Smart Sand Inc. announced that it has reached a settlement with U.S. Well Services LLC (USW), a subsidiary of U.S. Well Services Inc. (USWS), in connection with the approximate $50.9 million judgment issued by the Superior Court of the State of Delaware in favor of Smart Sand in its breach of contract case against USW.
Under the terms of the settlement, USW has paid to Smart Sand a $35 million cash payment and USWS has entered into a two-year Right of First Refusal Agreement with Smart Sand covering all purchases of Northern White frac sand by USWS and its affiliates in the continental United States from Jan. 1, 2022 through Dec. 31, 2023.
Charles Young, Smart Sand’s chief executive officer, commented, “We are very pleased to have reached an agreement with U.S. Well and bring this long running action to a beneficial conclusion. This outcome makes our business stronger. The cash payment provides us with immediate liquidity, enhancing our already strong balance sheet. The right of first refusal agreement provides us with an opportunity to once again sell sand to U.S. Well and increase our Northern White sales volumes over the next two years. We are now free to focus exclusively on our core business and believe that the future has never been brighter for Smart Sand.”