Hexion Specialty Chemicals' Oilfield Technology Group Expanding Production and Distribution Network To Meet Energy Extraction Market Needs

COLUMBUS, Ohio, Jan 29, 2009 (BUSINESS WIRE) -- Hexion Specialty Chemicals, Inc., announced today that its Oilfield Technology Group (OTG) is expanding its North American production and distribution network to meet demand for resin coated proppants used to enhance extraction of oil and natural gas.

Hexion has completed construction of a resin coated proppant production facility at its existing distribution site in Oklahoma City, Oklahoma. The plant began production in January and has an annual rated capacity of 100 million pounds of proppant materials. The plant will manufacture Hexion's proprietary new line of ValuBond(TM) resin coated proppants.

The company is in the process of expanding operations at an existing distribution site located in Rock Springs, Wyoming by increasing track capacity five fold to service the Rockies. This site will be operational in late spring.

Hexion also is finalizing arrangements to commission an additional manufacturing facility in Cleburne, Texas, to further expand its supply chain network.

Resin coated proppants are used in a process called "hydraulic fracturing" to help optimize the yields from working oil and gas wells by maximizing flow capacity from the oil or gas formation to the wellhead. Since Hexion developed the technology more than 20 years ago, it has become a vital part of the energy extraction process. Recent technological innovations and Hexion's introduction of enhanced materials have expanded the use of resin coated proppants into unconventional gas extraction situations that feature complex and hard to reach geological formations.

According to OTG Vice President Jerry Borges, the expansion of Hexion's operations to serve the Mid-Continent and East Texas will alleviate a shortage of proppant materials in this vital production region.

"We are evaluating further expansion of our operations to serve our broad continental customer base not only in this zone, but in other US production zones and Canada," Borges said. The company continues to assess marketplace opportunities in Russia and other key energy production regions, he added.

About Hexion Specialty Chemicals

Based in Columbus, Ohio, Hexion Specialty Chemicals serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management, L.P. Additional information is available at www.hexion.com.