Midland based mostly ProPetro Holding Corp. has entered into an settlement with associates of Pioneer Natural Resources Company by which ProPetro will change into a strategic long-term service supplier to Pioneer offering strain pumping and associated providers for a time period of as much as 10 years. Under the settlement, ProPetro will purchasePioneer’s strain pumping property (PPS) in change for complete consideration of $400 million comprised of $110 million of money and 16.6 million shares of ProPetro widespread inventory, representing roughly 17% Pioneer possession in ProPetro following issuance. The transaction is predicted to shut throughout the fourth quarter of 2018, topic to the satisfaction of customary closing circumstances, together with regulatory approval.
PPS property embrace eight frac fleets with 510,000 hydraulic horsepower (HHP), in addition to three coiled tubing models and related gear. Upon closing of the transaction, ProPetro could have 28 frac fleets with 1,415,000 HHP working within the Permian Basin. In addition, PPS property embrace a best-in-class upkeep facility located on 111 contiguous acres positioned close to ProPetro’s present upkeep operations in Midland. As a end result, the mixture will improve ProPetro’s scale within the Permian Basin and develop its main operational observe file whereas permitting Pioneer to enhance capital effectivity and long-term price competitiveness in its core operations.
Dale Redman, ProPetro co-founder and CEO, acknowledged, “We couldn’t be extra excited concerning the alternative to develop our relationship with Pioneer by means of this transformational transaction. The mixture of ProPetro and Pioneer Pumping Services will end result within the largest and best strain pumping supplier within the Permian Basin. Equally as essential is our strategic long-term service settlement, and we sit up for persevering with our shut partnership with Pioneer as they additional develop their world class acreage right here within the Permian Basin.”
The complete transaction worth of $400 million is comprised of $333 million for the strain pumping property and $67 million for actual property amenities and different property. (Source and picture: ProPetro)
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