Pioneer Natural buys into W. Texas sand mine

One of the largest West Texas oil and gas drillers has bought into a sand mine in that region to cut costs. The Irving company Pioneer Natural Resources, primarily focused on West Texas’ Permian Basin oil field, said last week that it signed an agreement with U.S. Silica Holdings Inc. to buy a 15-year interest in U.S. Silica’s Lamesa sand mine. Pioneer Natural Resources President and CEO Timothy Dove said the agreement will provide sand at around half the cost of the imported sand the oil driller currently uses. The mine is about 60 miles north of Midland and is expected to produce 6 million tons of sand a year for use in hydraulic fracturing, or fracking, the process by which oil and gas drillers combine water, sand and chemicals to fracture shale rock to extract oil and gas reserves. Pioneer Natural Resources holds 750,000 acres in the Permian Basin and is seeking to become a pure-play Permian oil and gas driller by divesting the last of its non-West Texas assets, which are primarily held in South Texas’ Eagle Ford Shale region. The Lamesa frac sand mine was announced in September 2017. The cost to build a facility with production of 2.6 million tons a year was put at $150 million. It is

unclear how much the much larger facility may cost. A news release says Pioneer Natural Resources expects to receive its first sand volumes in the first quarter of 2019. Sand volumes to Pioneer Natural Resources are seen as at least 2 million tons a year by 2020.