Houston-based Hi-Crush Partners will buy the Permian Basin Sand Co. for $275 million to beef up its sand reserves to service rapidly growing drilling activity in West Texas.
Hi-Crush is one of the biggest oilfield services business in providing sand to the hydraulic fracturing, or fracking process. Massive amounts of sand are pumped into the wells to help fracture the shale rock and release hydrocarbons.
Virtually sold out of sand in the first quarter of this year because of increased activity, Hi-Crush is acquiring Permian Basin Sand’s 1,226-acre sand reserve with more than 55 million tons of sand.
“Location is critical, and nobody will be closer or better positioned to efficiently serve the Permian Basin,” Hi-Crush CEO Robert Rasmus said in a prepared statement.
Most of Hi-Crush’s existing sand reserves are focused on Northern White sand from Wisconsin. Rasmus said the Permian deal helps to diversify its mix. The deal is expected to close by the end of March.
The deal is seven-year-old Hi-Crush’s largest acquisition thus far.