U.S. Silica Holdings Inc. announced annualized SG&A cost reductions of approximately $20 million in response to the recent drop in oil prices and the expected decline in drilling and completion activity in North American shale over the coming quarters.
Additionally, the company plans to idle its Sparta, Wis., facility, taking 1.5 million tons of proppant capacity offline.
The company will continue to closely monitor industry proppant demand to align costs with market conditions.
“The headwinds created by recent OPEC actions led to the difficult decisions we are announcing today,” said Bryan Shinn, chief executive officer. ”These strategic actions, supported by the more consistent earnings and cash flows of our Industrial & Specialty Products segment, will help U.S. Silica remain the industry leader and continue to provide our customers outstanding products and services.”