica facility is one we acquired in 2020. This is an idle mine that Eagle Materials, they are an aggregate business that had looked to invest in the frac sand business. They bought, they had Utica as well as a facility in New Auburn. They were looking to invest that during, you know, the downturn in COVID. We were able to come in and buy these assets for $2.5 million in stock. We have kept New Auburn idle because it's activity, and we can serve whatever markets they were serving at in New Auburn before it went idle out of our Blair and Oakdale facilities. But we have brought the Utica facility up and running. It's a 1.6 million ton facility.
We have the combination of being able to serve the frac markets in the Western United States. This is a facility we're really moving and have a strategy to, over time, you know, have it be a majority industrial sand facility. It's about an hour and a half out west of Chicago. It can serve a lot of the industrial sand markets in the greater Chicago metropolitan area. Our goal is, over the next two to five years, to have Utica be primarily an industrial sand facility, basically to allow us to be able to balance out, you know, some of our sales revenues and cash flow into a more consistent kind of stable business to balance out the up and downs and the volatility we have in the frac business. Our Blair facility is a facility we bought in 2022.
This was idle as well. We bought this from Hi-Crush. Very well-built facility. It's 3 million tons of overall capacity, over 100 million tons of reserves. Its configuration is very similar to how we operate Oakdale. Very large logistics assets online. The value of Blair to us is that it was connected to the Canadian National versus Oakdale is on the CP and the UP. And this allowed us to really have the opportunity to open up the Canadian market for us. And so this year, we have begun selling sand into Canada. But this facility also can help supplement sales into the Eastern United States and Marcellus so we can serve the Marcellus and the Utica markets out at either Oakdale or the Blair facilities. Talked a lot about logistics. We build our model basically on being a unit train model.
That's where you basically look to ship large bulk commodities. And, you know, large shipments will load 100 to 100 today. Probably 90% of our volumes move on a unit train basis where you have 100-150 rail cars that get loaded in Oakdale or Blair or Utica. They leave that origination spot. They go directly to the terminal. There's no stops in between. And they go directly to the terminal. They get unloaded. Our sand gets unloaded in the terminal, and then that train can come right back to the origination point at either the Blair plant. So it's a very efficient movement. And when you have that kind of consistent efficient movement, you can negotiate lower rates with the railroads. But it also allows us to get a better return on our rail cars.
We're able to turn those rail cars two or three times a month versus on a manifest basis where you may be on a ship 15-30 cars. It has to go to another location. May have to go to a switching yard in Chicago to build and rebuild a unit train that then goes to, you know, to the Marcellus or the Van Hook or to the North Dakota, et cetera, and then gets unloaded and has to go two or three stops to get back. That may take a rail car. May, you know, we may be able to turn that rail car once every 30-45 days versus under unit train shipment, we can turn that rail car, you know, two to maybe three times a month. So again, much more efficient operations, lower rail rates, better return on our rail car investment.
We lease all our rail cars to support our business. And so it allows us to be able to go out and deliver sand on a very sustainable, cost-effective basis to our customers. We have four terminals today that we operate. Van Hook terminal was our first investment in terminal. This was in the Bakken of North Dakota. We bought this facility for $15 million in 2018. It was an idle oil facility run by Plains All American. We bought that from them and converted it into a sand terminal. And that really allowed us to really grow our market share in the Bakken. And that's been a very successful investment for us. Waynesburg, we did a similar strategy investing in a terminal in Waynesburg. This was a rail facility, you know, associated with a shutdown coal mining operation.
We basically have leased the rail operations there in the track, and we are, you know, operating our own terminal there. We commenced operations in January 2022, and this has really allowed us to really expand our market share in the Marcellus Basin. And then finally, at the end of last year and early this year, we invested in two terminals. These were both idle terminals in Minerva, Ohio, and Dennison, Ohio. We can serve these terminals from any of our plants. And the key to this investment was they were idle. We were able to get them, you know, very cheaply. We invested $1.5 million to acquire these terminals. And they now open up the Utica Shale Basin for us. We can also serve the eastern part of the Marcellus, but we can go directly into the Utica. The Utica is a growing basin.
There's a lot of interest and focus on drilling, actually, for oil and liquids there, and we see a lot of potential for growth there, and these two facilities are well-positioned to take advantage of that. Not going to talk a lot about our wellsite storage solutions business, but we do have a storage solution business that we provide a portable transloader, silos, and what we call our Smart Belt, which is a conveyor feeding system that allows, will unload as trucks come to the wellsite. We can unload the sand through our transloader into our silos or directly into the hopper or the pressure pumping equipment to help producers and pressure pumping companies manage their sand at the wellsite as it gets delivered and into the production, into the pressure pumping equipment.
This is a business we roughly have three or four silo-only fleets that we're operating and running in Oklahoma, actually. We have, we've been doing some changes to the configuration of what we call our Smart Path. We're adding a bucket elevator system along with the silos, our transloader, and our Smart Belt to put a very efficient package together that we hope to start running out to our customers early in 2025. And then we do have an industrial products business today. It represents less than 5% of our sales. We basically got into this business as an opportunity. We saw the opportunity to diversify with our acquisition of our Utica facility. Excuse me. And this is something that we've, we have a team that we brought in, and they are trying to build this business. This business takes a while to grow.
Typically, the contracts can be multi-year contracts. You got to go in, and every customer has very specific specs, and you have to basically test your sand and demonstrate that you can deliver the quality and the spec of their sand. This is primarily a glass and foundry market with some specialty products as well. And we are trying to build our presence in the glass and foundry market. And we think we have some opportunities to grow this business in 2025 and beyond. As we said on our third quarter conference call, we see some good opportunities, and potentially this business could get up to 10% of our sales volumes in 2025 and hopefully grow from there.
So in summary, basically we have what we believe is a very sustainable operating model, very large, high-quality reserve base, low-cost operation, unit train capable connections to four Class I rail lines across. We can serve all the Northern White basins, we believe, with a low-cost provider of sand into those basins. Have a very low prudent capital structure. We maintain low leverage levels. Look to kind of manage our business to make sure that we don't get over our skis in terms of, you know, growing too rapidly and/or, you know, again, over-leveraging in what is a cyclical business. And then we have a management team that's very committed to the business. Again, we own collectively 30%, 33% of the business. We're focused and aligned with the shareholders.
We're focused on getting value back to our shareholders over time while still looking to grow the business with what we believe is the high-quality asset base that we have today. And that'll be the end of my prepared comments.
And thanks so much, Lee. Appreciate the informative 25 minutes. We do have about five minutes remaining. We have some questions in the queue. I'd like to remind everyone, if you do want to add a question, press that Q&A button at the bottom of your screen, and we'll get to as many as we can with time remaining. We do have a question about industry consolidation, and I want to break that into two parts. One, we've certainly seen consolidation in your space. Specifically, you noted adding that the Hi-Crush mine, you have the significant amount of the capacity available.
If the market recovers, and we can talk about that in a little bit, does more supply come back from other players, or does it not come back, putting you in a far better position when we think some of these gassier players start coming back from on the demand side?
Our view today is that we think the Northern White market's relatively in balance. You know, it could be a little oversupplied. We've been able to increase demand, but haven't really seen the opportunity to push pricing yet. But from our view, there's a, the most of the idle capacity of Northern White, we see very limited potential for that coming back online for a variety of reasons. First of all, a lot of the idle capacity, their reserves are very heavily coarse in nature. So they're primarily 20, 40, 30, 50. They may be 70%-80% coarse sand.
And without getting too back into the history, when the Northern White market really took off in 2010 to 2014, the demand for sand was 70% coarse. Today, the demand for sand is 90% fine. And so those mines will be very inefficient if they come online. They'll have a lot of waste. And at least at current pricing, you can't really get the economics having 70% of your sand going to waste and only being able to sell 20%. So that's one driver. The second is a lot of those are private equity invested plants that came in. They weren't really built to scale. They might actually mine at one location, have to truck to another to process, have to truck to another to rail, and that may not even be a unit train facility.
So they have a lot more operating costs, and they have lower reserve basis. So even if they want to bring online, they'd be burning through those reserves faster, and they have high operating costs. And the third, I think even more meaningful challenge is we just don't see a lot of new capital coming into the business. So we don't see equity investors necessarily focused on it and/or debt providers willing to provide leverage to bring on these new, bring these facilities back online, which would require a significant amount of capital. So most of the idle facilities, we don't believe is really going to come on in a meaningful way. Now, Covia and U.S. Silica do have some idle capacity that they may look, but I think they're focused, like we are, on maximizing the value of their existing assets and really getting greater value from that.
I think pricing would have to improve materially before we believe any real incremental supply would come onto the market.
Okay. What about the flip side being significant operator consolidation? How is that affecting demand?
In terms of the E&Ps consolidating? Yeah. In some respects, I mean, it means obviously we're going to have fewer customers. So we do have some concentration risk. But the positive of that, those, I think those customers, you know, now have longer runways in terms of their inventory and knowing where they want to drill and knowing that plan they want to drill. I think some like Smart Sand that they know that can consistently supply that sand very efficiently and also has the room to grow with them through our capacity. We think that's a good thing we can match up with them.
And so even though, you know, they have consolidated and there may be fewer E&Ps that we're selling to today than we were selling to five years ago, those EMPs, I think, are using more sand collectively than the ones in the past. And I think they can, you know, I think we have a good business proposition to sell them in terms of our capacity, our low-cost operation, and our logistics footprint to really grow and support as they go out and develop their inventory that they have today of well locations.
You talked about the large insider ownership. Is there any frustration with the stock price? Clearly, you've massively outperformed the OSX this year, but you've also shown you can generate cash flow in a challenged market. You have the clean balance sheet, and yet you're trading about three times EBITDA. Do you think the market's missing something?
We believe our stock's undervalued. I'll just go out and say it. We wouldn't be a good management team, but we didn't believe that, and truly, we do believe that, and so I think that's why we're doing some of the things we're doing. Obviously, I think the market underappreciates, in my view, the market underappreciates the market potential for Northern White. When the Regional sand came on in 2018, yes, there was a big correction in Northern White. A lot of Northern White capacity had to be rationalized out of the market, but that has happened, and Northern White still supplies 30+% of the, you know, frac sand demand in the U.S. and Canada, and we don't think that's going to change, and we think those markets are going to grow at the same or better rates than the Texas-Oklahoma market.
So, I don't think the market fully [appreciated]. I think there was a view in the market that Northern White was a dinosaur and was going away. And we don't believe that, obviously. And we think there's good growth potential. And we're well positioned to take advantage of that potential because we have capacity that we can access and sell in the market without having to have a lot of incremental capital to support that growth. So that's the first thing. And then I think as insiders, we see that if the market didn't fully appreciate that, then we are going to be looking to return value either in the combination of dividends or stock buybacks. We haven't committed to anything specifically because we do have a lot of volatility quarter to quarter in our, you know, in our business model in terms of our cash flow generation.
But when we're generating excess cash flow, and we will evaluate the opportunities, and we'll go based on what we think the best thing to do for our shareholders is a dividend, or if we believe our stock's highly undervalued, buying back shares, and/or if we have good incremental investment opportunities, we're not going to shy away from doing that if we think that creates long-term value. So I think we will more consistently return value to our shareholders. Again, we have done that. I don't think it's been fully appreciated. We bought back 11% of our shares last year. We did a $0.10 dividend, which is a, you know, on a $2 stock was a pretty, you know, pretty substantial dividend. And we've grown our business. We're going to grow our sales volumes this year by 10%.
That's just a surprising part because the rig count is, you know, down at the beginning of the year. It was thought it was going to be flat. We were down this year, and you're able to grow your volume. And so I think those are all positives.
You know, I mean, we are facing. Our pricing has been down year over year. So we are still facing pressure in pricing, but we think that's moderated. So the extent that we can continue to grow volumes and start getting pricing with it and be able to grow without having to spend a lot of incremental capital, we have the ability to leverage that free cash flow significantly over the next three to five years.
How are you thinking about 2025 or in December of 2024? You know, we were talking about it before we launched the presentation.
A lot of people are talking about data center demand. We know there's LNG export capacity. How do you think this sets up given the markets you're currently serving 2025, 2026, 2027?
I think we have from a lot, we haven't given any guidance for 2024.
Right. No, no, no. But I think,
I mean, grew our volumes 10% this year. I think at current gas prices and oil prices, there's no reason to believe we can't grow another 5%-10% minimum next year in terms of our activity. We do, though, long-term, are very bullish, in particular on natural gas and natural gas demand in the U.S. and that and our potential ability to help support that. So in simple numbers, you and I talked about earlier, Steve, today the U.S. produces roughly 100 BCF a day, and all this is out in public data.
You can go find out of that 100 BCF today, roughly 12.5 BCF a day is used for LNG. So roughly 12.5% of today's supply is used for LNG. Well, right now, under announced projects, they're already under construction. They don't need any permitting or anything else. Contracts to support them. So these projects are getting built between now and 2030. That LNG demand for U.S. production is going to double to roughly 25 BCF a day. So right there, that's base load demand that has to be met because those LNG facilities want to operate every day. Yes. And then you add on top of that the potential AI demand opportunity. The data centers are coming. They're being built.
Yeah, yeah.
Right now, from a piece I saw from Constellation Energy, 133 natural gas-fired electric plants are in process of being built in the U.S. today.
And they expect that the AI-powered demand could lead to another 6-10 BCF a day of incremental demand from natural gas production between now and 2030. So you add that up, you're looking at an incremental 20-30 BCF a day. So U.S. production has to grow from 100 BCF a day to 120-130 while still being, you know, have enough to fill in storage for winter use. So in our view, I think that's bullish for natural gas prices. And if the, if natural gas prices improve, that will lead to the U.S. producers wanting to invest more capital to support that growth. Well, now, whether it doesn't happen at that rate, I don't know.
But those are pretty reasonable. You're throwing out very reasonable numbers. These are not. Yeah.
So I think all the drivers are there to see some really substantial growth. And two markets we serve in particular, the Marcellus and the Canadian markets are natural gas markets. That doesn't mean we don't still benefit from oil. So it's, I mean, I'm relatively agnostic. I just want to sell sand. That's fair. Oil or gas oil. It doesn't matter to me as long as I sell it at a good price. But the route is we, while natural gas, we see we're probably more bullish on it just because of these, the demand drivers. Yeah. We're still heavily exposed. We have good exposure to oil in the Bakken. Yes. We have good exposure to oil. Increasing in the Utica. And there's a lot of talk of increasing activity. You can go to EOG and Encino and others that are drilling there.
So we have good exposure to oil.
There's a lot more excitement around the Utica now.
And yeah. So I think we're well positioned to serve all those markets. I think 2025 could be a little choppy, but 2026 through 2029, you know, absent some major world events that change the demand profile and/or political events, we see, we think the prospects are very good for the next three to five years.
Might be a great way to wrap it up. Before we do close out the day for the Sidoti Virtual Investor Conference, any closing thoughts for everyone, Lee?
Well, again, very aligned with our shareholders. We're looking to return value while still grow the business. We have a high-quality asset base that has the room to grow without having to make a lot of incremental investment.
So we think, you know, we have great potential to grow the business while still giving good value out to our shareholder in terms of distributions, etc. Excellent. I think we got the most of the questions, but if you have any follow-ups, you can certainly reach out to me at Sidoti or directly to Lee at Smart Sand. I'm sure I'm happy to address any follow-up questions. Thank you everybody for your time today. I appreciate it.
Thanks so much, Lee. Hope everyone is back for tomorrow's day two of Sidoti's Virtual Investor Conference, and I hope everyone has a great night. Thanks, Lee. Thank you very much.