Pioneer Natural Resources Company has signed an agreement with a subsidiary of Carmeuse Holding S.A. to acquire its U.S. industrial sands business, Carmeuse Industrial Sands ('CIS'), for approximately $297 million, before normal closing adjustments.

CIS is the number one producer of Hickory frac sand (Brady Brown®) used as proppant for fracture stimulating oil and gas wells in the U.S. Hickory sand is considered to be the highest quality brown sand for fracture stimulation. 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. The acquisition complements Pioneer's vertical integration strategy, which is reducing execution risk and controlling costs. 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.'

Tags: Pioneer Natural Resources Company