Shale Support, which provides proppant for oil and gas drilling, has gained capital from Austin, TX-based CrowdOut Capital LLC to acquire two mines that would double its reserves.
Neither CrowdOut, a private lender for middle market companies, nor Shale Support provided financial details or the mine locations. CrowdOut said the multi-million dollar term loan” would support fracture (frack) sand acquisitions holding more than 100 million tons of sand on 1,000-plus acres in the southeastern United States.
“The frack sand business is growing quickly, and we needed a partner that could be nimble and help us to keep pace with market demand,” said Shale Support President Jeff Bartlam. “CrowdOut provided the flexibility and efficiency that rigid traditional lenders could not.”
Shale Support, which provides proprietary Delta Pearl sand, said its network now contains more than 100 million tons of sand reserves, with three processing plants total in Kinder and Baywood, LA, and in Picayune, MS, where it is headquartered.
Backed by OFS Energy Fund, Shale Support operates a mining and transload network with terminals that serve the Permian Basin, Midcontinent and the Eagle Ford, Haynesville, Marcellus, Tuscaloosa Lime and Utica shales.
“We are seeing more companies like Shale Support seek out nonbank financing solutions, especially in the energy and oil and gas space,” said CrowdOut CEO Alexander Schoenbaum. “Our flexible structures and collaborative approach to underwriting loans is a unique value proposition over banks and traditional credit funds.”
CrowdOut provides term loans to middle market companies with annual revenues of $10-500 million that seek to expand, acquire or grow. The financial firm claims it helps reduce lending costs by streamlining the process, shortening the duration and reducing fees/expenses. With the Shale Support transaction, CrowdOut said it has originated more than $135 million in loans.
CrowdOut provided the debt financing as administrative agent with Encina Equipment Finance serving as the collateral agent.
The U.S. onshore frack sand market is expected to be volatile in the near term as competition remains fierce among suppliers and producers that cut back on completions in the biggest market of all, the Permian.
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