Pioneer Natural Resources has signed an agreement to sell its pressure pumping assets to ProPetro in a cash-and-stock deal worth $400m.
Under the agreement, ProPetro will become a strategic long-term service provider to Pioneer offering pressure pumping and related services for up to 10 years.
The pressure pumping assets to be divested by Pioneer include 8 fleets with 510,000 hydraulic horsepower (HHP) and related facilities
The acquisition is expected to increase ProPetro’s scale in the Permian Basin, with the company owing 28 fleets with 1,415,000 HHP after the closing of the transaction.
The Texas-based oilfield services company currently offers pressure pumping and other complementary services to major upstream oil and gas companies involved in the exploration and production of North American unconventional oil and natural gas resources.
Pioneer president and CEO Timothy Dove said: “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.
“Their robust operational track record aligns with our commitment to being the most efficient, low-cost Permian operator.”
The transaction consideration includes $110 million of cash and 16.6 million shares of ProPetro common stock.
Following the completion of the transaction, Pioneer will own nearly 17% stake in ProPetro.
The transaction is subject to the satisfaction of customary closing conditions, including regulatory approval.
It is expected to be completed during the fourth quarter of 2018.
ProPetro co-founder and CEO Dale Redman said: “The combination of ProPetro and Pioneer Pumping Services will result in the largest and most efficient pressure pumping provider in the Permian Basin.
“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 extensive resource base in the Permian Basin.”
The sale is expected to enable Pioneer to improve capital efficiency and long-term cost competitiveness in its core operations.
Headquartered in Dallas, Texas, Pioneer is a major independent oil and gas exploration and production company.
Recently, the company signed a purchase and sale agreement with an undisclosed third party to sell 2,900 net acres in the Sinor Nest (Lower Wilcox) field for $132m.