ProPetro Holding Announces Acquisition of Pumping Services Assets from Pioneer Natural Resources and Long-Term Service Agreem...
November 13 2018 - 8:30AM
Business Wire
ProPetro Holding Corp. (NYSE:PUMP) (“ProPetro” or the
“Company”) announced today that it has entered into an agreement
with affiliates of Pioneer Natural Resources Company (NYSE:
PXD) (collectively, “Pioneer”) by which ProPetro will become a
strategic long-term service provider to Pioneer providing pressure
pumping and related services for a term of up to 10 years. Under
the agreement, ProPetro will acquire Pioneer’s pressure pumping
assets (“PPS”) in exchange for total consideration of $400 million
comprised of $110 million of cash and 16.6 million shares of
ProPetro common stock, representing approximately 17% Pioneer
ownership in ProPetro following issuance. The transaction is
expected to close during the fourth quarter of 2018, subject to the
satisfaction of customary closing conditions, including regulatory
approval.
Dale Redman, ProPetro co-founder and CEO, stated, “We could not
be more excited about the opportunity to expand our relationship
with Pioneer through this transformational transaction. The
combination of ProPetro and Pioneer Pumping Services will result in
the largest and most efficient pressure pumping provider in the
Permian Basin. 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.”
“We are proud to welcome our new teammates from Pioneer Pumping
Services as the combination with ProPetro will create an unmatched
workforce in the industry. Finally, we want to thank our people,
our customers, our supply chain partners, and the Permian Basin
community for their continued long-term support of the Company and
our efforts.”
Timothy L. Dove, Pioneer President and CEO, stated, “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. We have had a strong
relationship with the ProPetro team for many years, and this
contract solidifies their position as a key partner in our
development program. The long-term nature of this agreement will
benefit both companies.
“I would also like to personally thank all of the dedicated
employees of Pioneer Pumping Services. Their unrelenting commitment
to safety, efficiency and execution has underpinned our success in
the Permian Basin and we are excited to have them continue working
on Pioneer locations for years to come in our partnership with
ProPetro.”
PPS assets include eight frac fleets with 510,000 hydraulic
horsepower (HHP), as well as three coiled tubing units and
associated equipment. Upon closing of the transaction, ProPetro
will have 28 frac fleets with 1,415,000 HHP operating in the
Permian Basin. In addition, PPS assets include a best-in-class
maintenance facility situated on 111 contiguous acres located near
ProPetro’s current maintenance operations in Midland. As a result,
the combination will increase ProPetro’s scale in the Permian Basin
and expand its leading operational track record while allowing
Pioneer to improve capital efficiency and long-term cost
competitiveness in its core operations.
The total transaction value of $400 million is comprised of $333
million for the pressure pumping assets and $67 million for real
estate facilities and other assets1. The total transaction will be
funded through a combination of $290 million of ProPetro shares
issued to Pioneer and $110 million in cash. The 16.6 million shares
issued by ProPetro are valued at $17.48 per share (based on a
20-day volume weighted average price as of market close on November
9, 2018). ProPetro will pay $55 million of the cash portion of the
purchase price to Pioneer at closing, with the balance to be paid
within the following sixty days. ProPetro plans to use a
combination of its current revolving credit facility and its
current cash balance to fund the cash portion.
Goldman Sachs & Co. LLC served as sole financial advisor to
ProPetro and Hunton Andrews Kurth LLP served as legal counsel to
ProPetro in this transaction.
(1)
The $67 million in real estate and other
assets is based on the current appraised value of the real estate
and the original purchase price of non-pressure pumping
equipment.
Conference Call Information
ProPetro will host a conference call to discuss the transaction
on Wednesday November 14, 2018 at 8:00am central time. This call
will also be webcast, along with a presentation slide deck on
ProPetro’s website at www.propetroservices.com. The slide deck
will be published on the website the morning of the call. To access
the conference call, U.S. callers may dial toll free 1-844-340-9046
and international callers may dial 1-412-858-5205. Please call ten
minutes ahead of the scheduled start time to ensure a proper
connection. A replay of the conference call will be available for
one week following the call and can be accessed toll free by
dialing 1-877-344-7529 for U.S. callers, 1-855-669-9658 for
Canadian callers, as well as 1-412-317-0088 for international
callers. The access code for the replay is 10126420.
About ProPetro Holding Corp.
ProPetro is a Midland, Texas-based oilfield services company
providing pressure pumping and other complementary services to
leading upstream oil and gas companies engaged in the exploration
and production of North American unconventional oil and natural gas
resources. For more information concerning ProPetro, visit
www.propetroservices.com.
About Pioneer Natural Resources
Pioneer is a large independent oil and gas exploration and
production company, headquartered in Dallas, Texas, with operations
in the United States. For more information, visit www.pxd.com.
Except for historical information contained herein, the
statements in this news release are forward-looking statements that
are made pursuant to the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements and the business prospects of ProPetro are subject to a
number of risks and uncertainties that may cause ProPetro's actual
results in future periods to differ materially from the
forward-looking statements. These risks and uncertainties include,
among other things, volatility of commodity prices, government
regulation or action, the ability to obtain approvals from third
parties and negotiate agreements with third parties on mutually
acceptable terms and litigation. These and other risks are
described in the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other filings with the Securities and
Exchange Commission. In addition, the Company may be subject to
currently unforeseen risks that may have a materially adverse
impact on it. Accordingly, no assurances can be given that the
actual events and results will not be materially different than the
anticipated results described in the forward-looking statements.
ProPetro undertakes no duty to publicly update these statements
except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20181113005374/en/
ProPetro Holding Corp.Sam Sledge, 432-688-0012Director of
Investor Relationssam.sledge@propetroservices.com
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