DALLAS--(BUSINESS WIRE)--Sep. 11, 2018--
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180911005827/en/
Source: Pioneer Natural Resources Company and U.S. Silica Holdings, Inc.
Pioneer Natural Resources
Tom Fitter, 972-969-1821
Media and Public Affairs
Robert Bobo, 972-969-4020
Michael Lawson, 301-682-0304
President of Investor Relations and Corporate Communications
Investor Relations Manager