Covia Energy and Black Mountain Sand Combine to Create Iron Oak Energy Solutions, a Leading North American Proppant Supplier
Combined company to benefit from expanded and diversified geographic footprint to better serve customers and meet increasing demand for proppant across North America
HOUSTON, Nov. 4, 2024 /PRNewswire/ -- Covia Energy LLC ("Covia Energy") and Black Mountain Sand Holdings LLC ("Black Mountain Sand") today jointly announced the closing of a definitive agreement to merge in an all-stock transaction. The combined company, which now operates under the name Iron Oak Energy Solutions LLC ("Iron Oak Energy" or the "Company") is a leading diversified proppant supplier in North America with an active annual production capacity of approximately 30 million tons of sand. The Company's assets include strategically located in-basin sand mines in the Permian Basin and Eagle Ford Shale, as well as premium Northern White Sand facilities with an extensive logistics network.
Michael Segura, President and Chief Executive Officer of Covia Energy, will serve as the President and Chief Executive Officer of Iron Oak Energy. Scott McNeill, Chief Executive Officer of Black Mountain Sand, will join the Board of Iron Oak Energy and serve as a strategic advisor. Key commercial, operational, and administrative roles will be filled by management of both companies. Iron Oak Energy will be headquartered in Houston, Texas and will maintain a corporate presence in Fort Worth, Texas.
"This combination creates a leading proppant provider across the most active oil and gas shale basins in North America, and with a debt-free balance sheet, Iron Oak Energy is well positioned to pursue further mergers and acquisitions," said Mr. Segura. "The scale and reach of the combined company are unmatched and allow us to better serve our existing customers' needs across multiple basins and capture new opportunities. Further, our diversified network of production facilities and significant storage position in the Permian Basin provide the scale, reliability, and deliverability of volumes required to meet the increasing proppant demands of longer-lateral, higher intensity completions."
Mr. McNeill added, "We are excited to enter this new chapter and form Iron Oak Energy in partnership with Covia. As we look forward, we are eager to combine our operations, where our respective employees share a similar culture of safety, customer service, and operational excellence and will have exciting opportunities inside a larger organization. I look forward to working closely with the management team as we enhance the value of our combined businesses and continue to build on the expanded platform this merger creates."
Iron Oak Energy supplies quality frac sand to the Delaware and Midland Basins with three large-scale facilities in Winkler County, Texas and one facility in Crane County, Texas. The plants supply multiple products from high-quality reserves in the Permian Basin and have over 16 million tons of annual production capacity and a combined total of over 100,000 tons of storage. The Company's two Eagle Ford facilities, located in Atascosa County, Texas and Dimmit County, Texas, are leading in-basin plants located in close proximity to prime areas of drilling and completion activity.
Northern White Sand is mined from superior deposits and delivered to multiple oil and gas shale plays. Iron Oak Energy operates a premier Northern White Sand mine, located in Wedron, Illinois, with over seven million tons of annual production capacity and connections to multiple Class 1 railroads. The Company also operates the technologically advanced, highly reliable Northern White facility in Tunnel City, Wisconsin. Both facilities offer direct access to major producing basins including the Marcellus, Utica, Bakken, and DJ Basin. Iron Oak Energy couples these mines with an extensive network of strategically located in-basin terminals which are unit train capable and equipped with storage and high-speed loadout facilities.
Covia Energy was separated from Covia Solutions on July 1, 2024. Covia Solutions, a leading provider of minerals solutions for industrial markets, is not a party to the merger.
TPH& Co., the energy business of Perella Weinberg Partners, acted as financial advisor to Covia Energy LLC. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Covia Energy LLC. Vinson & Elkins LLP acted as legal advisor to Black Mountain Sand.
About Iron Oak Energy
Iron Oak Energy is a leading diversified proppant provider in North America, with eight active production facilities and the ability to supply every major shale basin in North America. The Company provides in-basin sand to producers from strategically positioned mines in the Permian Basin and Eagle Ford Shale as well as high quality Northern White Sand to producers primarily in the Marcellus, Utica, Bakken, and DJ Basin. The Company is privately held and was formed through the November 2024 merger of Covia Energy and Black Mountain Sand, and is sponsored by Anchorage Capital Advisors L.P., Golden Gate Capital, and NGP. Iron Oak Energy is headquartered in Houston, Texas with a regional office in Fort Worth, Texas. For more information, please visit www.ironoakenergy.com.
About Anchorage Capital Advisors
Anchorage Capital Advisors, L.P. is a New York-based registered investment adviser founded in 2022 as the successor organization to Anchorage Capital Group, L.L.C. The firm manages approximately $22.5 billion in assets across the credit spectrum and throughout a company's capital structure, including performing loans and bonds, distressed debt, special situations, and structured credit. Anchorage primarily invests in the U.S. and Europe and seeks to capture attractive opportunities across the corporate credit spectrum.
About Golden Gate Capital
Golden Gate Capital is a San Francisco-based private equity firm with approximately $20 billion in cumulative committed capital. With a long-term investment philosophy, the principals of Golden Gate Capital have a long history of investing across a wide range of industries and transaction types, including going-privates, corporate divestitures, and recapitalizations, as well as debt and public equity investments. For more information, visit www.goldengatecap.com.
About NGP
NGP is a premier private equity firm that believes energy is essential to progress. Founded in 1988, NGP is moving energy forward by investing in innovation and empowering energy entrepreneurs in natural resources and energy transition. With over $23 billion of cumulative equity commitments, NGP backs portfolio companies focused on responsibly solving and securing the energy needs of today and leading the way to a cleaner, more reliable, more affordable energy future. For more information, visit www.ngpenergy.com.
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SOURCE Covia Energy LLC
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