Proppant | Partnerships

Diamondback Signs Proppant Supply Agreement with Black Mountain Sand

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   |    Thursday,August 03,2017

[SUMMARY: Black Mountain Sand LLC, one of the first movers in the Permian sand rush, signed a supply contract with Diamondback.  The company has dedicated a significant portion of its 40/70 and 100 mesh capacity to Diamondback Energy in a multi-year contract.

Travis Stice, Diamondback Chief Executive Officer, commented, "We are excited about our Permian based partnership with Black Mountain Sand and the advantages it will afford both parties. A long-term commitment with a local sand supplier guarantees us a secure source of supply to execute our drilling plans in the Midland and Delaware Basins at a cost that will improve our single well economics, helping us maintain our position as the low cost operator in the Permian Basin."

"We are thrilled to be a part of this unique partnership with Diamondback. The location of our reserves in the heart of the Permian Basin provides us a major cost advantage that we can pass through to our customers as they develop their Midland and Delaware Basin assets," said Rhett Bennett, Black Mountain Chief Executive Officer. "Through the continued support of our financial sponsor and the reserves we've secured throughout the basin, we will be in a position to support Diamondback's growth needs for a very long time."]

ORIGINAL RELEASE

Black Mountain Sand LLC ("Black Mountain" or the "Company) announced that the Company has entered into a new multi-year supply contract with Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback") beginning in early 2018. This agreement will ensure Diamondback's long-term continuity of frac sand supply through committed capacity of Black Mountain's two 4 million tons per year facilities and 1.5 billion tons of in-basin frac sand reserves.

Black Mountain will dedicate a substantial portion of its Permian mine capacity to Diamondback, providing a single, secure source of in-basin 100 mesh and 40/70 frac sand supply. Black Mountain has accumulated nearly 30,000 acres of quality sand reserves with strategic road access, abundant water supply, and avoidance of the dune sagebrush lizard habitat. As the largest in-basin sand company, Black Mountain's unrivaled acreage position and 2018 mining capacity of over 8 million tons will help meet Diamondback's rapidly expanding frac sand demand. In addition, the strategic position of Black Mountain's acreage, within trucking distance of Diamondback's Midland and Delaware acreage, will significantly streamline cumbersome logistics components in the value chain. This will allow Diamondback to create a flexible supply chain and secure frac sand at the lowest delivered cost in the Permian Basin.

Travis Stice, Diamondback Chief Executive Officer, commented, "We are excited about our Permian based partnership with Black Mountain Sand and the advantages it will afford both parties. A long-term commitment with a local sand supplier guarantees us a secure source of supply to execute our drilling plans in the Midland and Delaware Basins at a cost that will improve our single well economics, helping us maintain our position as the low cost operator in the Permian Basin."

"We are thrilled to be a part of this unique partnership with Diamondback. The location of our reserves in the heart of the Permian Basin provides us a major cost advantage that we can pass through to our customers as they develop their Midland and Delaware Basin assets," said Rhett Bennett, Black Mountain Chief Executive Officer. "Through the continued support of our financial sponsor and the reserves we've secured throughout the basin, we will be in a position to support Diamondback's growth needs for a very long time."

About Black Mountain Sand

Black Mountain Sand is an NGP-backed sand supplier with nearly 30,000 acres accumulated within Winkler County, and primarily serves the Permian Basin. The Company's in-basin product, Winkler White™, provides a high quality, cost-effective proppant solution to meet the demands of the Permian Basin. For more information, visit www.blackmountainsand.com.


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