Preferred Proppants to sell sand mine, rail terminals

Preferred Proppants LLC has reached a definitive agreement to sell a Wisconsin sand mine to Source Energy Services Ltd.

Also known as Preferred Sands, the company entered into a definitive agreement to sell the sand mine in Blair, Wisconsin, to Source Energy for $80 million, and 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 it will sell its two frac-sand rail terminals in Chetwynd and Fort Nelson, British Columbia.

The Wisconsin sand mine and plant consist of 29 million tons of northern white sand reserves with associated wet and dry plant facilities that have finished goods capacity of 1.1 million tons per year, Preferred officials said in a press release.

"For Preferred, the sale will provide capital to further strengthen our balance sheet as we continue to expand on our in-basin and regional sand strategy," said Michael O'Neill, Preferred Sands' founder and chief executive officer.

Closing is expected to occur in November.