Pioneer Natural Resources Company (NYSE:PXD) has signed an agreement with a subsidiary of Carmeuse Holding S.A. (Luxemburg) to acquire its U.S. industrial sands business, Carmeuse Industrial Sands, for approximately $297 million.
CIS’ sand mine in Brady, Texas, has more than 30 years of proven brown sand reserve life and is the industry’s largest resource base for brown sand in the U.S. The Brady mine currently has sales capacity of approximately one million tons annually.
Scott Sheffield, Chairman and CEO, stated, “When Carmeuse recently announced plans to sell its U.S. sand business, we viewed this as a strategic opportunity to secure high-quality, low-cost and logistically advantaged brown sand supply to support our growing fracture stimulation requirements in three of our four core Texas growth assets – the Spraberry vertical, horizontal Wolfcamp Shale and Barnett Shale Combo plays. By securing supply at below market prices, we expect to reduce annual capital spending by $65 million to $70 million based on our estimated sand requirements and current market prices.”
CIS’ management team has agreed to join Pioneer. The acquisition will be funded from available cash and is expected to close late in the first quarter or early in the second quarter of 2012.
CIS’ other assets include two outlets (Bakersfield, California and Colorado Springs, Colorado) for other grades of sand produced in Brady, two sand mines in Ohio (Glass Rock and Millwood) which produce oilfield and industrial sands, one sand mine in California (Orange County) which produces construction and recreational sand, and an oilfield cement material processing plant in Riverside, California.
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