Preferred Proppants Sells Bloomer, Wis., Sand Plant

Preferred Proppants LLC announced certain subsidiaries of Preferred have sold its Bloomer, Wis., sand plant, access to frac sand reserves through lease agreements and royalty rights, as well as corresponding facilities and equipment to Frontier Sand LLC for cash and future consideration, subject to closing and post-closing adjustments.

Commenting on the Bloomer transaction, founder and CEO Michael O’Neill said, “This sale, along with our previously announced Blair, Wis., transaction, is part of our strategy that was put in place during the previous market downturn to be the regional and in-basin leader within the space. We are strong believers in the shift to regional and local sand as the primary source of supply to the major basins, and have now sold all of our assets that don’t support that strategy.”

Preferred’s localized footprint will include an expected three new Texas in-basin plants across the Permian and Eagle Ford shale to complement its existing portfolio of assets that include its Genoa, Neb., and Sanders, Ariz., facilities. The Genoa and Sanders facilities provide regionally accessed sand and, at Genoa, coated proppants as well, including coarse mesh sizes, as well as other product offerings to multiple basins.

The Bloomer transaction, as well as the sale of the previously announced Blair, Wisconsin facility, combined with other strategic actions undertaken by the Company, have been the culmination of a plan put in place almost three years ago to be the lowest cost-landed-at-well (CLAW) regional and in-basin provider of frac sand.

In pursuing a localization strategy, Preferred has been reducing its train car fleet as the company shifts its mine footprint locally to position more of its sales to be delivered by truck, avoiding costly rail freight charges for customers. In doing so, Preferred has shed almost one-fifth of its rail cars since last quarter.

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