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Frontier Sand acquires Wisconsin frac-sand plant


Preferred Proppants LLC subsidiary Preferred Sands has sold a frac sand plant in Bloomer, Wisconsin, to Frontier Sand.

The acquisition includes access to frac-sand reserves through lease agreements and royalty rights, as well as corresponding facilities and equipment. The value of the cash transaction was not revealed.

The sale marks a milestone for Radnor, Pennsylvania-based Preferred, which now has fully exited the Northern White frac sand market in an effort to develop multiple in-basin sand plants, Preferred officials said in a press release.

"This sale, along with our previously announced Blair, Wisconsin 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," said Michael O'Neill, Preferred's founder and chief executive officer. "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 Eagle Ford shale to complement an existing portfolio that includes its facilities in Genoa, Nebraska, and Sanders, Arizona, company officials said.

The Genoa and Sanders facilities provide regionally accessed sand. The Genoa facility also includes access to coated proppants.

Preferred has reduced its rail-car fleet as the company shifts its mine footprint locally to position more of its sales to be delivered by truck. The company has shed almost one-fifth of its rail cars since the last quarter, Preferred officials said.

In October, Preferred announced an agreement to sell the sand mine in blair to Source Energy for $80 million, and entered entered into a production payment agreement with respect to certain exploration rights on more than 3,600 acres in the Peace River Valley of Alberta.

Preferred also announced plans to sell its two frac-sand rail terminals in Chetwynd and Fort Nelson, British Columbia.

Contact Progressive Railroading editorial staff.

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