US Silica Acquires East Texas Mine Unit for $210M
Sand supplier U.S. Silica Holdings Inc. will acquire the NBR Sand unit from New Birmingham Inc. in a $210 million cash and stock transaction.
The acquisition will expand U.S. Silica’s capacity and product offering for the growing regional sands market, boosting the company’s ability to satisfy customer needs, said Bryan Shinn, president and chief executive officer of U.S. Silica, in a July 18 press release. The company expects the acquisition to generate earnings per share accretion of $.20 to $.30 in 2017.
Tyler, Texas-based NBR Sand operates a single sand mine and plant that can produce just over 2 million tons of fine-grade frac sand per year, U.S. Silica said in the release. The NBR Sand unit produces 40/70 Mesh and 100 Mesh Silica Sand. It has 12 storage silos with capacity of over 10,000 tons and five load-out lanes, and over 20 years of quality reserves. The east Texas facility mainly services producers drilling and completing wells in nearby basins.
“We expect to unlock the full potential of this excellent mine by utilizing our strong customer relationships and power distribution network,” Shinn commented. “We believe demand for regional sands will continue to grow as a cost-effective proppant option for many completions and this is another important step to position U.S. Silica as a leader in the regional sand market.”
The acquisition is expected to close next month.
Jefferies LLC analysts said they supported the acquisition, noting that U.S. Silica’s robust logistics network, including access to 50 transloads and 6,826 railcars, would significantly broaden NBR Sand’s target market. Analysts said they believed the unit’s underperformance is due to the lack of access to the Permian completion market. In a July 18 research note, analysts said they understood U.S. Silica would seek to develop rail loading facilities adjacent to the existing Union Pacific rail line to efficiently move sand to the Permian Basin.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- USA Driving Activity to Increase to All-Time Highs
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension