IRVING, Texas (AP) — Carbo Ceramics Inc., which makes substances to boost oil and gas well output, said Friday it plans to idle proppant production at its New Iberia, La., facility in the first half of 2008.
Carbo said the decision was based on the rising cost of imported raw material and the small scale of the New Iberia facility.
Proppants are products used in the hydraulic fracturing of oil and natural gas wells, which stimulates production from hydrocarbon-bearing formations.
The plant's production will be moved to the company's plant in McIntyre, Ga. Carbo said it will continue to operate a distribution center, research and development center and administrative office in New Iberia.
The company said it expects to incur cash costs of about $1 million as a result of the idling. The costs will be recognized over time from November 2007 through the expected idling of the plant in the first half of 2008, Carbo said.
The idling of the facility is expected to reduce fixed production expenses by about $2.5 million annually, the company said.