Pioneer Natural Resources Company and U.S. Silica Announce West Texas Sand Supply Agreement
September 11 2018 - 4:30PM
Business Wire
Pioneer Natural Resources Company (NYSE: PXD) (“Pioneer”)
and U.S. Silica Holdings, Inc. (NYSE: SLCA) (“U.S. Silica”)
today announced that the companies have entered into a long-term
sand supply agreement by which Pioneer will purchase an interest in
U.S. Silica’s sand reserves at its Lamesa, Texas, mine in West
Texas. This agreement secures a long-term supply of sand from the
mine, with U.S. Silica processing and supplying sand to Pioneer for
15 years.
Timothy L. Dove, Pioneer President and CEO, stated, “We are
pleased to announce our agreement with U.S. Silica that provides
Pioneer with low-cost West Texas sand for the foreseeable future.
Strategically located in close proximity to our Midland Basin
acreage, delivered sand from the Lamesa mine will cost
approximately half that of our current delivered sand, reducing
well costs into 2019 and beyond. The long-term nature of this
agreement will benefit both companies. U.S. Silica has been a
trusted partner for many years, and this contract solidifies their
position as one of our key suppliers of proppant.”
Bryan Shinn, U.S. Silica President and CEO, stated, “We are
pleased and excited to have the opportunity to expand and deepen
our relationship with Pioneer, one of our largest and most
dependable customers. This unique, very long-term contract at our
new Lamesa site delivers significant value for both companies in
the Permian and is clearly aligned with our stated goal of
generating sustainable and predictable free cash flow yield from
our oil and gas sand mining assets.”
The sand reserves and sand supply will be from U.S. Silica’s
previously announced mine that is located about 60 miles north of
Midland, near Lamesa, Texas. The mine is expected to produce
approximately six million tons annually of predominately fine grade
100 mesh and 40/70 mesh sand, with initial production expected in
the fourth quarter of 2018. Pioneer expects to receive its initial
sand volumes during the first quarter of 2019, with its supply
increasing from approximately 1.4 million tons in 2019 to 2 million
tons per year in 2020 and future years.
Pioneer is a large independent oil and gas exploration and
production company, headquartered in Dallas, Texas, with operations
in the United States. For more information concerning Pioneer,
visit www.pxd.com.
U.S. Silica is a leading producer of commercial silica used in
the oil and gas industry, and in a wide range of industrial
applications, headquartered in Katy, Texas, and with
offices located in Chicago, Illinois, and Frederick,
Maryland. For more information concerning U.S. Silica, visit
www.ussilica.com.
Except for historical information contained herein, the
statements in this news release are forward-looking statements that
are made pursuant to the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements and the business prospects of Pioneer are subject to a
number of risks and uncertainties that may cause Pioneer's actual
results in future periods to differ materially from the
forward-looking statements, including the risks described in the
Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and other filings with the Securities and Exchange Commission.
In addition, the Company may be subject to currently unforeseen
risks that may have a materially adverse impact on it. Accordingly,
no assurances can be given that the actual events and results will
not be materially different than the anticipated results described
in the forward-looking statements. Pioneer undertakes no duty to
publicly update these statements except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20180911005827/en/
Pioneer Natural ResourcesInvestorsNeal Shah,
972-969-3900orTom Fitter, 972-969-1821orMichael McNamara,
972-969-3592orMedia and Public AffairsTadd Owens,
972-969-5760orRobert Bobo, 972-969-4020orU.S. Silica
HoldingsMichael Lawson, 301-682-0304Vice President of Investor
Relations and Corporate CommunicationsorNick Shaver,
281-394-9630Investor Relations Manager
Pioneer Natural Resources (NYSE:PXD)
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