October 17, 2017 - 3:58 PM EDT
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Preferred Sands Announces Sale of Blair Facility to Source Energy Services Ltd. of Canada


Preferred Proppants, LLC (“Preferred Sands” or “Preferred” or the “Company”) today announced that it has entered into a definitive agreement for the sale of its Blair, Wisconsin facility and its Canadian assets (collectively, the “Blair” transaction) to Source Energy Services Ltd. (“Source”) (TSX: SHLE) for USD $80 million in cash, subject to closing and post-closing adjustments, and entering into a production payment agreement in respect of certain exploration rights in the Peace River Valley of Alberta.

The Blair, Wisconsin sand mine and plant consists of approximately 29 million tons of northern white sand reserves with associated wet and dry plant facilities that currently have finished goods capacity of approximately 1.1 million tons of sand per year. Additionally, Preferred will be selling its two owned rail frac sand terminals, Chetwynd and Fort Nelson, in British Columbia, Canada, as well as exploration rights on over 3,600 acres in the Peace River Valley of Alberta

Commenting on the Blair transaction, Founder and CEO Michael O’Neill said, “This is a positive transaction for both parties. Source is able expand their Northern White frac sand processing capacity and integrated terminal network by getting first-class assets and people. For Preferred, the sale will provide capital to further strengthen our balance sheet as we continue to expand on our in-basin and regional sand strategy.”

The consideration for the Blair transaction includes USD $80 million in cash, subject to normal closing and post-closing adjustments. In addition, the parties are entering into a production payment agreement whereby any production from the exploration rights in the Peace River Valley of Alberta commencing on commercial production by Source would be subject to a production payment. Closing is expected to occur in November 2017, subject to the satisfaction of closing conditions customary in transactions of this nature.

With strategic plant locations in Arizona and Nebraska, as well as several new Texas plants expected in early 2018, Preferred services exploration & production and oilfield service companies throughout North America and is continuously recognized for its environmental responsibility and achievements in health and safety as an industry-leading operator.

For more information about Preferred Sands, visit www.PreferredSands.com.

About Preferred Sands

Preferred Sands is one of North America’s leading manufacturers and providers of high-quality sand and innovative proppant technologies. With a focus on in-basin and regional sand, Preferred currently has fully operational plants strategically located in Arizona, Nebraska and Wisconsin, as well as in Texas expected in early 2018. Preferred’s innovative proppant technology solutions include Preferred Polymeric Proppants, the most advanced downhole coated proppant technology designed for maximum production efficiency; FloPRO PTT™, proppant transport technology designed for superior proppant distribution; and DustPRO™, the first dust prevention technology designed to reduce airborne particles during all sand transfer points. These pioneering products have earned Preferred world-wide recognition as a leader in innovative and sustainable technologies throughout the oil and gas, chemical, and technology industries.

The company’s various awards include a finalist for the World Petroleum Council’s Technological Development recognition in 2017; 2014 CPI Polyurethane Innovation Award for Improving Oil Productivity; 2014 R&D 100 Award for Improving Oil Productivity; 2013 Oil & Gas Awards for Environmental Initiative of the Year, Industry Supplier of the Year, and Excellence in Environmental Stewardship; and 2012 Ernst & Young Entrepreneur of the Year in Energy, Cleantech, and Natural Resources.

Preferred Sands
Investor Relations, 855-542-3256
[email protected]
Matt Goldstein, 484-385-2953
[email protected]

Source: Business Wire (October 17, 2017 - 3:58 PM EDT)

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