Pioneer Natural Resources will purchase an interest in US Silica’s sand reserves in West Texas to secure a supply of low-cost sand for 15 years.
Pioneer expects the sand from US Silica’s Lamesa mine to produce approximately six million tonnes annually of predominately fine grade 100 mesh and 40/70 mesh sand, with initial production expected in the fourth quarter of 2018.
Timothy Dove, Pioneer's president and CEO, says: “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. US Silica has been a trusted partner for many years, and this contract solidifies their position as one of our key suppliers of proppant.”
According to Pioneer, initial sand volumes are anticipated to begin during the first quarter of 2019, with its initial supply increasing from 1.4m tonnes to 2m tonnes per year from 2020 onwards.
