MIDLAND, Texas– ProPetro Holding Corp. (NYSE:PUMP) has announced a significant strategic move to solidify its leadership in pressure pumping within the Permian Basin. The company has entered into a definitive agreement with Pioneer Natural Resources Company (NYSE:PXD) affiliates to acquire Pioneer Pumping Services’ assets. This acquisition not only expands ProPetro’s operational scale but also establishes a long-term service partnership with Pioneer, ensuring sustained growth and efficiency in one of the most prolific oil regions.
Under the terms of the agreement, ProPetro will acquire Pioneer’s pressure pumping assets in exchange for a total consideration of $400 million. This comprises $110 million in cash and 16.6 million shares of ProPetro common stock. Upon closing, Pioneer is expected to hold approximately 17% ownership in ProPetro, demonstrating a strong alignment of interests and long-term commitment. The transaction is anticipated to be finalized during the fourth quarter of 2018, pending customary regulatory approvals and closing conditions.
Dale Redman, ProPetro’s co-founder and CEO, expressed enthusiasm about the deal, stating, “Expanding our relationship with Pioneer through this transformational transaction is an exciting opportunity. The integration of ProPetro and Pioneer Pumping Services will create the largest and most efficient pressure pumping provider in the Permian Basin. Our strategic long-term service agreement is equally important, and we are eager to continue our close collaboration with Pioneer as they advance their world-class acreage in the Permian Basin.”
Redman further emphasized the human aspect of the acquisition: “We are proud to welcome our new colleagues from Pioneer Pumping Services. Combining our teams will forge an unmatched workforce in the industry. We also extend our gratitude to our people, customers, supply chain partners, and the Permian Basin community for their ongoing support of ProPetro’s endeavors.”
Timothy L. Dove, President and CEO of Pioneer Natural Resources, also commented on the agreement, “We are very pleased to announce our agreement with ProPetro, which secures dedicated capacity from a leading pressure pumping service provider in the Permian Basin for Pioneer. ProPetro’s strong operational performance aligns perfectly with our commitment to efficiency and cost-effectiveness in our Permian operations. Our long-standing relationship with the ProPetro team makes them a key partner in our development program, and this long-term agreement will benefit both companies.”
Dove acknowledged the contribution of Pioneer Pumping Services employees: “I would like to personally thank the dedicated employees of Pioneer Pumping Services. Their unwavering dedication to safety, efficiency, and execution has been fundamental to our Permian Basin success. We are pleased they will continue to contribute to Pioneer’s operations through our partnership with ProPetro for years to come.”
The assets being acquired from Pioneer Pumping Services include eight frac fleets boasting 510,000 hydraulic horsepower (HHP), along with three coiled tubing units and related equipment. Post-acquisition, ProPetro will command a formidable fleet of 28 frac fleets with a total of 1,415,000 HHP in the Permian Basin. Significantly, the deal also includes a state-of-the-art maintenance facility spanning 111 acres near ProPetro’s existing Midland operations. This strategic co-location will enhance operational synergies and efficiencies. The acquisition is set to bolster ProPetro’s scale and operational efficiency, while enabling Pioneer to enhance capital efficiency and long-term cost management in its core operations.
The total transaction value is broken down into $333 million for the pressure pumping assets and $67 million for real estate and other assets. The acquisition funding structure involves $290 million in ProPetro shares issued to Pioneer and $110 million in cash. The share valuation is based on a 20-day volume-weighted average price of $17.48 per share as of November 9, 2018. The cash component will be paid in two tranches: $55 million at closing and the remaining balance within sixty days. ProPetro intends to utilize its revolving credit facility and existing cash reserves to finance the cash portion of the transaction.
Goldman Sachs & Co. LLC acted as the exclusive financial advisor to ProPetro, and Hunton Andrews Kurth LLP served as legal counsel for ProPetro in this transaction.
ProPetro held a conference call on November 14, 2018, to discuss the transaction, which was also webcast on ProPetro’s investor relations website.
About ProPetro Holding Corp.
ProPetro Holding Corp., based in Midland, Texas, is a leading oilfield services company specializing in pressure pumping and complementary services. They cater to upstream oil and gas companies involved in North American unconventional resource exploration and production. For further details, visit www.propetroservices.com.
About Pioneer Natural Resources
Pioneer Natural Resources, headquartered in Dallas, Texas, is a major independent oil and gas exploration and production company with operations across the United States. More information is available at www.pxd.com.
Forward-Looking Statements
This news release contains forward-looking statements subject to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties, including commodity price volatility, regulatory factors, and the ability to obtain necessary approvals. These risks are detailed in ProPetro’s SEC filings. Actual results may differ materially from forward-looking statements, and ProPetro undertakes no duty to update these statements except as required by law.
