Pioneer to Move to All West Texas Sand in 2019

Pioneer Natural Resources is closing its sand mine in Brady, Texas as the company transitions proppant supply to West Texas sand sources, the company announced Nov. 15.

The Dallas-based E&P company plans to stop operations at the Brady facility during first quarter of 2019 and transition to 100 percent West Texas sand by May 2019.

The move will provide Pioneer an estimated $400,000 per well in sand savings. The company will also recognize a noncash after-tax charge of $350 to $400 million in fourth quarter of 2018.

The sand, or proppant, is used for hydraulic fracturing (known commonly in the oil and gas industry as fracking).

West Texas sand has picked up steam and popularity this year as drillers pump more oil out of the U.S.’ hottest shale play, the Permian Basin.

“Our Brady sand mine and other Brady sand sources have been an integral part of Pioneer’s success and were critical in our transition to horizontal shale development. However, new West Texas sand mines with their low cost of mining and proximity to our Permian acreage position have provided us a more cost-effective, long-term source of sand supply,” Timothy Dove, Pioneer’s CEO, said in a company statement. “This shift will decrease our costs, increase capital efficiencies and benefit corporate returns.”