An Emerge Energy Services LP subsidiary has acquired 94 million tons of northern white silica sand reserves in Jackson County, WI, from a unit of Seventy Seven Energy Inc.

The deal between Emerge’s Superior Silica Sands LLC (SSS) and Performance Technologies LLC (PTL), owned by Seventy Seven, includes owned and leased land, sand deposit leases/related prepaid royalties and transferable mining/reclamation permits. The parties also entered into a sand purchase option agreement that provides PTL with a market-based discount on sand it purchases.

Emerge, based in Fort Worth, TX, mines, produces and distributes silica sand, a key input for hydraulic fracturing. Seventy Seven was spun off last year from Chesapeake Energy Corp. (see Shale Daily, March 3).

“PTL has been a valued customer of SSS for several years, so consummating a transaction with them made strong strategic sense,” SSS CEO Rick Shearer said. “This transaction not only provides SSS with an increase to its high quality sand reserves but also strengthens our position in the marketplace with a leading pressure pumper across a number of shale plays in North America.”

Under the new agreements with PTL, SSS has the option to supply the contracted tons from its existing footprint of northern white sand operations or construct a sand mine and dry plant in Jackson County.

“Given the current challenging market conditions for proppant demand, SSS will defer the construction of the new facility until the North American oil and gas markets improve,” executives said.