One of the critical elements in hydraulic fracturing (fracking) for oil and gas deposits is ordinary sand. The stuff is used to prop open the fissures blasted into the sub-surface rock by the fracking process. Demand for sand is very strong right now, and Pioneer Natural Resources Co. (NYSE: PXD) has decided that now is the time to acquire a guaranteed supply. Another gas producer, EOG Resources Inc. (NYSE: EOG) has owned its sand supply for more than three years.
Pioneer today said that it would acquire its main supplier of sand, a Texas company called Carmeuse Holding S.A., for $297 million. The company estimates that the acquisition will save about $65-$70 million annually in sand costs. Pioneer estimates that today’s purchase is equal to about 30 years of demand at current usage rates.
Pioneer stock is down about -2% this afternoon, at $106.20 in a 52-week range of $58.63-$119.19.
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.