US Silica adds frack sand capacity, Permian location through deal

By Luke Geiver | August 18, 2017

A frack sand supply giant just got bigger. U.S. Silica Holdings Inc. has agreed to acquire a Missouri sand mining and supply company for $95.4 million. With its purchase of Mississippi Sand LLC, U.S. Silica will add a frack supply capacity of 1.2 million tons per year with the potential to increase that to 1.6 million tons year.

Mississippi Sand has five barge terminals, three rail terminals and access to the SCOOP/STACK, Marcellus/Utica, Eagle Ford, Fayetteville, Haynesville, Permian and DJ Basins. The majority—70 percent—of the company’s current sand loads are traveling to the Haynesville and the Northeast by barge.

Nearly two-thirds of the current facility’s production is of 40/70 mesh sand that is one of the highest demand products, according to the company. The plant is just 40 miles from U.S. Silica’s Pacific Missouri mine and plant.

More than two-thirds of Mississippi Sand’s current sand capacity is under contract through 2020 with oilfield service or exploration and production companies.

“This acquisition will enable us to nearly double the size of our capacity from the area and take advantage of multiple modes of distribution to better serve our customers,” said Bryan Shinn, CEO of U.S. Silica.

To fund the purchase, the company will utilize cash on hand. Don Merril, chief financial officer, said the company will continue to use its strong balance sheet to fund value-added investments.

In addition to the Missouri facility, the deal will also include an idled Texas facility that U.S. Silica said it hopes to restart and use as part of its in-basin supply strategy for the Permian.