Pioneer selling pressure pumping assets to ProPetro for US$400 million

20 November 2018, Week 46, Issue 433

Pioneer Natural Resources has said that it will sell off its pressure pumping assets to ProPetro Holding in a cash and stock deal worth US$400 million.

The sale, which was announced on November 13, includes US$110 million in cash and 16.6 million shares in ProPetro common stock. Following the deal, Pioneer will own a 17% stake in ProPetro. 

The assets being sold include eight fleets with 510,000 hydraulic horsepower (HHP) and related facilities, bringing ProPetro’s total assets to 28 fleets with 1.415 million HHP and making it the largest pressure pumping provider in the Permian Basin.

Under the agreement, ProPetro will also provide pressure pumping and related services to Pioneer in the Permian for up to 10 years.

“We could not be more excited about the opportunity to expand our relationship with Pioneer through this transformational transaction,” commented ProPetro’s co-founder and CEO, Dale Redman. “Equally as important is our strategic long-term service agreement, and we look forward to continuing our close partnership with Pioneer as they further develop their world-class acreage here in the Permian Basin.”

The move is in line with Pioneer’s plans to simplify its business and focus on its assets in the Permian. The company is currently working to sell its non-core Eagle Ford shale acreage. The transaction with ProPetro is anticipated to improve Pioneer’s cost-competitiveness in the Permian. 

“We are very pleased to announce our agreement with ProPetro that provides Pioneer with dedicated capacity from the leading pressure pumping service provider in the Permian Basin,” said Pioneer’s CEO, Timothy Dove, in a company statement. “Their robust operational track record aligns with our commitment to being the most efficient, low-cost Permian operator.”

The deal is expected to close during the fourth quarter of 2018, subject to customary conditions including regulatory approval. 

 

Edited by

Anna Kachkova

Editor

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